Cheap rents in Dubai affect rates in Northern Emirates
Property rents stabilised in Ajman and softened in Sharjah in the first nine months of the year, as lower prices in Dubai saw many tenants relocate from the Northern Emirates, a new survey by dubizzle Property found.
Reduced rents in Dubai offered tenants, who may have previously lived in Sharjah, “with new opportunities to move to, or even invest in, a property in Dubai,” said Matthew Gregory, director of dubizzle Property.
“This ultimately affects the demand for rental property in Sharjah, hence [adversely] impacting the prices,” he added.
Sharjah’s Al Nahda, Al Qasimia and Al Qasba areas, the most popular locations for one-bedroom apartments in the emirate, recorded a 7 to 10 per cent fall in rental prices in the first nine months. Two and three-bedroom apartments witnessed a similar trend, with popular areas Al Nahda, Al Qasba and Al Majaz experiencing an average price decrease of between 4 to 11 per cent.
Average property prices in Dubai have slumped in recent years as developers focused on smaller, more affordable units and investor concern grew about an oversupply of units. Average apartment prices in Dubai dropped 16.5 per cent year-on-year during the third quarter of 2019, according to Cavendish Maxwell’s latest UAE
Property Market report, while villa prices fell 15 per cent. Apartment rents also dropped by 15 per cent, while villas and town houses recorded a 12 per cent decline in rental values.
However, dubizzle said it was expecting a rise in the Northern Emirates’ rental market in the coming months.
“As the industry continues on its journey through the property cycle, we will see the market begin to stabilise in the near future,” said Mr Gregory.
In Abu Dhabi, rents continued a downward trajectory for both apartments and villas and town houses, according to Cavendish Maxwell.