Sharjah villa rents to see growth of up to 2% in 2018
Sharjah’s villa rental market has shown continuous growth over the last year, and will continue on this trend with up to 2% growth expected in 2018
Sharjah’s villa rental market has shown continuous growth over the last year, and will continue on this trend with up to 2% growth expected in 2018.
The market recorded an increase of 1.7%, taking the rate of growth to 0.4% during the last quarter of 2017, according to Cluttons’ Sharjah Property Market Snapshot for Spring 2018.
This trend is an indication of Sharjah’s villa market’s growth in both profile and popularity over the last two years, as the real estate market repositions itself with new and affordable options.
While villa rents are expected to experience growth of 1% to 2%, Cluttons expects rents will continue to moderate, with apartments likely to see corrections of 5% to 7% next year.
Sharjah’s villa market is the only property segment in the UAE to see sustained positive growth the report revealed.
Suzanne Eveleigh, Cluttons’ head of Sharjah, said: “Communities such as Al Zahia have been a runaway success and with most major new shopping mall developments in Sharjah anchoring these new lifestyle destinations, the future of community living in the emirate appears relatively buoyant, especially when compared to many other property segments in the UAE.”
In contrast to the villa market, apartment rents in Sharjah registered a steep decline of 13.6% in rents in the last quarter of 2017, compared to a decline of 10.6% in 2016, on average.
Cluttons’ research shows that Abu Shagara topped the list of weakest performers, with rents dropping by an average of 15.1% during 2017.
According to the report, Sharjah’s residential rental market is set to face pressures from rising stock, which helps to cement the tenant’s market that took hold three years ago.
“Many landlords are reluctant to adjust advertised rents downwards due to concerns about alienating existing tenants,” added Eveleigh.
“However, with tenants increasingly seeking out new and energy efficient buildings, reflecting household financial pressures stemming from the 1 January introduction of VAT, rising utility bills as subsidies continue to be phased out and rising inflation levels, we feel landlords will need to be flexible with rents and the payment plans, particularly in older buildings, to sustain demand.”
The dip in apartment rents and underpinned correction will likely prompt further investment in the city’s villa segment, which Cluttons expects will reshape Sharjah’s residential landscape in 2018.