Rents in Sharjah’s residential property market are set to continue to decline throughout 2016, following an average fall of 5.7% during Q1 which has dragged the annualised rate of change in rents down to 8.3%, according to international real estate consultancy, Cluttons.
Cluttons’ Sharjah Spring 2016 Property Market Outlook report shows that unlike last year, the fall in villa rents have accelerated, with average rates declining by 13.2% in Q1 2016 alone whereas average apartment rents fell by 1.5% in the first quarter, leaving them 7.7% down in Q1 2015 figures.
The report also highlights the growing awareness amongst tenants to seek out well managed properties, with good quality facilities and rents that are perceived to be ‘fair’.
Suzanne Eveleigh, Cluttons’ Head of Sharjah said: “This sentiment among tenants creates an opportunity for landlords to differentiate themselves by undertaking refurbishment and modernisation of properties while the market works its way through the current slowdown.
“We have already seen numerous instances of this being done during the last downturn in the market and it is these properties that are now fully let and in high demand. That said, even in our portfolio of managed properties, voids have crept up to around 3%, up from the usual average of 0.5% to 1%, reflecting the softening conditions. The situation is far more challenging in buildings where landlords haven’t been proactive.”
Cluttons research shows that demand for suburban-style living continues to rise in Sharjah, predominantly because of the relative affordability when compared to Dubai. Developers are conscious of the demand for more luxurious gated accommodation and are continuing to rush new schemes to the market.
Eveleigh adds: “These emergent high end communities will help cater to the strong demand from both residential investors and tenants who are seeking out this type of housing in Sharjah. Al Zahia and the AED 2.4bn Tilal City are examples of such communities that are progressing quickly.
“We expect to continue seeing larger and more elaborate residential communities built on the outskirts of the city, with a specific focus on the Airport Road corridor.”
According to the report, the weaker conditions in the market are expected to persist as the year wears on, with rental falls of between 3% and 5% likely, on average.
Faisal Durrani, Head of Research at Cluttons, said: “Rents across Sharjah’s more affordable areas remain linked to the performance of Dubai’s rental market. With a weak short term outlook for Dubai, we do not expect to see any turn around in rental value growth until jobs linked to the World Expo in 2020 start to materialise, which we should start to see in the next 12 to 18 months. Until then, the rental market in Sharjah is expected to remain subdued.”