Sharjah rents driven up by influx of ‘refugee capital’
Sharjah rents rose 4.5 per cent in the first quarter and by almost a fifth compared to a year earlier as the emirate benefited from an influx of residents seeking cheaper accommodation.
A report from Cluttons also reveals that the current political instability across parts of the Middle East has caused an influx of people drawn by affordable rents and its rich Islamic heritage.
The report points to these expatriates being flush with “refugee capital”, which is finding its way into Sharjah’s off-plan residential sales market.
Sharjah continued to experience spillover from former Dubai residents seeking cheaper accommodation. At the same time the emirate benefited from increased economic activity and job creation, the report said. Rents rose by an average of 16 per cent last year.
The Al Qassimiya area claimed the highest increases, with rents up 36 per cent compared with the first quarter of 2013. Rents rose 12.2 per cent during the first three months of 2014 to Dh35,000 a year for a one-bedroom apartment and Dh50,000 for a two-bedroom.
“Over the past 12 months we’ve seen many expatriates from Syria looking to rent and buy,” said Shane Breen, associate director at Cluttons’ Sharjah office. “These are not the sort of refugees you see living in camps, these are affluent individuals attracted by Sharjah’s stable political environment who are making the choice to base themselves here.”
The supply of villas was outpaced by demand with average rents increasing 13 per cent between January and March to about Dh80,000 a year for a three-bedroom villa and Dh105,000 for a four-bedroom villa.
During the whole of 2013 villa rents increased by just 25 per cent, Cluttons reported.
Increasing pent-up demand is also prompting some property developers to restart a number of housing schemes stalled by the financial crisis, Cluttons reported, although many still remain empty and incomplete.
It added that the expansion of Sharjah-based Air Arabia was also pushing up demand along the Sharjah Airport/Maliha Road corridor. It said that this had resulted in the company receiving a number of requests to conduct feasibility studies on new developments in the area, which “is emerging as another budding UAE aerotropolis, in much the same way that Al Maktoum International is spurring development in areas south of Jebel Ali”.
Cluttons’ figures are slightly lower than those reported by rival property broker Asteco, which said that average housing rents in the emirate grew 7 per cent during the first quarter of the year and by 38 per cent over the year.
“Budget-conscious Dubai residents are now relocating to Sharjah in a flight to affordability. A vastly improved road network and public transportation has also benefited the northern emirate,” said John Stevens, the managing director at Asteco.
The broker declined to comment on Syrians relocating to the area but a spokesman told The National that it was not a trend it had noticed.
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Published: May 20, 2014 04:00 AM