Sharjah's Rising Rental Market Dynamics

The Real Estate Market Dynamics in Sharjah: High Rents Expected Over the Next Two Years

Sharjah's real estate market is showing significant growth, and industry experts predict that rental rates will remain high over the next two years. Although the rate of increase is slower than in other emirates, continuous population growth and new residential projects are boosting the market.

Price Trends and Growth Causes

According to Saeed Ghanem Al Suwaidi, chairman of the Real Estate Sector Business Group at the Sharjah Chamber of Commerce and Industry, rental rates have increased by 5-10% recently and the market may stabilize at a high level over the next two years. This growth is partly due to Sharjah’s rapidly growing population, which reached 1.8 million in the 2022 census, up from 1.4 million in 2015. Notably, 2020 saw a significant increase as the UAE economy quickly recovered from the impacts of the Covid-19 pandemic.

Another significant factor contributing to the rise in rental rates was Sharjah's decision to allow foreigners to own property at the end of 2022. This provided a substantial boost to the local real estate market, particularly with projects from renowned developers such as Arada, Alef Group, and Shurooq.

Market Prices and Supply Situation

Data for the third quarter show a significant increase in Sharjah's rents: a studio apartment can cost up to 12,000 dirhams annually, while a three-bedroom apartment can reach up to 100,000 dirhams. This represents a 3% increase from the previous quarter and an annual increase of 16-19%.

According to the real estate consultancy firm, Asteco, Sharjah leads the northern emirates market in the number of new developments and project launches. This creates new opportunities not only for investors but also for tenants.

Impact of Rental Rates on Market Players

Issa Ataya, CEO of Alef Group, believes that rising rental rates benefit investors as increasing demand offers new economic opportunities. He added that the growing rental rates attract attention from both local and international investors.

Meanwhile, Muhammad Qasim Ikhlaq, sales and leasing manager at Betterhomes Sharjah, noted that rental rates for some newer properties increased by up to 20% last year, partly exacerbated by Dubai’s higher rental prices.

Ikhlaq expects the growth in rental rates to slow as new properties come onto the market and the rental market stabilizes. This will enable organic growth, better reflecting Sharjah's population needs.

Tenant Strategies Against Rising Prices

Tenants are trying to adapt to rising rental prices. Some negotiate with landlords, while others move to new or renovated properties that offer lower prices outside of communities owned by multiple landlords or companies.

Forecast for the Future

The future of Sharjah’s rental market remains promising, especially in light of new developments and continuous population growth. Current market trends suggest stabilization, while rental rates are likely to remain high, creating a favorable situation for both investors and tenants.

Sharjah uniquely combines cultural and economic appeal, attracting both new residents and investors, thereby sustaining the emirate’s economic growth.