Sharjah, Ajman rents drop 3% amid ‘reverse relocation’ to Dubai
Residential properties in Sharjah also struggle to attract buyers, real-estate firm Asteco finds
Sharjah’s property market has been feeling the pinch of “reverse relocation” to Dubai, with rental rates dropping 3% in the second quarter, according to a report by Asteco.
A similar decline was also observed in Ajman, with both emirates recording high vacancy levels on account of new supply and an increasing number of tenants moving to Dubai, the real-estate firm said.
Sharjah’s residential-sales market has also not managed to garner much interest, apart from the recent success of sales within the Tilal City development, according to an Asteco statement.
“Sharjah’s sales market has opened up in recent months. However, except for land plots at Tilal City that were priced in line with market demand, few properties have actually been sold due to the high asking prices, which failed to match buyer expectations,” said John Stevens, managing director at Asteco.
“The lack of activity was further compounded by a wave of affordable project launches in neighbouring Dubai, which diverted prospective buyer interest. Where Sharjah is also losing out is that Dubai’s more established real estate market has more transparent pro-buyer legislation in place.”
Renewed investor confidence in the long-term potential of Sharjah’s residential sales market could however gain traction with the relaunch of land sales at the Shoumous Residential Complex, the Asteco report said. The project, located on the Sharjah-Kalba Road, is targeted towards GCC and Arab nationals and was initially launched following the success of plot sales within the Tilal City development.
Another project with potential to enhance interest in Sharjah is the 45,470sqm Al Noor Island, currently being developed by the Sharjah Investment & Development Authority (Shurooq). The island, expected to be handed over at the end of 2015, will feature a natural butterfly habitat housing over 500 species, a 3,500m walkway and floating bridge serving as its entrance, a literature pavilion and children’s playground. The tourism and residential project is expected to increase awareness of Sharjah’s market potential, which Asteco says will potentially drive higher rates and popularity to central Sharjah areas, especially along the Corniche.
“The Northern Emirates real estate market closely follows the Dubai market, with a few months delay between recovery and periods of stabilization, so new project announcements and the completion of developments such as Al Noor Island are vital elements in securing investor interest and confidence in the months to come,” Stevens said.
Meanwhile, Ras Al Khaimah has been the ‘success story’ among the Northern Emirates in the second quarter, the Asteco report found. Communities like Al Hamra Village and Mina Al Arab continued to witness good levels of demand and high occupancy rates, especially for villas and townhouses.
