The residential sector in the Northern Emirates remained flat in the first quarter with a marginal decline in the rental rates being registered at Sharjah and Fujairah, said a report.

The residential sector in the Northern Emirates continued to flatten in the first quarter of 2016, according to PKF Consulting, an international firm of management consultants and industry specialists.

The marginal declines in rental rates took place in Sharjah and Fujairah of two and one per cent respectively. Ras Al Khaimah also recorded marginal drop in rental rates during the first quarter.

The trend in parts of the Northern Emirates was partially linked to a steady flow of residents relocating to Dubai, as more affordable residential supply entered the market in 2015, stated the consultancy in its report.

The weakening demand for residential units in Sharjah and Ajman was somewhat offset by the development of infrastructure (leisure and entertainment facilities).

As the emirates continue to invest in infrastructure development and expand the supply and offering of quality residential buildings, investors' and tenants' perception of the Northern Emirates as a residential destination is likely to improve, it stated.

Third-party reports indicated that sales transactions in the Northern Emirates remained slow, affected by the overall negative sentiment in the residential market in Dubai.

Traditionally, due to the proximity of parts of the Northern Emirates to Dubai, sales activity follows a similar pattern to that of Dubai, stated the consultancy, citing third party reports.

According to data issued by Dubizzle, average sales prices per sq m in Sharjah and Ajman declined by seven per cent in Q1 2016 compared to Q1 2015.

Nonetheless, some of the prime waterfront areas in Sharjah (Al Khan, Al Mamzar) recorded favourable performance levels (+22 per cent, +13 per cent year on year respectively) during Q1 2016.

On the other hand, Al Qasba showcased the worst performance, with average sales rates per sq m declining by 39 per cent y-o-y.

In Ajman, areas such as Al Rashidiya, Ajman Industrial, Al Bustan and Al Hamriya recorded an average sales decline of approximately 20 per cent, as the rate averaged at Dh3,500 per sq m. The highest sales rates were achieved in the Al Rumailah area at 5,300 per sq m, representing a two per cent y-o-y decline.

Major projects anticipated to be handed over in 2016 include the 1,440-unit Pacific Beachfront on Marjan Island in Ras Al Khaimah.

According to the developer Select Group, 80 per cent of the apartments have already been sold.

Furthermore, the launch of Phase Two of Flamingo Villas (additional 68 units) in Ras Al Khaimah is
anticipated by year-end.

In Sharjah, Tilal City (a project worth Dh2.4 billion - $653.23 million) is being constructed. According to the developers, Sharjah Asset Management and Eskan Real Estate Development, there has been a strong interest from potential buyers.

The development will comprise 1,855 plots for flats and villas, and is expected to accommodate up to 65,000 people.

In Fujairah, construction began on the Dh1.7-billion ($462.7 million) Mohammed bin Zayed City.  The development is located near the Hajar Mountains and is anticipated to cater to 10,000 people upon completion in 2019, the report added.-TradeArabia News Service