Rent Rises in Dubai backing Sharjah in 2014

Rising rents in Dubai during the first quarter of 2014 have increased the accommodation expenses in the city. After observing the escalations in cost of living several budget conscious residents in Dubai started relocating to neighbouring emirates of Abu Dhabi and Sharjah in the search of affordable accommodation. Growing trend of relocation has remarkably altered the demand of residential property in Sharjah. Occupancy levels notably enhanced in residential projects located in popular areas. Furthermore, market figures revealed that rental hikes of 30-40 percent have been observed in all leading locations across the city during the first quarter of 2014. It has been observed that steep rent rises are worrying residents and prospective tenants equally. Having considered latest market trends, experts predicted that rises in rents could be higher in coming months. Projects located at prime locations like Al Nahda, Mina and Al Wahda exhibited rental hikes of 11 percent at the end of Q1 of 2014.

However, climbing rents of residential properties in Dubai is not only the single reason for sharp rental hikes and rising property demand in Sharjah. There are other reasons as well for exponential growth of residential property market. After being motivated from the great success of Expo 2020, Government of Sharjah started taking interest in investing infrastructure, transport, retail, tourism and leisure projects. Their primary aim is to provide world class life style facilities for everyone living and visiting this emirate. 

Infrastructure boost

 

Key projects which are backing Sharjah include expansion of Sharjah City Centre, Sahara Center,  a Roman style amphitheater (total area of 7,000m2) with capacity to accommodate 4,500 people has also opened near Majaz Island are major tourism projects led by government. Other important developments which are expected to boost travel and tourism include Al Khan and Al Qasba. Specifically, development of infrastructure and transportation projects has transformed the face of city. Enormously improved road network notably benefit residents and everyone traveling from Sharjah to Dubai. National Paints Bridge the fifth interchange is an example of development plans that are being taken to reduce traffic congestion on Mohammad Bin Zayed Road. Such expansion projects will positively affect everyone living and visiting this emirate.. 

Residential Sector

Sharjah property market is deeply influenced by its southern neighbour. Whether, it is the time of post financial crisis or it is the post event economic and financial boom, changes have been observed. Previously at the time of global financial crisis considerable number of residents migrated to Dubai increasing the occupancy levels of residential projects. Whereas, recently the steeping rental rates in Dubai cause residents to relocate to Sharjah. Even the older apartment buildings have shown rental increase of 6%. Having considered the market standards, prime residential projects like Al Nahda and Al Tawun are capable to compete with luxury communities in Dubai Silicon Oasis, International city and even Jumeirah Beach Residence.

Real estate investors are not only looking to invest in new projects rather they are also showing great interest in buying existing projects. Their primary focus is just to obtain income generating stock with lesser risks. Major advantage of investing in existing project is that investors don’t need to wait for earning. As far as tenants already living in the city will probably hit by rising rents in the city upon renewal of latest lease after completing three years of their lease.   

Commercial and retail sector

Moreover, commercial and retail sectors are also showing progress with demand surge of residential units. As people are flocking here to find affordable accommodation will also need suitable retail and business facilities. Over the past few years major retailers like Majid Al Futtaim (MAF), through Sharjah Holding, and Al Safer Group, have opened up community retail centers to serve local residents.  Such retail outlets are working well in association with Carrefour supermarket and some other stores. 

Being the hub city of United Arab Emirates, economic and business trends in Dubai are capable to transform business and real estate sectors of neighbouring emirates.