Can Sharjah Expect Elevated Rent Increases in 2024?

Tenants Witness Landlords Opting for Rent Increases to Counter Inflation

Tenants and property enthusiasts have been keeping a close eye on Sharjah's real estate scene, curious about the prospects of rental hikes in the coming year.

Sharjah has maintained a relatively stable rental market in recent times. However, as we approach the year 2024, tenants and landlords alike are contemplating whether the current trend of moderate rent increases will persist or if more significant hikes are on the horizon.

With whispers of potential increases, the emirate seems to be on the brink of changes in its rental market. Contrary to expectations, the Sharjah property market has shown a unique trend, with landlords opting for cautious approaches during lease renewals.

Stability Amidst Anticipation

As the year progresses, tenants in Sharjah have not experienced any significant rent spikes during renewal periods. Surprisingly, any increases have predominantly hovered around or below the 5 per cent mark, a relief for many residents. This restrained pattern persists despite numerous tenancies reaching the end of the mandated 3-year rent freeze, a feature of contracts entered into during 2020 and early 2021.

Notably, landlords are showing a keen interest in renewals rather than escalating lease rates significantly. Their focus appears to be on maintaining stable cash flows while steering clear of any drastic decline in occupancy rates. This strategy comes amidst stiff competition posed by newly completed residential units in Sharjah's popular areas. The emergence of residential units in the Academic City district has particularly caught the attention of first-time residents in the emirate.

Insights from Market Experts

According to a report by Asteco, rental movements in Sharjah have been relatively subdued, with a modest year-to-date increase of around 4 per cent in popular residential areas. However, sharp rises around 6 per cent have been witnessed in new residential communities, attributed to upgraded amenities and superior-quality apartments.

Looking ahead, some industry insiders predict a potential upturn in rent across established neighborhoods and apartment buildings by 2024. As Sharjah continues to witness an influx of residents, older residential structures are gradually filling up, driven by demand from more budget-conscious tenants.

Dynamics at Play

Landlords, aiming to preserve overall occupancy levels in their properties, are cautious about drastic increases. Moreover, the completion of new residential projects in the bustling Academic City district has intensified competition. The lure of superior-quality apartments and enhanced amenities has driven notable rental spikes, particularly in these newly developed communities.

Sharjah's established residential neighborhoods have, for the most part, witnessed restrained rental movements, with an average rise of about 4% in popular locations. However, high-rise residential communities have seen more substantial increases, averaging around 6%. The allure of improved offerings in these modern communities has enticed tenants, contributing to this surge.

What to Expect

With projections resembling trends seen in Dubai and Abu Dhabi, a faster pace of rental growth might unfold in Sharjah by the latter half of 2024. Tenants, both renewing leases and signing new ones, could encounter mounting pressure, potentially triggering noticeable changes in the rental landscape. This anticipated shift could also spill over to neighboring emirates like Ajman.

While the rental market in Sharjah maintains stability, property market sources suggest that established neighborhoods and apartment buildings could witness more significant rent increases in the latter half of 2024. The emirate, mirroring the growth trends in Dubai and Abu Dhabi, is experiencing an influx of residents, filling older residential buildings, especially among budget-conscious individuals.

As 2024 unfolds, tenants in Sharjah are keeping a keen eye on the rental landscape, wondering if the anticipated rent hikes will materialize. Contrary to expectations, the Sharjah property market has shown a unique trend, with landlords opting for cautious approaches during lease renewals.