International real estate consultancy, Cluttons reports despite fiscal adjustment in the region in response to declining oil prices, Expo 2020 and the introduction of VAT will play a key role in boosting the country’s property market.

Cluttons’ 5^th annual UAE Property Market report says economic expansion is expected in 2018 and 2019, underpinned by higher spending levels, expected to result in widespread stability and marginal growth in some real estate segments by the end of 2018.

Faisal Durrani, head of research at Cluttons said: “We see a number of positive indicators for the UAE’s property market as we head towards the fourth quarter of 2017. While Expo 2020 is well documented as the shining light on the horizon, we view the government’s plan to introduce a formal tax regime as a tremendously positive step and are confident that it will help cement much-needed alternative revenue streams. Once the market absorbs the changes caused by the introduction of VAT, we expect to see a resumption in growth.”

Sharjah’s position as an affordable family-friendly alternative to Dubai helps to boost the emerging profile amongst the expat community, which is reflected in the rising level of demand. 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.”

The villa market in Sharjah continues to offer good value for money when compared to Dubai and Abu Dhabi- Image credit- Cluttons

According to Cluttons’ report, rents are likely to end the year about 5% down yoy, however the villa market should grow 3% to 4% by the close of 2017. Apartment rental rates are forecast to remain weak, 10% down from December 2016.

The commercial market shows resilience in Sharjah office rents in Al Soor and the prime and fringe areas of Al Majaz, with rents remaining unchanged during the first six months of 2017.

Durrani said “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.”

For further detailed information view the full report here, or email Faisal Durrani from Cluttons via the contact details below.

See also:

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How to buy and rent property in Sharjah

How to buy and rent property in the UAE