Apartment and villa rental rates in the northern Emirates
were mostly unchanged in the fourth quarter of last year as ongoing problems
with connections to electricity, water and sewage continued to slow the pace of
supply, according to the latest report from leading property consultancy
Asteco.
Prices are expected to remain stagnant in early 2012 but
are likely to fall in the latter half of the year as more supply enters the
market.
In order to spur demand over the past three months,
landlords in Sharjah and Ajman offered rent-free periods of one to two months
with no commission for new projects there.
"The demand trend for apartments in the northern
Emirates has primarily been for families looking for larger two and
three-bedroom units," said Elaine Jones, CEO, Asteco.
"Families tended to relocate within the same emirate
due to children's schooling and value-for-money units," added Jones.
Apartment rents in Sharjah were the highest in the
northern Emirates, while rents in Umm Al-Quwain were the cheapest.
The average yearly rental rate for a three-bedroom
apartment in Sharjah ranged from AED35,000 to AED63,000 in the fourth quarter,
compared to between AED35,000 and AED40,000 in Umm Al-Quwain.
Rental rates for three-bedroom villas in Sharjah went for
an average of AED70,000 in both Al-Khan and Shargan, and AED77,500 in Al-Quz.
Sales activity for both residential properties and
offices in the northern Emirates was limited throughout the year and some
completed buildings in Sharjah, Fujairah, Ajman and Ras Al-Khaimah remained
empty due to a lack of utility connections and inadequate sewage.
Several buildings in Fujairah and Ras Al-Khaimah are
expected to get electricity connection this year resulting in an increase in
the number of available units and therefore a drop in rental rates.
However, connectivity problems throughout the northern
Emirates as a whole will continue and are expected to be resolved at a slower
pace due to the high number of buildings marked for completion and handover.
Bureaucracy continued to prompt more existing businesses
in Sharjah to move to neighboring Dubai and Ajman Free Zone in the fourth
quarter with other emirates expected to compete heavily for Sharjah business
early this year.
