New Tenancy Rules Lead Sharjah Rents To Decline By 6%Monday, July 09, 2012
According to Asteco, property consultant, rental rates of apartments in Sharjah have fallen by an average of 6% during Q2 due to the tougher tenancy rules introduced in May. The rental rates in some areas also fell by as much as 21%. The annual rents of Sharjah property, which is along the commuter belt in Al Nahdah and Al Khan, fell by 1% in Q2 as compared to Q1. Moreover, during the same time, annual rents of apartments in Al Yarmouk and Mina Road fell by 12% and 21% respectively compared to the previous quarter.
The CEO of Asteco Property Management, Elaine Jones, says that new regulations which have been introduced for shared accommodations require the tenants to give proofs of being the family members of other living mates and provide details of their salaries. She further added that the reason behind the rental declines is that tenants sharing their accommodations have now moved to smaller units which provide a blend of affordability and independence to them.
The basic purpose behind the introduction of new regulations was to limit the number of tenants allowed to share property in the emirate and bar people on visit visas from renting. The strict laws require tenants to show detailed documentation of all the people living in property. Asteco also highlights in its quarterly report that cornice apartments showed a marginal increase of 2% quarter-on-quarter, since they are in better demand.
On the other hand, cost of renting villas in the emirate remained stable. A property of three bedrooms in Al Quoz, Shargan and Al Khan (Mamzar) has a cost ranging between AED 70,000 to AED 77,500 annually. If we look at Ajman, we will notice that along the major thoroughfares like Al Quds, Al Nakheel and Sheikh Khalifa Road, prices have remained stable. On the other hand, the rental rates on Corniche Road and Hamid Road fell on average by 6%.
Jones also highlighted that utility connection issues are still some of the major problems for prospective tenants. It revealed that these issues are mainly in new buildings. The rent of an apartment in Fujairah and Umm Al Quwain remained stable during the quarter. On the other hand, the cost of renting an apartment in Ras Al Khaimah, which fell in Q1, set its track towards stabilization during the end of 2nd quarter.