Sharjah’s growing appeal

Average residential rents in Sharjah have seen a considerable rise over the course of this year. — KT file photo

Are home hunters heading to Sharjah and the other emirates due to Dubai’s rising rents? Yes. Post 2008, many Sharjah residents moved to Dubai to take advantage of the city’s falling rents. However, more recently, people have been moving the other way as shooting rents in Dubai are forcing them to relocate to Sharjah in a flight to affordability.

With a rise in demand comes a rise in rents. So, it’s perhaps not surprising then that average residential rents in Sharjah have seen a considerable rise over the course of this year.

For instance, while you could rent a two bedroom apartment in Sharjah for Dh48,000 in July last year, this year the price has shot up to Dh65,000 — a 35 per cent increase. We’re also seeing a hike in rental values in Ajman.

Data on our site reveals an 18 per cent rise in rents for two bedroom apartments and a 20 per cent rise in asking rents for three bedroom units. However, despite these hikes, Sharjah’s rents continue to be cheaper than those in Dubai and Abu Dhabi.

For instance, the average price of renting a one bedroom apartment in Sharjah is Dh45,000 while that in Dubai is Dh66,000. In Ajman, rents are much cheaper. Anyone looking for a one bedroom apartment in the city can expect to pay Dh32,000 while a two bedroom would cost around Dh45,000.

While Sharjah’s biggest draw for residents has been its affordable rents, the scene is set to change. Today, the emirate is planning a $2.3 billion investment in transport infrastructure over the next five years — a tramway system and a metro system which could be linked with Etihad Rail.

In fact, the expenditure for 2014 is higher by seven per cent compared to last year’s Dh14.5 billion expenditure. This increase will add to the rising levels of real estate activity and position Sharjah as an attractive business hub. The emirate’s road networks are seeing a complete upgrade, making the daily commute to Dubai easier and reducing traffic congestion within the city. The Sharjah International Airport is also set to take off with the opening of the new runway and expects to see 25 million passengers by 2025.

With a huge expansion plan in place, infrastructure projects in the airport will have an effect on surrounding areas, just the way Al Maktoum International Airport is positively affecting developments in Jebel Ali. There are also a number of master planned residential communities such as the Al Zahia mixed-use project near Sharjah University City that are expected to attract a great deal of interest.

The spillover effect of this would be expanding levels of economic activity and job creation in the emirate. Furthermore, Sharjah is regulating its rental market. The Sharjah municipality recently declared that while a landlord can fix a new rental price post the three-year rent contract, the tenant can file a complaint at the rent regulation department should he/she find the increase unreasonable.

Given these developments, is it likely that Sharjah’s appeal will be based on factors over and beyond low rents in the near future.

The top five rental residential communities searched this year were Al Khan, Al Nahda Sharjah, Al Majaz, Al Nabba and Al Butina, with Al Khan securing 50 per cent of the total property views. In July last year, the communities on the list were Al Nahda Sharjah, Abu Shagara, Al Majaz, Sharjah Industrial Area and Al Butina, with the top community only securing 25 per cent of the views.

With its affordable housing, rental regulation and growing infrastructure and lifestyle developments, Sharjah may finally be moving away from Dubai’s shadows.

The writer is the deputy CEO of propertyfinder.ae. Views expressed by him are his own and do not reflect the newspaper’s policy.