Rental rates for apartments in Sharjah are expected to increase over the next few months amid a slowdown in new stock and growing waiting lists for well-located buildings in the emirate, real estate consultant Cluttons has said.
Occupancy rates in desirable areas such as Al Nada are as high at 100 percent, prompting landlords to increase rates for new tenants by up to ten percent, the firm said in its quarterly review of the Sharjah real estate sector.
“The volume of new stock coming onto the market has slowed and new, well-designed buildings in good locations are leasing up quickly,” the report said.
“This is now giving hope to landlords who are considering the possibility of increasing their rents where they have been historically low or where there have been annual decreases for the last two to three years,” it added.
Real estate prices in Sharjah plummeted after neighbouring Dubai’s five-year housing bubble burst in 2009.
Average rental rates for one and two-bedroom apartments have been flat since the start of 2011, according to data from Cluttons.
The completion of Al Majaz Waterfront, a new retail and leisure destination, has prompted several landlords in surrounding areas to “to commence refurbishment programmes in order to capitalise on the opportunity to get premium rents for apartments with some of the best views and amenities in the emirate”, the report noted.
Despite the renewed outlook for centrally located property, buildings in less-desirable locations on the outskirts of the emirate are still struggling to achieve high occupancies, said Cluttons.
Villa rents in the emirate have continued to decline following a migration of residents to Dubai. A five-bedroom villa in Sharqan, which rented for AED160,000 (US$43,500) in 2010, will now only set tenants back AED110,000.
“A lack of supply and the reluctance of landlords to reduce rents has created a gap in the market,” said Cluttons. “We anticipate rents are now approaching their lowest point and that some increases are inevitable in certain locations over the coming months,” it added.