Sharjah losing out its tenants to Dubai

Frustrated with growing power outages and infrastructure woes, the residents in Sharjah are opting to move out of the emirate, to take advantage of the dropping rentals in Dubai, the Gulf News reported.

While Sharjah has been the destination of choice among those on the look out for affordable rentals, it has now suddenly slipped in the popularity charts. Dubai, being more affordable, is the main reason for this change in scenario, coupled with the worsening power supply situation in the emirate.

The real estate leasing firms in Dubai have been reporting increase in queries from tenants (particularly from Sharjah-based clients) in search of properties in Dubai, reports Asteco, leading property management and leasing firm.

The CEO of Asteco, Elaine Jones agrees that the impact of power cuts in Sharjah is severe, and will no-doubt drive away the tenants. On the other hand, the rents in Dubai have dropped to their 2005-06 levels. This seems a positive change, as Dubai has now turned out to be an affordable location to live in, with growing number of affordable properties, good infrastructure and lifestyle. Hence, Asteco is witnessing a growing trend of people shifting their base from Sharjah to Dubai.

A recent survey by YouGov Siraj Omnibus highlighted the fact that atleast 24 percent of the Sharjah residents who were surveyed, were considering moving out of the emirate, with atleast two-thirds planning to move into Dubai during the next one year.

The Survey revealed that 63 percent of those who moved out did so due to the power shortage in the emirate. Among the other issues are traffic, water logging during rains, the comfort to live and work in Dubai, and more such aspects.

The Assistant Manager – Residential Sales and Leasing at Better Homes, Paul Musson, commented that the tenants in Sharjah experienced the same situation last year too, and it is only natural that they assume this to be an ongoing issue.

A recent report by CBRE (CB Richard Ellis) states that Dubai will see about 31,194 new properties towards the end of this year.

The YouGov Siraj survey revealed that the areas that have drawn maximum migrant tenants are Al Qusais (35 percent), Bur Dubai, Karama and Discovery Gardens (5 percent each).

The Director at YouGov Siraj, Himanshu Narang, said that Dubai continues to grow as destination of choice, as it offers excellent infrastructure and good value owing to declining rentals.

Apart from the shifting market trends in rental market, education and employment will be the major factors in determining where a family would live.

Even in this aspect, Dubai scores over Sharjah, as it has seen considerable increase in the number of schools over the past years. Even the transportation in the Metro has improved a lot, said Jones.

Another factor contributing to this growing tendency of shifting to Dubai from Sharjah is the incrasing power tariff. SEWA (Sharjah Electricity and Water Authority) has increased its electricity tariffs by nearly 50 percent since last year.

According to property analysts, the actual movement of tenants owing to overall power situation in the Sharjah emirate will get more evident during contract renewals.

Posted on 2/9/2010

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