Ajman is emerging as the rental hotspot in the Northern Emirates as budget-conscious residents, concerned about the escalating rents in Sharjah and Dubai, relocate to the emirate, real estate consultancy Asteco said on Monday.
In the latest Northern Emirates market report, Asteco said demand for affordable housing continued to attract new arrivals, principally from Dubai to Sharjah and Ajman in second quarter.
While Dubai’s rental market saw a significant rise in the second quarter of 2014, with apartment rental rates increasing four per cent and villas by five per cent compared to the first quarter, Sharjah recorded three per cent quarter-on-quarter growth for apartment rentals with year-on-year growth dropping to 31 per cent from 38 per cent.
Annual rates in Fujairah, Umm Al Quwain and Ras Al Khaimah remained stable with nominal increases of two and one per cent respectively.
“Bucking the trend, Ajman’s residential real estate sector received a fillip, registering a seven increase in second quarter, and driven by the emirate’s ultra-affordability, with two-bedroom apartments available for between Dh30,000 to Dh45,000 per annum in comparison to up to Dh80,000 in Sharjah,” the report said.
“Ajman is now taking over the mantle as the relocation destination for budget-conscious residents as landlords in Sharjah ask higher than average rental rates, particularly for brand new buildings in popular locations like Al Nahda, Corniche and Al Wahda. However, this eagerness to capitalise on market opportunity is not being matched by transaction volume, confirming that budget issues are still a key driver,” said John Stevens, managing director at Asteco.
Stevens said Sharjah in particular has benefited in recent months due to aggressive rental rate increases in neighbouring Dubai, but this quarter saw a degree of stabilisation in Dubai’s more affordable communities, which led to a reduction in the number of residents choosing to relocate.
The overall positive market sentiment at the start of 2014 has also seen the reprisal of a number of stalled residential projects and launch of several new projects in the Northern Emirates, which Asteco expects to boost current stock in the next few years.
RAK Properties recently launched the 141-villa Bermuda Villas project in Mina Al Arab, Ras Al Khaimah and Emaar also unveiled its Sharjah-Dubai border development. Al Mamzar Lake, which features waterfront homes, serviced residences, retail amenities, fountains and water-themed leisure attractions. “This surge in the development pipeline in the Northern Emirates is a positive reflection on 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,” noted Stevens.
Prospective tenants looking for prime accommodation in Sharjah or further north in Ras Al Khaimah can expect to pay up to Dh80,000 for a “high-end” two-bedroom in Sharjah and up to Dh75,000 for a similar unit in a master-planned community in Ras Al Khaimah.
Despite overall stabilisation, rental prices in certain Sharjah neighbourhoods recorded above average growth in the quarter led by seven per cent rise in Al Khan where a one and two-bedroom unit currently command up to Dh45,000 and Dh55,000, respectively.
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