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The continued rental price hikes in Dubai has led to the demand for affordable emirates like Sharjah (now also experiencing surging rents), Ajman, Fujairah and Ras Al Khaimah, the direct beneficiaries of the “flight to affordability” trend.
The trend obviously created a domino effect, influencing developers to outdo one another in launching housing projects.
Among the three, however, Ras Al Khaimah, has the most number of ongoing developments, leading many property investors to ask whether it is worth investing there, considering its distance from the country’s major business, leisure, sports and retail venues.
John Stevens, Managing Director of Asteco, gives his forecast on the northern emirate that has generated much interest lately.
The next investment destination
The overall positive market sentiment at the start of 2014 has seen the reprisal of a number of stalled residential projects and the launch of several new projects in the northern emirates.
The surge in the development pipeline is a positive reflection of the future prospects of the UAE real estate sector as a whole.
We are seeing investor confidence return as the country pushes ahead with the next wave of infrastructure projects that will create opportunities to build new communities supported by the requisite access, facilities and services that long-term residents would expect.
Ras Al Khaimah has a number of developments that will add to the popularity of the emirate.
It differs from some of the other northern emirates by its supply of good quality residential master planned communities including Al Hamra, Mina Al Arab and Bab Al Bahr (in Al Hamra).
These developments, in much-sought-after communities, include beaches, an array of hotels, golf courses, malls, dining outlets, and recreational and fitness facilities.
Apparently, good value for money is the trade-off many families are opting for over travelling distance.
Real estate boom
Whilst previously the northern emirates has had relatively low occupancy rates, the increase in pricing in Dubai and Sharjah is leading many tenants to consider far-off locations such as Ras Al Khaimah that offers not only attractive rental rates but also quality waterfront developments, including villas and apartments, that are a good value for money for many families.
This is especially true since Dubai is less than an hour’s drive away.
In addition, a lot of demand for these developments is driven by expatriates working in Ras Al Khaimah itself, such as in RAK Free Zone, RAK Investment Authority (RAKIA) or in the numerous hotels in the area.
In Q3, demand for affordable housing continued to attract new arrivals principally from Dubai to Sharjah and Ajman.
Our latest Northern Emirates market report highlighted growth rates in Ras Al Khaimah of 5% quarter-on-quarter for residential rentals.
Affordable alternative to property ownership
Residential properties in Ras Al Khaimah, with its dual proposition of regular accommodation and attractive master planned community options, are priced as low as Dh28,000 and up to Dh70,000 for a two-bedroom apartment.
Villas, specifically, have been very successful in attracting good demand levels with availability now at a premium.
Modern beachfront villas that are part of Mina Al Arab and villas within Al Hamra Village are extremely popular due to cost and the vast array of facilities available.
In terms of sales prices, a three-bedroom villa with full facilities including beach access, pool, tennis courts and more can be bought starting from Dh2.2 million at Mina Al Arab and from Dh1.3 million at the Al Hamra development.
Ras Al Khaimah clearly offers an affordable alternative to property ownership in Dubai or other emirates that are considered expensive.
Master Plan Projects in RAK
• Mina Al Arab – The project is divided into several districts featuring residential apartments and villas, resort hotels, beaches, wetlands and recreational and leisure areas
• Al Hamra Village – It is composed of several developments, the most popular of which is Bab Al Bahr, a luxury community project that offers waterfront homes equipped with the latest amenities and facilities
Source: Ellen Joyce Soriano, Special to Freehold
The writer is a freelancer