Sharjah has historically been overshadowed by its much larger counterpart; however, the story is rapidly changing. The Sharjah Growth Corridor is transforming the way investors see the emirate. New highways are being built and residential communities, business centers, and lifestyle attractions are being developed, which is making the corridor far more than an idea for future growth; it is developing into a legitimate competitor as a long-term destination for real estate investment.
Why the Sharjah Growth Corridor Is Gaining Attention for Real Estate Investment
One reason why the corridor will be attractive to investors is its strategic location. The corridor provides transportation links connecting various major districts within Sharjah and will provide direct links to Dubai. Professionals working in Dubai that would like to purchase homes at lower price points can take advantage of these links because they reduce travel times and make cross-emirate living feasible. As infrastructure develops, so does demand for housing. Demand drives appreciation of housing values and increases confidence in real estate investment.
Infrastructure as the Foundation of Growth
Major road improvements, and improved transportation options across the emirate of Sharjah have created better access to all parts of the emirate than at anytime in the past. With continued interest in areas adjacent to Sheikh Mohammed Bin Zayed Road and Emirates Road, we are seeing both increased demand for land by developers and increased interest by homebuyers. As such, with easier access to areas with high foot traffic due to new residential construction, it is anticipated that there will be significant opportunities for retail growth and the creation of mixed-use projects.
While shorter travel times are one benefit of infrastructure; it can also provide a sense of confidence to investors. Typically, investors rely heavily on government-backed development plans prior to investing their capital. Plans within the Sharjah Growth Corridor (SGC) emphasize the long-term goal of creating sustainable communities through the inclusion of schools, health care facilities, and retail clusters. This type of comprehensive community plan allows for the creation of stable and secure investments rather than speculation in real estate.
Affordable Entry Points with Upside Potential
One of the main driving factors behind the corridor’s popularity has been the cost of purchase. Sharjah is positioned at an entry point that is far less expensive than other areas in Dubai when it comes to both apartment and villa purchases. With respect to the availability of affordable purchasing options for larger sized homes or prime location purchases, the affordability of Sharjah allows investors to enter the market and purchase properties without breaking their budget.
Additionally, this pricing structure will allow first-time homebuyers as well as those who are interested in using real estate nvestment as a way to diversify their portfolios (mid-range investors) to consider entering the real estate investment arena. For example, a family looking to buy a three-bedroom townhome may be able to do so at a much reduced price in one of Sharjah’s emerging areas, versus a comparable community in Dubai. As new retail centers and amenities become available in these emerging communities, early buyers can benefit from increased property value over time. Additionally, as more people move into these communities, rental demand increases and therefore potential rental income associated with real estate investment becomes stronger.
Rising Demand from End Users
There’s no speculative aspect to the Sharjah Growth Corridor; it’s driven by true and significant residential need. In terms of residential need, many people want (1) space, (2) affordability and (3) an environment that creates a sense of community. Many of the recent and current projects located throughout the corridor are developing parks, schools, and local shopping opportunities in each of their developments to help with daily living needs and support long-term tenancy.
The development of a stable occupancy rate supports strong yields from rentals. The higher the occupancy rate for any given property, the less likely it will be vacant and the better the potential for rental income. Those investors focused on generating steady and predictable returns and not on quick “flips” see the corridor as a strategic long-term in real estate investment due to its demographics of young working professionals and growing families that provide ongoing and sustainable demand for rental housing.
Commercial Expansion and Job Creation
While residential development can provide a boost to an area, as a sole source of economic activity, it will eventually lose its momentum. Growth is sustained by office development and other commercial projects. Retail and light industrial developments are also being strategically located throughout the corridor. As companies seek to lower operating costs (and therefore lower employee cost) by moving or expanding into the Sharjah area, job opportunities increase.
As new jobs become available in an area, employees are likely to choose to live near where they work. This creates a cycle that supports long-term in real estate investment for several reasons. First, it stabilizes population growth in the same general area which ultimately contributes to the overall success of the project. Second, those investors that understand how the commercial/office development of a corridor works tend to be positioned first at the leading edge of the development of the emerging commercial nodes.
Long Term Vision and Smart Planning
Sharjah’s management is focused on achieving equilibrium in its urban growth. Rather than building as quickly as possible and then ceasing all construction for an extended period (which would create an oversupply and cause the value of properties to plummet) they have adopted a phased project strategy. This type of development will maintain the amount of new inventory being introduced to the market at a consistent rate; thus, reducing the potential for the entire market to become saturated at one time and, therefore, help to keep prices stable for investors.
In addition, Sharjah’s smart master-planning strategy incorporates parks and community services into each residential neighborhood, which is designed to improve the quality of life for residents by creating environments where people can enjoy both the convenience of walking distance shopping and dining and access to modern community amenities. With the increasing desire for high quality lifestyles throughout the UAE, new residential neighborhoods with walkable community designs and modern community amenities are becoming increasingly attractive options for foreign and local real estate investors alike.
Market Resilience Compared to Overheated Zones
Sharjah’s property market has historically experienced steady and relatively slow price increases and decreases for real estate investment. Moderate, stable price movements are attractive to more conservative investors who prefer to avoid excessive price volatility. The Sharjah Growth Corridor represents a similar model for growth as opposed to rapid speculative price movement that is based on hype. The Sharjah Growth Corridor supports a steady, measured increase in prices due to both the development of supporting infrastructure and the demand for housing within the area.
Investors seeking to obtain predictable rental income and steady long-term appreciation would likely view an environment with these characteristics as being lower risk than environments that have unpredictable fluctuations in pricing. In general, when investors hold onto their properties longer, they will receive greater total return on their investments through the compounding effect of the interest earned during those time periods.
Strategic Guidance from Local Experts
Making a smart decision in a new corridor is dependent on understanding the local area. As an intermediary for Clients of Keyspace Realty and Keyspace Dubai, we provide clients the tools necessary to make educated decisions regarding their real estate investment by providing them with the tools to understand the Property Data, Rental Benchmarks and Future Development Plans prior to making any commitments. We analyze market trends in both Sharjah and Dubai so that we can determine which markets are offering better yields and the potential for growth. The Everything Sharjah website will provide you with information about Schools, Amenities and Neighborhoods in Sharjah so that you may be able to get a feel for what your lifestyle will be like if you were to invest in this area. By utilizing the expertise in real estate investment as well as the experience and knowledge of the local community, we assist our clients in making the best decisions possible based upon the current and actual conditions in the real estate marketplace rather than assumptions.
Comparing the Corridor with Dubai Alternatives
Investors in Sharjah are frequently comparing their investment to Dubai. Although Dubai is well known for its international appeal, many high priced areas may be limiting the investor’s yields as property values rise. Sharjah has a different model that will complement an existing investment portfolio, rather than compete with them; by being a secondary market area to some of Dubai’s most expensive and prime areas, Sharjah has lower cost barriers to entry and also provides similar opportunity to grow your asset.
For portfolio diversification, by investing in other Emirates, you reduce the risks associated with concentration. Investing in properties within the corridor will allow you to develop a balanced approach, where you have both premium assets and growth-oriented assets, which in turn will strengthen the overall resiliency of your real estate investment.
Future Outlook
Looking forward, The Sharjah Growth Corridor has all the characteristics of long-term success with continued growth in both the population and infrastructure, which will create a consistent demand for housing. As the community continues to grow and more people discover the advantages of living and working here, we can anticipate that the number of transactions will also continue to rise.
There is no rush when it comes to investing in real estate, investors who invest in areas undergoing infrastructure growth will ultimately be rewarded the most. The corridor’s combination of thoughtfully designed homes with excellent access to transportation will provide an attractive option for both domestic and foreign investors.
Frequently Asked Questions
Is the Sharjah Growth Corridor an attractive option for a first-time investor?
Yes. The low prices and high rental demand of the corridor will allow you to easily enter the real estate investment business.
How does the Sharjah Growth Corridor rental yield compare to the Dubai Market?
The Sharjah Growth Corridor typically has better rental yields than the Dubai Market as the cost of acquiring is usually much less expensive, which makes the Sharjah Growth Corridor a more profitable area to invest in real estate.
What type of properties are most in demand in the corridor?
The townhomes, family apartment units, and mid-rise multi-unit residential homes have historically shown strong demand and support stable real estate investment returns.
Will the Sharjah Growth Corridor experience long-term appreciation?
While no one can guarantee how well the Sharjah Growth Corridor will do in terms of long-term appreciation, the growth in infrastructure and increasing population trends suggest that real estate investment in the corridor could be a smart move in the long run.
Should I focus my investments in either residential or commercial units?
Residential and Commercial properties both have the opportunity to perform well. While residential property generally provides a constant stream of rental income, Commercial property may provide even greater rental yield depending upon the location of the unit and the quality of the tenants. Be sure to carefully analyze all options to ensure that each investment aligns with your personal and financial goals.
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