Dubai’s housing crunch drove rents higher in neighbouring Sharjah in the first three months of the year as home hunters headed north.
Apartment rents jumped 7 per cent from the previous quarter, taking the annual increase to 38 per cent according to a report from Asteco, the property broker.
A prime one-bedroom apartment in the emirate can cost anywhere between Dh27,000 and Dh50,000 while a two-bedroom unit fetches between Dh32,000 and Dh80,000. But similarly-sized apartments in Dubai can cost twice as much to rent.
Sharjah’s property market is heavily influenced by its neighbour to the south.
Many Sharjah residents moved to Dubai in the post-financial crisis period to avail of cheaper rents, which tumbled in line with property prices.
More recently, house hunters have been moving the other way as double digit rent increases in Dubai force people to travel further in the search for affordable housing.
Rents in the other Northern Emirates of Fujairah and Umm Al Quwain remained stable, with Ras Al Khaimah and Ajman showing marginal growth of 2 per cent and 3 per cent respectively in the first quarter.
“Budget-conscious Dubai residents are now relocating to Sharjah in a flight to affordability,” said John Stevens, the managing director at Asteco. “A vastly improved road network and public transportation, has also benefited the northern emirate.”
Popular areas such as Al Nahda, Mina and Al Wahda recorded rental rises of as much as 11 per cent over the quarter, Asteco said.
Sharjah’s drive to attract more tourists and build more shopping centres is also boosting demand in the property market, according to the broker. The emirate’s tourism economy has expanded significantly
Sharjah has been aggressively promoting its tourism industry, with 1.9 million visitors last year.
Sharjah is especially popular with Russian visitors, whose number leapt by more than half last year to 459,000. Sharjah’s own promotional efforts have also been helped by the overspill of tourists arriving in Dubai seeking cheaper hotel rates.
One of the biggest factors for Dubai workers considering a move to Sharjah has been rush-hour traffic congestion.
But with recent road improvements, the daily commute is becoming less onerous for many motorists.
The emirate’s infamous National Paints interchange has been one of several choke points that feature in daily radio traffic bulletins. Improvements to this and other intersections are expected to alleviate congestion and cut commute times.
“Most importantly, we are seeing a complete upgrade of Sharjah’s transportation infrastructure, making the daily commute to Dubai easier and reducing traffic congestion within the emirate,” said Mr Stevens.
A report last week from the property broker JLL anticipated further movement of people from Dubai to Sharjah in search of savings.
It estimated that Dubai rents rose 23 per cent in the first quarter compared to a year earlier, or 7 per cent compared to the previous quarter.
“As rent values and sale prices continue to rise in Dubai’s established communities, tenants are likely to relocate to more affordable areas within Dubai, with some moving to the neighbouring Northern Emirates,” JLL said.
scronin@thenational.ae
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