(MENAFN - Khaleej Times) Apartment rents in Sharjah dropped six per cent on average and in some areas fell as much as 21 per cent in the second-quarter because of increasing vacancy rates in some areas and the introduction of stricter tenancy rules, Asteco Property Management said in a report on Sunday.
"New regulations regarding shared accommodation have been introduced with tenants in Sharjah required to disclose their salaries and confirm that people living together are family members only," said Elaine Jones, chief executive officer of Asteco.
"Subsequently, we have seen tenants who previously shared accommodation, move independently to more affordable smaller units, prompting a decline in rental rates."
Tenants in Sharjah must now provide detailed documents for all people staying in their home under strict new laws introduced in May.
Rents for apartments along the Mina Road and in Al Yarmouk declined 21 per cent and 12 per cent, respectively while property along the commuter belt in Al Khan and Al Nahdah fell just one per cent compared to the previous quarter.
Apartments in the Corniche area saw a marginal gain of two per cent, quarter-on-quarter, Asteco said in its quarterly report on property prices in the Northern Emirates.
The cost of renting a villa in the emirate remained steady with a three-bedroom property in Al Khan (Mamzar), Shargan and Al Quz costing around Dh70-77,500 annually.
Neighbouring Ajman also saw a slight downturn in Q2 with decreases in apartment rental rates for studio and one-bedroom units, particularly in the Al Naimia area and new buildings on the Corniche. While there was no change in rental rates along major - thoroughfares such as Shaikh Khalifa Road, Al Quds and Al Nakheel in the second quarter, both Shaikh Hamid Road and Corniche Road rents fell by an average of six per cent.
"Ongoing issues with utility connections, especially those in new buildings, is still a major issue for prospective tenants who are placing generator-powered buildings firmly at the bottom of their housing wish lists," said Jones.
The cost of renting an apartment in Umm Al Quwain and Fujairah remained steady while Ras Al Khaimah started to stabilise toward the end of the second quarter, the report said.
Transaction volume in the Sharjah office market followed first quarter trends with limited movement and rents remained static across the major commercial hubs, with the exception of Al Wahdah, which dropped by five per cent to Dh484 per square metre.
In contrast, Dubai's real estate market is showing robust signs of resilience with both rents and prices of quality properties recording an upturn after remaining in the doldrums for years.
"Quality residential developments in Dubai bounced back during the second quarter after a stable first quarter, with average rent increases of six per cent for apartments and nine per cent for villas," said Asteco in a separate report. Sales prices recorded double-digit increases in three developments, with rises of six-eight per cent elsewhere, it said.
"After three years of declining rates and limited sales activity, the real estate market is on the way to recovery, with established quality communities showing increases in values and higher transaction volumes," said Elaine Jones, chief executive at Asteco. Towards the end of first half in 2012, rentals in established quality communities achieved average increases of six per cent.
Apartments in Dubai Marina and Downtown Dubai were the most sought after witnessing a 10 per cent increase, with a two-bedroom apartment fetching between Dh90,000 and Dh120,000 per annum. "Tenants are relocating in search of value-for-money, one- and two-bedroom apartments as well as three- and four-bedroom villas are the preferred unit types. In terms of rates, quality well-managed developments, will continue to set the pace," said Jone.
