Five per cent of the annual rent is what landlords generally demand for as security deposit from tenants in the UAE. However, a few landlords of new towers in Sharjah are asking for 20 per cent of the annual rent as security deposit – an increase of 300 per cent over what is charged normally.
That’s not all. Landlords are only prepared to accept one-cheque rent payments for one-bed apartments in new towers in Al Nahda, according to Cluttons, a real estate consultancy. Rents in the Al Nahda area for one-beds have touched Dh41,000 per annum, 28 to 36 per cent higher than the average of Dh30,000 to Dh32,000pa for a medium-quality one-bedroom apartment.
One of the reasons for the price increase has been the increase in rents across Dubai, which is leading to families relocating to the Northern Emirates, particularly Sharjah and Ajman. Shane Breen, Associate Director, Cluttons Sharjah, said: “Sharjah is viewed as the most suitable alternative to those finding themselves out-priced by rising rents in Dubai and demand is outstripping supply for the first time since the global financial crisis.
“We also note landlords offering tight payment terms, in a move away from flexibility.” Moreover, demand has now started to outstrip supply in Sharjah. However, Sharjah Municipality offers tenants a protection period of three years from the start of a new lease with rates then moving to “market rate” on renewal in the fourth year.
In April, Emirates 24|7 reported that average apartment rents in Sharjah rose by 10 to 15 per cent in the past six months, with another surge expected in the coming six months, says a new report.
Apartments in popular areas such as Al Majaz, Al Nahda and Al Qassimiya saw an average rental increase of 10 to 15 per cent since October 2012. In areas such as Sharghan, Al Fisht and Al Falaj, villa rents went up a similar 15 per cent due to strong growth in demand and a lack of quality stock.
Cluttons believes that this will cause an increase in disputes between tenants and landlords via the rental committee hearings within the Municipality. Sharjah Municipality has implemented stringent rules for attesting rental contracts and allowed only three people to stay in a studio apartment; four in one-bedroom; six in two-bedroom and nine in three-bedroom apartments.
A statement from the communications arm of the government of Sharjah in April 2012 said the government had issued a directive that bachelors residing collectively in families-only residential zones must vacate the premises as their presence poses a concern to families living in such areas.
