Rents in Sharjah, Ajman and other Northern Emirates are declining following the decline in Dubai rentals, which is prompting many tenants to move back to Dubai.
According to the latest Asteco Northern Emirates Q2 2015 real estate report, rents in Sharjah and Ajman declined by 3 per cent quarter-on-quarter during the April-June quarter.
This decline, the report states, is prompted by a rise in vacancy levels as new supply was handed over and the reverse relocation trend to Dubai, which has started to gain momentum.
The report noted that enquiry levels were also lower compared with the previous quarter, supporting the theory that more people are keen to move back to Dubai now that rents have been cooling in the UAE’s second largest emirate.
However, rental levels in the Northern Emirates remain much more affordable than Dubai. The report maintains that tenants can currently rent a two-bedroom apartment on the Sharjah Corniche between Dh48,000 and Dh80,000 per annum, or between Dh32,000 and Dh40,000 pa in Ajman.
Compare that with the average rents for one-bed units in the ‘affordable’ Dubai developments – Dh52,000 pa in International City and Dh70,000 pa in Discovery Gardens.
Asteco reports that although residential rental rates declined in Q2 2015, they were still higher in comparison with the previous year in Fujairah, Ras Al Khaimah and Umm Al Quwain.
“Another reason for the decline in Ajman has been the handover of new supply in recent months. We've seen a large amount of new stock entering the market, at a time when newcomers to the city were fewer. This resulted in an internal movement, away from older buildings to newer properties, particularly one and two-bed units, as tenants upgrade,” said John Stevens, Managing Director, Asteco.
Rental rates in high-end Fujairah buildings put a two-bedroom unit at an annual figure of Dh55,000-Dh62,000; in newer Ras Al Khaimah developments at Dh50,000-Dh65,000 pa; with Umm Al Quwain the most affordable at Dh28,000-Dh30,000 pa, albeit with lesser quality stock.