Gulf News, 19 December, 2018
Ajman’s real estate market has long been interlinked to Dubai’s performance, with rental and sales prices often seen swinging in tune with the latter. But the UAE’s smallest emirate is gradually coming into its own as a rising population and economic activities continue to attract buyers and tenants looking for quality residences at affordable prices.
Ajman was one of the first few emirates in the UAE to offer 100 per cent freehold to foreign investors. In fact, it was the second emirate after Dubai to introduce the freehold property law back in 2004. This has played a huge role in propelling the growth of the property market.
Real estate investment
Primary investors in Ajman are mostly from the Levant (Palestinians, Jordanians, Iraqis, Syrians, Lebanese, and Egyptians) and the South Asian region (mostly Indians and Pakistanis).
“Based on our experience in the emirate, some of the popular freehold areas in Ajman are areas like Al Rawdah, Al Mowaihat and Al Zahra. These areas attract mainly private developers with most projects encompassing “two to five villa developments,” says Imran Hussain, Head of Residential Valuations at Colliers International MENA.
He says these villas are very popular among large families that require four to six bedroom villas ranging from Dh1.2 million to Dh2.1 million. The price range is dependent on many factors such as specifications, quality, location, layout, built-up area and plot size.
In Ajman, Colliers highlights, the apartment market caters to a large variety of budgets. For example, in Emirates City the price of a typical one-bedroom apartment starts from approximately Dh100,000 when compared to a similar apartment situated on the Corniche road, which starts from approximately Dh500,000. In some new developments the starting prices can be even more.
“The prices in Ajman are interdependent with Dubai and Sharjah’s real estate market. As a result of more affordable residential units entering the Dubai and Sharjah residential market, the overall market has become more competitive,” says Ali Siddiqui, research analyst at Reidin.
With rents becoming more affordable in Dubai and Sharjah, he says tenants are now migrating from one emirate to another to get closer to their workplaces.
“The current pressure on rentals has forced landlords to offer various incentives and even drop their rents further to keep their units occupied,” says Siddiqui.
In the last three months, Reidin research showed, sales and rent prices have fallen across the UAE due to the inflow of new residential units and various economic factors.
“In Ajman, rent prices softened further by 6 per cent (the highest among all emirates) in the last three months as residents can be seen moving out of Ajman to get closer to their workplaces, while some residents are seen moving into larger units within Ajman itself,” he says.
Sales prices, on the other hand, he adds, displayed a minimal drop of 0.4 per cent in the last three months.
Despite the continuous fall in prices, industry experts said rental yields provided by residential properties in the UAE remain strong and healthy when compared to other major global cities.
“The smallest emirate of the UAE, Ajman, currently provides the highest average gross rental yield of 8.4 per cent in the apartment segment in the UAE,” says Siddiqui.
The Ajman government has been increasing investments in the real estate and construction sectors.
With the government taking on many initiatives while simultaneously investing in infrastructure, Ajman’s Composite Business Confidence Index, released by the Department of Economic Development (DED), for the first half of 2018, rose to 116 points, indicating a strong positive business forecast for the emirate.
The Ajman 2021 vision also focuses on tourism as a strategic sector, and the emirate’s tourism infrastructure witnessed significant improvement in recent years. The supply of hotels and hotel apartments increased from 30 establishments in 2014 to 39 units in Q3 2018, collectively offering over 6,100 beds according to tourism statistics released by the Department of Tourism Development.
“Ajman’s Vision 2021 will be key to the real estate sector in Ajman. The vision aims to increase the percentage of skilled workers in its labour market, improve local infrastructure and public services,” says Siddiqui.