Sales of new homes in the Northern Emirates are likely to remain subdued this year as a “bleak economic outlook will affect buyers’ sentiment”, according to a report from the property consultancy Asteco.
The Northern Emirates are typically interdependent with Dubai’s property market and with house prices and rents continuing to fall in Dubai as more developers offer affordable homes, attracting buyers to Sharjah, Ajman and Ras Al Khaimah could be more difficult in the future.
“Only quality projects at truly affordable prices may be able to generate some traction,” said John Stevens, the managing director of Asteco.
Sale prices fell by 2 per cent in Sharjah, by 5 per cent in Ajman and 1 per cent in Ras Al Khaimah last year, while rental rates dropped by 2 per cent in Sharjah and Ras Al Khaimah but stayed flat in Ajman.
Mr Stevens said that in the past, there had been an “ebb and flow” of residents between Dubai and Sharjah based on rents – when they go up in Dubai, people move to Sharjah and when they drop they move back.
Yet falling rents in Dubai and an unpredictable jobs market mean that there is not the usual inflow of new tenants. Moreover, rents have not dropped by enough in Dubai to tempt settled tenants to move.
Mr Stevens said infrastructure in Sharjah has improved as a result of investments in road connectivity and new tourism attractions such as Noor Island and the Majaz waterfront.
“With both emirates investing heavily in infrastructure and a growing quality-focused residential offering, we are seeing a slow shift towards a more stable environment as investors and tenants consider the quality of life outside of Dubai,” he said.
Average rents in Sharjah are from Dh34,000 per year for a one-bed flat up to Dh58,000 for a three-be. In Ras Al Khaimah, annual costs range from Dh38,000 for a one-bed up to Dh100,000 for three-bed properties on newer projects and in Ajman, from Dh43,000 for a one-bed up to Dh64,000 for a three-bed property.
New regulations were introduced in Sharjah in 2014 to allow non-GCC nationals to buy properties under a 100-year leasehold, but Asteco said sales have been subdued – partly because ownership rules remain unclear but also because of the new wave of affordable property launches with accompanying payment plans in Dubai.
However, the developer of the Dh2.4 billion Tilal City project close to the Dubai border this week claimed that it had received “strong interest” from potential buyers.
Tilal City – 1,855 plots for flats and villas – is being jointly developed by Sharjah Asset Management and Eskan Real Estate Development. It said most of the interest had come from long-term Sharjah residents, Arab and non-Arab.
“The unique ownership opportunities are attracting … buyers from across the Middle East,” said Haysam Jazairi, Tilal Properties’ executive director of business development.
mfahy@thenational.ae
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