Planning to move to Sharjah? Read this first
Lower rents lure Dubai residents to the emirate. Is it worth the time on the road?
You win some, you lose some. You either pay high rents and reach home by dusk to spend quality time with your family - or pay less rent and spend hours braving the peak-hour traffic gridlock. This often perplexes residents who opt to live in either Dubai or Sharjah.
With rents in Dubai showing no signs of relenting in the run-up to Expo 2020, several families are lured by cheaper prices and bigger apartments in the neighbouring emirate. With the three-year rent cap in Sharjah, tenants are also shielded from arbitrary rent hikes. This has resulted in some residents fleeing Dubai rental hikes to a 'safe haven' in Sharjah.
Meet Harish Kumar, an employee with Abu Dhabi Commercial Bank. He has moved from a studio in Hor Al Anz, Dubai, to a one-bedroom apartment in Al Nahda, Sharjah. "I faced steep rental hikes from Dh26,000 to Dh38,000 across three years. Owing to high demand, Hor Al Anz rents were controlled by agents. Today, I pay Dh36,000 for my one-bed apartment in Sharjah. If you need to save a bit, you have to endure some traffic. I brave almost two hours of traffic daily to reach my office in Bur Dubai," he says.
Although apartment and villa-sharing is rampant in both the emirates, Sharjah is perceived to be more of a traditional, family-oriented destination, with fines imposed on bachelors living in family-designated residences.
"Many families choose to live in Sharjah as overall services are cheaper, including schools, healthcare, entertainment, etc. With more leisure options being delivered targeting all population segments, Sharjah is appealing to an increasingly wide range of tenants, including bachelors and families," according to Julia Knibbs, associate director of research and consultancy - UAE, Asteco.
A case in point is Roji Ravi, a senior business analyst with GRMC Advisory Services. He moved from a one-bedroom unit in Al Nahda Dubai to a two-bedroom unit in Muweilah, Sharjah, where all the schools are concentrated.
"My Dubai landlord hiked the rent of my one-bedroom apartment from Dh46,000 to Dh56,000. With the introduction of paid parking in the area, he also began charging me extra for parking fees. Now, since I take the Metro to work. I don't have to deal with much traffic. I pay Dh48,000 for my two-bed unit in Sharjah, which is more spacious as well," informs Ravi.
There is evidence of a reduction in Sharjah asking rents in comparison with Dubai.
"There is increased new supply in Sharjah and some downward correction in residential leasing rates in Dubai. This has encouraged some Sharjah residents, who had moved there in recent years to move back to Dubai. This has reduced demand and softened rents," claims Cheryl McAdam, valuation manager, ValuStrat.
Meanwhile, some Sharjah landlords have started renewing rental contracts at slightly lower rates, if rates were above current market average. Landlords who overprice are generally left with empty units - those that want to secure tenants will need to quote prevailing market rents, reduce their asking price and/or offer more flexible payment terms.
Tenants are also considering upgrading their existing premises to leverage the decline in rents. Seebha B., MD of a maintenance firm, has lived in Al Nahda, Sharjah, for seven years. "I have heard from friends that there has been a drop of around Dh5,000 to Dh7,000 in the average asking rents in this area. I am considering upgrading to a two-bedroom apartment."
Units in Sharjah are bigger when compared to Dubai. According to ValuStrat, a one-bedroom apartment in Sharjah is normally around 850 sq ft to 900 sq ft as compared to around 650 sq ft in Dubai.
Asteco estimates that for the price of a studio in say Dubai Sports City or Jumeirah Village (approximately Dh55,000 to Dh60,000 per annum,) you could get a 2BR or even a 3BR apartment in Sharjah. Ajman is even cheaper with 3BR apartments on average costing less than Dh50,000 per year.
However, the downside with Sharjah is often older buildings with less modern amenities such as underground car parking, swimming pools and gymnasiums.
Downplaying the relocation trend, Asteco's Knibbs believes it has been less pronounced this quarter. "Larger inflows of new tenants usually occur when rents in Dubai increase, especially in the more affordable segments," she adds.