An annual decline in rental rates of 11% on average, with the most significant drop recorded in the Rolla area in Sharjah and for high-end units in Ajman, is seen across the Northern Emirates, said a recent report.
According to the Northern Emirates Real Estate Report Q1 2018 by Asteco, apartment rental rates across the Northern Emirates witnessed an average decrease of 1% since Q4 2017. Studios to three-bedroom apartments in Sharjah and Umm Al Quwain reported a decline of 1% over the quarter, while over the course of the year, rentals dipped by 10% to 13% and 11% to 12% respectively.
In Ajman, rents for affordable housing units fell by 1% in Q1 2018 and by 12% year-on-year. High-end inventory saw a drop of 3% over the quarter and 11% between Q1 2017 and Q1 2018. Studios to three-bedroom apartments in Ras Al Khaimah and Fujairah recorded declines of 1% over the quarter, and over the course of the year, rentals dipped by 10% and 13% respectively for affordable housing units. Meanwhile, high-end units reported an annual decrease of 8% in Ras Al Khaimah and 10% in Fujairah.
John Stevens, managing director of Asteco, said: We expect a further pressure on apartment rental rates, as recovery rates in the Northern Emirates are directly impacted by the delivery of supply in Dubai.
In the Northern Emirates, government priorities remained geared towards infrastructure development. In addition, more master plan and/or large-scale developments are starting to materialise including three projects worth AED2.7bn including Maryam Island, initially announced in 2016 by Eagle Hills and Shurooq, a strategic alliance to develop Sharjahs real estate market and drive investment.
Stevens added: The launch of residential developments is on the rise in the Northern Emirates, with projects spanning a total of over 100 million square feet of land area scheduled for completion by 2025 in Sharjah alone.
Sharjah apartment rental rates across various locations decreased by 1% on average in Q1 2018 and by 12% year-on-year. The most significant drop of 4% was recorded in Rolla, whilst rates remained unchanged over the quarter in areas such as Abu Shagara, Al Butina, Al Yarmook and Al Wahda. Annually, records show rental rates fell by 14% in Al Wahda, 13% in Abu Shagara, 9% in both Rolla and Al Yarmook, and 7% in Al Butina.
Whilst no major residential and office projects were delivered in Q1 2018, Sharjah expects additional residential supply on completion of Nasma Residences Phase 1 and Al Zahia Residences, both due for handover by end-2018.