Northern Emirates property market ‘stagnant’
Dubai, January 19, 2011
The Northern Emirates property market has stayed relatively stagnant over the past three months, with minimal price or rental movements, said a report.
Continued supply, most notably in Sharjah will at some stage put downward pressure on rental prices but connection to electricity, water and sewerage continues to be a problem, slowing the pace of supply throughout the Northern Emirates, according to the latest data from Asteco Property Management.
“During the past three months, the Northern Emirates has remained at a standstill, with rental rates for apartments, villas and offices similar to the previous quarter. Although new supply is expected to drop rates further, delays in the actual handover of units is likely to prolong the process,” said Elaine Jones, CEO, Asteco Property Management.
The ripple effect of affordability predominant in the third quarter of 2010, which saw tenant migration to neighbouring emirates such as Dubai continued in the fourth quarter, albeit at a lower rate, consistent with the slowing rate of decline in Dubai.
The Asteco Northern Emirates Q4 2010 report reveals that three-bedroom apartments in Sharjah are priced in a range from Dh37,500 ($10,210) per annum in Al Yarmouk to Dh46,500 in areas such as Al Khan and Al Nahdah. Umm Al Quwain, meanwhile, is still the most affordable emirate with average rates of Dh25,000 per annum.
The Sharjah villa market did not record any price changes from third quarter to fourth quarter with Al Quz, therefore, remaining the most expensive residential area for villas at Dh82,500 for three-bedroom properties. Elsewhere, Al Khan, and Shargan commanded Dh80,000 and Dh75,000 respectively for three-bedroom villas.
“A number of residents living in the Northern Emirates have moved around internally, seeking value for money and better located units however, there has been no evidence of an increase in population to occupy the vacant units,” the report said.
In Sharjah, there are a number of buildings that have been completed for some time; however, utility connections have severely delayed handover.
Fujairah, Ras Al Khaimah and Ajman are all experiencing similar problems, with some projects scheduled to be completed over the course of 2011. However, it is unclear whether any of these emirates will see any utility connection in the short term, according to the report. – TradeArabia News Service