Asteco: Northern Emirates Q3 2011 Report
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The road to home finance has been a long one for the Kingdom, but with its highly anticipated mortgage law edging ever closer to ratification, would-be homeowners and financial institutions are gearing up for a new era of opportunity.
With the announcement this year of a US$66.7 billion initiative to address the demand-supply imbalance in the Kingdom’s housing market, social infrastructure spend is topping the Government agenda as it focuses on building affordable homes for the future.
The South-East Asian island has seen a number of distinctive developments come to fruition over the past few years as the country further establishes itself.
Sharjah apartment rental rates have declined by 5% over the last three months, mainly due to the summer holidays/Ramadan and tenants moving to newer buildings with better facilities or relocating to Dubai as a result of declining leasing rates.
Landlords are increasingly offering incentives to attract/retain tenants, including 14-month lease terms, 12 instalments and no commission fees.
Abu Shgharah has experienced the highest drop of 10% due to tenants moving from older units to newer developments.
Sharjah villa rentals have also softened by 4% for similar reasons.
The office market has witnessed declines of 6% on average since Q2 2011. This is due to businesses relocating to new developments in more popular areas within Sharjah or opening offices in Dubai, which is more convenient and requires less paper work.
Rental rates in the other Northern Emirates, namely Ajman, Ras Al Khaimah, Umm Al Quwain and Fujairah, remained stable.
Ajman has seen an increase in supply with the handover of various new projects including Falcon Towers, which comprises approximately 840 apartment units spread over seven residential towers as well as one office tower. However, demand is low due to declining rates in Sharjah causing people to relocate there.
New developments are also being handed over in Fujairah and RAK, which will ultimately result in people relocating to the newer buildings and will have an adverse effect on rental rates in mature projects.
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