Suzanne Eveleigh, Clutton’s head of Sharjah, explained, “The villa market in Sharjah continues to offer good value for money when compared to Dubai, and Abu Dhabi, which means households faced with rising living costs in these emirates are increasingly seeking out family home options in Sharjah. This has resulted in a turnaround in the performance of the villa market, as demand has now edged ahead of supply.
According to Cluttons’ report, rents on average are likely to end the year about 5% down on this time last year, however the villa market will outperform, with growth of 3% to 4% likely by the close of 2017, following a 1.5% rise in the first half of the year and underpinned by limited supply levels. Apartment rental rates on the other hand are forecast to remain weak, ending the year about 10% down on December 2016.
In the commercial market, the report indicates that the resilience of Sharjah office rents in Al Soor and the prime and fringe areas of Al Majaz, that began earlier this year, has persisted, with rents remaining unchanged during the first six months of 2017.
Commenting on the office market, Durrani added, “The small size of Sharjah’s Grade A office market has kept it relatively well-insulated from more macro issues compounding global growth, and there remains little in the way of new demand streams, aside from the constant requirements from the public sector. We expect further decreases in average office rents in the region of AED 5 psf before the year is out, taking the total decline during 2017 to about AED 10 psf.”
Abu Dhabi
Abu Dhabi’s economy remains intrinsically linked to the hydrocarbon sector, which has been a critical engine of growth for a range of supporting and related economic segments, each of which plays a key role in creating fresh demand for both residential and commercial property in the emirate.
According to Cluttons’ UAE report, the first six months of 2017 have seen a continued lacklustre performance of residential values in Abu Dhabi’s main residential investment areas, with values overall dropping by 0.9%. The seemingly slower rate of decline has improved the annual change to -6.3% in the 12 months to the end of June, from -7.5% at the end of Q1. This latest change now leaves average residential values standing at just a little over AED 1,150 psf. Apartments posted larger corrections in the six months to the end of June of -1.4%, compared to just -0.3% for villas.
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