x Abu Dhabi, UAEMonday 22 January 2018

Rents in northern emirates rose by up to 33 per cent last year

“Our research shows that the rental law created to protect tenants from steep annual rent increases is being circumvented by some landlords asking for additional fees for maintenance and extra parking spaces," according to a report by real estate company Asteco.

Year-on-year rents jumped by 33 per cent in Sharjah, according to the latest report by real estate company Asteco. Pawan Singh / The National
Year-on-year rents jumped by 33 per cent in Sharjah, according to the latest report by real estate company Asteco. Pawan Singh / The National

DUBAI // Rents in the Northern Emirates increased by as much as 33 per cent last year, with some tenants also being asked to pay additional fees for maintenance and parking spaces, according to a new report.

Figures released by the real estate company Asteco reveal year-on-year rents jumped by 33 per cent in Sharjah, 23 per cent in Ajman and 18 per cent in Ras Al Khaimah.

“Our research shows that the rental law created to protect tenants from steep annual rent increases is being circumvented by some landlords asking for additional fees for maintenance and extra parking spaces.

“This is to compensate for the three-year rent freeze stipulated in the rent law,” said John Stevens, managing director of Asteco.

Some areas of Sharjah saw increases of 38 per cent, with Al Majaz, Al Qasimiah, Al Nahda and Al Wahda being the most popular. The average increase across the emirate in the fourth quarter of last year was 8 per cent with two-bed flats on the Corniche costing up to Dh70,000.

Mustapha Samsuddin Jaliwala, leasing executive for Cluttons in Sharjah, said high demand and low supply were the main reason for the increases.

“The increases started as soon as the Expo 2020 win was announced,” he said.

“We are also seeing a knock-on effect from the rising prices in Dubai as more and more people migrate to Sharjah to avoid the rising costs there. But the main issue is that there are far more people wanting to move here than there are available properties.”

Although a number of residential projects had been completed, not all have had the electricity and water supplies connected, he said.

“There is a lot of development that has happened in Sharjah in recent years,” he said. “The road infrastructure has improved and there are many parks and gardens. What we do see is that it takes a very long time for the power to be connected to newly built residential projects.

“These buildings can be ready for a year and the power is still not connected.

“If this was done, then I think it would help to significantly increase supply of property in the market.”

Rents in Sharjah could increase by around 25 per cent by the end of this year, he said.

The most popular areas will be closer to Dubai, in particular Al Taawun while the Al Zahia mixed use development, which includes villas, apartment and commercial units, is expected to be popular with Arab expatriates.

Asteco’s Northern Emirates Q4 2013 report said RAK and Ajman witnessed fourth quarter growth of 6 per cent with Fujairah recording 5 per cent.

The annual rent for a two-bedroom apartment in RAK is up to Dh50,000 per year, while the cost of a similar property in either Fujairah or Ajman went up to Dh45,000.

However, the commercial sector in Sharjah has remained stagnant since 2010 with office rental rates showing an increase of 1 per cent since the fourth quarter of 2012 with rates unchanged in the final quarter of last year.

nhanif@thenational.ae