Apartment rental rates across the Northern Emirates witnessed a significant drop in the first three months of 2018 and it was likely to plunge further amid downward pressure on key markets such as Sharjah and Ajman, said a report.
 
There has been shown an annual decline in rental rates of 11 per cent on average, with the most significant drop recorded in the Rolla area in Sharjah and for high-end units in Ajman, according to real estate expert Asteco.

Apartment rental rates across the Northern Emirates have been witnessing an average decrease of 1 per cent since Q4 2017. Studios to three-bedroom apartments in Sharjah and Umm Al Quwain reported a decline of 1 per cent over the quarter, while over the course of the year, rentals dipped by 10 per cent to 13 per cent and 11 per cent to 12 per cent respectively, stated Asteco in its Northern Emirates Real Estate Report Q1 2018.

In Ajman, rents for affordable housing units fell by 1 per cent in Q1 2018 and by 12 per cent year on year. High-end inventory saw a drop of 3 per cent over the quarter and 11 per cent between Q1 2017 and Q1 2018.

Asteco said studios to three-bedroom apartments in Ras Al Khaimah and Fujairah recorded declines of 1 per cent over the quarter, and over the course of the year, rentals dipped by 10 per cent and 13 per cent respectively for affordable housing units.

Meanwhile, high-end units reported an annual decrease of 8 per cent in Ras Al Khaimah and 10 per cent in Fujairah, it added.

John Stevens, the managing director of Asteco, said: "We expect a further pressure on apartment rental rates, as recovery rates in the Northern Emirates are directly impacted by the delivery of supply in Dubai."

"In the Northern Emirates, government priorities remained geared towards infrastructure development. In addition, more master plan and/or large-scale developments are starting to materialise including three projects worth Dh2.7 billion including Maryam Island, initially announced in 2016 by Eagle Hills and Shurooq, a strategic alliance to develop Sharjah’s real estate market and drive investment," he noted.

Stevens pointed out that the launch of residential developments was on the rise in the Northern Emirates, with projects spanning a total of over 100 million sq ft of land area scheduled for completion by 2025 in Sharjah alone.

Sharjah apartment rental rates across various locations decreased by 1 per cent on average in Q1 2018 and by 12 per cent year-on-year.

The most significant drop of 4 per cent was recorded in Rolla, whilst rates remained unchanged over the quarter in areas such as Abu Shagara, Al Butina, Al Yarmook and Al Wahda. Annually, records show rental rates fell by 14 per cent in Al Wahda, 13 per cent in Abu Shagara, 9 per cent in both Rolla and Al Yarmook, and 7 per cent in Al Butina.

Meanwhile, office rental rates continued to fall by 2 per cent on average. Rents were stagnant in Q1 2018 in areas such as Buhaira Corniche, Al Qasimia, Clock Tower Roundabout, Al Yarmook and Industrial Area, while Al Taawun and Al Wahda reported a drop by 5 per cent and 2 per cent respectively.

Whilst no major residential and office projects were delivered in Q1 2018, Sharjah expects additional residential supply on completion of Nasma Residences Phase 1 and Al Zahia Residences, both due for handover by end-2018.

Summarizing Asteco’s outlook on real estate developments, Stevens said: "The recently implemented legislation that allows non-Arab nationals without a UAE residency visa to purchase properties in Sharjah on a 100-year renewable lease is expected to stimulate demand and ultimately increase foreign investment in the real estate market."

"In addition, continued efforts to develop the private sector and emphasis on diversification strategies are anticipated to strengthen the economy and shape a favorable environment for job creation, business growth and investment," he added.-TradeArabia News Service