Rents stayed flat in Sharjah in the first quarter after months of increases.
Rents in the emirate that had risen by a total of 23.9 per cent during 2014 levelled out in the first quarter as the neighbouring Dubai property market also cooled, according to new figures from Cluttons the property broker.
Sharjah rent trends tend to mirror those of Dubai as many people have moved to Sharjah when rents have become too expensive in Dubai.
However, traffic congestion also acts as a push factor encouraging tenants back to Dubai when the market cools.
According to Cluttons, the average annual rent for a three-bedroom apartment stood at Dh75,750.
The agent said that the lack of rent rises during the first quarter of the year followed an increase of just 0.5 per cent during the final quarter of 2014, after a slowdown in the Dubai market that started last summer.
Reidin data shows that average housing rents in Dubai for both villas and apartments remained static during the first quarter, while brokers predict that with another 22,000 homes expected to complete this year, rents in the city could fall by an average of 10 per cent.
“There has been a recent trickle of vacant units being returned to the market; something that has not been seen for a number of years,” said Steve Morgan, chief executive of Cluttons Middle East. “This is being driven by tenants being lured to Dubai once more, as well as those moving further afield to Ajman, which is perceived to offer better value for money.”
And with data from the first part of the second quarter now becoming available, Cluttons said that the trend was set to continue.
“The outlook for the second quarter is not expected to be very different from the performance of the residential rental market in the first quarter,” said Faisal Durrani, Cluttons international research and business development manager. “Our expectation is for the stabilisation in the pace of growth in rents to persist.
In housing sales, which is just being opened up to foreign investors, Cluttons reported that activity remained robust as buyers from conflict zones in the Middle East continued to be attracted to Sharjah.
It reported that at the massive master planned Tilal City development, where 1,800 mixed-use plots went on sale at the end of last year, almost 70 per cent of the plots in zones A and C have already been sold to investors. And while just under 50 per cent of the buyers have been Emirati, Syrian buyers accounted for nearly 16 per cent of total sales. The next biggest group were Pakistanis (8 per cent), Palestinians (5 per cent) and Kuwaitis (5 per cent).
lbarnard@thenational.ae
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