Dubai: There is nothing gradual about rental gains in Sharjah any longer. More tenants are finding that lease renewals are coming with 5-15 per cent average increase in rental hikes, especially on those contracts that are just getting out of the first 3-year no-hike clause.
Also, the pace of relocations to Sharjah from other emirates might be picking up, especially to those newer towers and villa communities. Residential options with ample space are getting particularly heavy leasing interest, estate agents confirm. And these days, Sharjah has to offer more of new apartment dwellings and freshly delivered villas/townhouses.
“If the relocations continue, the pace of rental increases in Sharjah will speed up further in 2024,” said an estate agent. “Newer residential towers are well above the 80 per cent occupancy in high-demand residential districts. It will add to the pressure on existing leases at the time of renewal.”
A recent report issued by the property listings platform dubizzle offers some insights into where rents are headed. In 2023, average rental increases for apartments in Sharjah’s Al Nahda area was 15 per cent, and push average rents on one- and two-bedroom units to between Dh25,000-Dh30,000. (Primarily newer buildings and with bigger floor areas. Average studio rentals are around the Dh19,000 mark.)
Al Nahda is ‘particularly favoured among working individuals due to its reasonable rents and an ideal location near Dubai, which adds to commuting ease’, the report notes. Even with the 2023 increases, the Al Nahda, Sharjah, rents are still a good 20-30 per cent off on the corresponding ones in Dubai.
All signs point to faster rent gains
And, according to industry sources, is making it the choice spot for relocations too. “We are starting to see a lot of relocation demand coming through, as residents try to ease their rental spending obligations,” said an estate agent. “By April or May, we can expect to get a better picture of rental trends in Sharjah, as school admissions start and filter through to creating rental demand.”
Sharjah residential rental gains started off slowly in the post-Covid boom phase that the UAE real estate markets are going through. Through 2021 and 2022, all of Sharjah’s main residential districts saw 1-5 per cent rental increases. It was also a time when a sizeable number of residents in the emirate thought it was time to move into newer buildings, at more or less the same rental bands. Others shifted their base to owned homes in Dubai or chose locations such as JVC, Dubai Sports City or Dubai South at budget-friendly rents.
This is what’s changing been changing, and a proceed that gained pace into the final weeks of 2023 with renewals and on new rental contracts. “Whilst rental increases were generally modest, there were marked increases within the high-end segments of Sharjah (and Ras Al Khaimah,” according to a recent report from the property services firm Asteco.
How do other areas in Sharjah measure up?
Even with the latest – speeded up – rental increases, Sharjah still has its share of budget-friendly options. “With reasonable yearly rents across the emirate, renting an apartment in Sharjah has proven to be a feasible choice,” says the dubizzle report. “Most people searching for rental apartments in the emirate have considered Al Nahda, Muwaileh, Al Qasimia, Al Majaz, and Al Taawun as top choices.”
Can older buildings close rental gap?
Some market analysts suggest that the more dramatic changes in Sharjah rentals have been at newer rental buildings and those properties in freehold locations that were recently delivered. Sharjah will see more homes ready for occupancy this year, as well as fresh offplan launches that will add to the emirate’s housing stock by 2027-28.
Amidst this, can much older buildings close the gap on rentals? Landlords have been upgrading these buildings, with more than a fresh coat of paint. Where new features have been added, the landlords have always managed to get decent higher rentals.
