Demand is outstripping supply when it comes to accommodation in Sharjah, and residents are also feeling the pinch of an increase in annual rents.
According to the Sharjah Residential Market Outlook Q3 2014 report, released by Cluttons, an international real estate consultancy, rents in Sharjah increased by 5.3 per cent in the third quarter off the back of a 5.7 per cent rise in the second quarter.
“Overall, the rental market in Sharjah reflects what has already occurred in Abu Dhabi and Dubai and we expect this to persist,” said Faisal Durrani, international research and business development manager at Cluttons. “The core issue of affordability is expected to start curbing the strong rental value growth that has been recorded over the past 18 months.”
The report reveals that apartment rents have increased by 35 per cent in the 12 months to the end of Q3 while rents in the villa market slowed to just under 7 per cent in the third quarter, down from 8.2 per cent in Q2.
“The strength of tenant demand has persisted ... against a backdrop of relatively static residential supply levels. A lack of alternative options in the market has led to households remaining in situ at renewal, often capitalising on the security offered by the three year Sharjah Municipality ‘rent cap’,” the report says.
“Shortage of supply means that households looking to reside in the emirate, will often settle for what is available, while searching for better quality stock,” said Steve Morgan, chief executive of Cluttons, Middle East.
By contrast there is growing demand in the sales market, Mr Morgan said. Sharjah has recently opened its free zone property segments for non Emiratis. The new community on Emirates Road will allow expatriates to buy the property along with a UAE residency visa.
“The emergence of freehold schemes will pave the way for investors looking to enter a market where average home values are roughly two thirds lower than that of Dubai,” he said.
akhaishgi@thenational.ae
