The increased availability of affordable housing in Dubai is reversing a recent trend of people moving to Sharjah and Ajman for cheaper rents.
According to Asteco’s second-quarter report for the Northern Emirates, rents in Sharjah and Ajman fell 3 per cent from the previous quarter as vacancy levels rose because of new housing supply and more people found affordable rents in Dubai.
Annual rents for a two-bedroom flat on Sharjah’s Corniche range between Dh48,000 and Dh80,000, while a similar property in Ajman would lease for between Dh32,000 and Dh40,000.
In Ajman, more new properties have been leased to tenants, which has led to people relocating within the emirate, according to John Stevens, Asteco’s managing director.
“We’ve seen a large amount of new stock entering the market, at a time when newcomers to the city were fewer. This resulted in an internal movement, away from older buildings to newer properties, particularly one and two-bed units, as tenants upgrade,” he said.
Rental costs in Fujairah, Umm Al Quwain and Ras Al Khaimah remained flat.
Although the market for property sales to foreigners has opened up in Sharjah in recent months, apart from the Tilal City development, “few properties have actually been sold due to the high asking prices”, said Mr Stevens.
“Where Sharjah is also losing out is that Dubai’s more established real estate market has more transparent, pro-buyer legislation in place,” he said.
Tilal City is a Dh2 billion development of 1,855 land plots that have been made available to UAE resident expatriates under 100-year leaseholds.
It is a joint venture between Sharjah Asset Management and Eskan Real Estate Development, and features a central mall, 11 schools and kindergartens, and several leisure and healthcare centres.
The land plots are being developed in five zones.
Heysham Jaziri, the business development director of Tilal Properties, voiced confidence that the master plan would “ensure a huge demand – both rental and sale – that delivers high returns to investors”.
Mr Stevens said that the 45,470 square metre Al Noor Island, currently being built by Sharjah Investment and Development Authority, also had the ability to generate interest among potential buyers.
The island, due to be handed over this year, will have a butterfly house, a literature pavilion and an egg-shaped arts sculpture. It will be linked via boats to points along Sharjah’s waterfront.
“New project announcements and the timetabled completion of developments such as Al Noor Island are vital elements in securing investor interest and confidence in the months to come,” said Mr Stevens.
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