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Dubai: It costs 23 per cent more to rent in Sharjah today than it did at the start of the year, according to property consultants Cluttons.
“Rents in Sharjah continue to face upward pressure, particularly as the supply pipeline remains limited,” the firm said in a statement on Wednesday releasing its Winter 2014 Sharjah Residential Market Outlook report.
The average rent prices increased 5.3 per cent in the third quarter, and as of the September 30 rents across Sharjah were 26.4 per cent more expensive than they were a year earlier.
“The behaviour of the lettings market in Sharjah reflects what has already occurred in the lettings market in both Abu Dhabi and Dubai and we expect this to persist,” Cluttons said.
The average rent for an apartment in Sharjah increased by 35 per cent in the 12 months leading to September 30.
“The strength of tenant demand has persisted throughout the year against a backdrop of static residential supply,” according to the Cluttons report.
The property consultants said increasing rental costs means many tenants are choosing to remain in their existing property in a bid to make-best under Sharjah’s three-year “rent-cap”.
In the first nine months of the year villa rents have increased 29 per cent, as per Cluttons estimates, while the third quarter saw the rate of villa rents increase 7 per cent, lower than the 8.2 per cent climb in the second quarter.
“This is not a reflection of weakness in the level of requirements, but instead points to a breaching of affordability,” Cluttons said.
There is a substantial demand on rental property in Sharjah from those working both within and outside the emirate. Cluttons said requirements from “Sharjah’s rapidly expanding [budget carrier] Air Arabia has put pressure on the limited supply of villas, particularly at the higher end of the market.”
The report further highlights growing demand in the sales market, with the newly launched Tilal Properties releasing residential and commercial land plots at Tilal City’s new master planned community on Emirates Road. The community will for the first time allow non-Arab nationals, with UAE residency visas, to purchase land in the emirate.
“The emergence of similar freehold schemes will pave the way for investors looking to enter a market where average home values are roughly two-thirds lower than that of Dubai,” stated Steve Morgan, chief executive of Cluttons Middle East.
Meanwhile, a Dh6 million renovation of the three towers known as the United Arab Bank Buildings in Sharjah was recently completed resulting in 45 to 55 per cent uplift in rents. Cluttons expects similarly aged buildings to undergo refurbishment.