One of the main benefits of the emirate’s new regulations regarding the whole leasing process for Sharjah residents who recently moved into a new home is clarity on longer-term rental obligations.
The best news for these new renters is that Sharjah has kept the new rules’ initial three-year rent-free clause intact. Furthermore, according to real estate sources, tenants have another important clause that will support them in their upcoming negotiations with landlords.
The landlord is not allowed to raise the rent until two more years have gone if the tenant chooses to accept one before the initial three years are up.
When properly applied, this clause will significantly aid tenants in understanding how much more they will have to pay in rent, with the added benefit of a rent lock-in for the extra two years.
Thus, after two years of that three-year cycle, a tenant may choose to accept a rent increase, which will protect him from further increases for an additional two years following the new agreement.
If Sharjah residential rents keep increasing, a ‘tenant will do well to enter early negotiations with their landlords on what the new increase should be’, said a leading agent. “Then, if the terms are agreed, this way the tenant will end paying less rather than negotiate with the landlord at the end of the no-rent hike first 3 years.”
Estate agents add that as a result, both tenants and landlords have a clear view of rental commitments.
“The new Sharjah rental law reinforces regulations for both tenants and landlords, ensuring stability and clarity,” said Muhammad Ikhlaq, sales and Leasing Manager at Betterhomes. “Traditionally, rental hikes in Sharjah have followed a long-term approach.
“From a tenant’s perspective, renting long-term in Sharjah allows them to experience the emirate’s unique lifestyle while enjoying price stability, making it an appealing option.”
That will be further reinforced by the new regulations. Despite the construction and handover of new apartments and villas, rents in Sharjah have increased by 10–30% overall this year. (At the moment, the Sharjah real estate market is seeing some of the highest end-user buyer demand in the UAE, and it has the capacity to take in far more off-plan launches than are currently taking place.)
Over the last year, apartment rents in new developments have increased by 30–35%, and villa rents by up to 40%.
“This upward trend is likely to continue as new properties are sold at progressively higher prices, pushing landlords to maximize returns on their investments,” said Ikhlaq.
In contrast, older developments have seen a more moderate increase of 15-20%, offering larger living spaces at more affordable rates. Their prime locations, particularly in western Sharjah near the coastline and Dubai, contribute to the strong demand.”
Is the rental gap getting wider?
A landlord will be in a much better position these days if he has a new apartment or villa to rent out. In the emirate, there is a noticeable 40–50% difference in rental prices between older and brand-new homes, with “new villas in particular commanding higher rates.”
How much can landlords in Sharjah raise rent?
Landlords have the right to raise rent based on “fair rent” when tenants’ three-year no-hike period is about to expire.
“Specify the controls for the fair rent and how to calculate it,” according to the executive regulations based on the new legislation. Once more, both landlords and tenants have clarity regarding the future direction of rents.
“For landlords, having long-term tenants who treat the property as their home offers benefits such as stable rental income and reduced vacancy periods,” said Ikhlaq. “This also avoids the hassle of finding new tenants frequently, ensuring property care and maintenance.”
All parties involved in the Sharjah real estate market would want that.
