Demand for houses in Sharjah has outperformed expectations with villa rental prices increasing by 11.7 percent during the first six months of 2017, according to global property consultancy Cluttons. The company’s Sharjah Property Market Snapshot for Summer 2017 report shows that average villa rents in Sharjah now stand at about AED 112,000 (c. US$ 30,500) per annum and can be expected to grow further by the end of 2017.
According to Cluttons, factors fueling demand for Sharjah villas include significantly higher rental rates in some other emirates, increased availability of modern, high quality houses coming to market via new residential developments and the increasing number of freehold properties on the rental market.
New residential communities under development include the 14 million square foot Al Zahia community, the 25 million sq. ft. Tilal City and the smaller 5 million sq. ft. Nasma Residences. According to the mid-market developer ARADA Properties, the first phase of off-plan residential units for Nasma Residences sold out in less than a month.
Sharjah’s property market has been invigorated by the introduction of new property legislation for the Emirate of Sharjah in 2014. The property law now allows foreign expatriates living in the United Arab Emirates to purchase property in designated zones via 100 year leasehold agreements. Previously, property could only be sold to UAE nationals, other Gulf Cooperation Council (GCC) nationals and Arab nationals with a valid UAE resident visa.
In contrast to the high-performing villa market, apartment rents in Sharjah slipped 7 percent during the first half of this year after an 8.1 percent decline in 2016. Cluttons expects apartment rental rates to continue to soften during the second half of 2017, even though demand seems to be continuing at a sustainable level.
Meanwhile, the Cluttons’ report shows that Sharjah’s office rental market remains firm with rental rates in prime areas remaining unchanged during the first six months of 2017.
Cluttons was recently appointed to research and examine real estate options for Sharjah Media City (Shams), one of a number of new free zones being developed by Sharjah to attract knowledge-led industries and further diversify its economy. Standard & Poor’s estimates that Sharjah’s real estate and business services sector accounts for 22 percent of GDP.
Source: Cluttons, various