Fujairah has a peculiar real estate scene with rents often out of sync with the national trends. At the time of property and economic boom, many from outside of Fujairah chose to base themselves here to escape the red-hot rents elsewhere. This, and the lack of housing units in the emirate, pushed the prices further up for residents of the East Coast.
The sudden drop in rents in Dubai, Sharjah and Ajman, in particular, along with more housing units entering the market, here in the city of Fujairah, has eased the pressure on many Fujairah residents. Still, many feel bemused at the current rent comparisons with other emirates that had, at one time, more than twice the price range of that in Fujairah.
Helmi Al Minshawi, is a real estate agent with East Coast Real Estate; he has worked in Fujairah for years and knows the ups and downs of the rent and property market in the emirate. Fujairah Observer spoke to him about the current and future prospects in the housing scene.
Fujairah Observer: How do you assess the current housing and rent scene in the emirate?
Helmi Al Minshawi: There is no doubt the last year, or so, has come as a great relief for many residents with more housing units becoming available and rents dropping considerably, in some cases. However, many people think it should drop further still and they look at other emirates and think there is much more value for money there. People are defiantly holding-out for better value and driving a harder bargain now that supply is meeting demand.
FO: Shouldn’t that equation automatically drive down rents? Or is there more to it than that?
HM: Well, yes, and it is already as we can see, but many landlords are still resisting making a lot of concessions and are trying to hold a higher line in rent fees. Most of them have commitments to the banks from the pre-financial crisis period and say they are pressured to meet those commitments. As someone who deals directly with clients, I have a better sense of what they’re looking for and, on the other hand, I have to convince the landlords that the market is moving fast. It is something I have to balance but in the end market forces will have the final say.
FO: How about other real estate business in the emirate, is there much buying and selling going on?
HM: Not really, it has almost come to a full stop. There is very little in the way of buying or selling; no land properties coming to the market. Until two years ago, land and house prices here were sky-high and people were still showing interest. Now, the value of these properties has dramatically dropped considerably so hardly anyone is selling. We use to have buyers from Abu Dhabi, Dubai, and other emirates and even from other Gulf States.
FO: So what impact is all this having on your business? How are you surviving?
HM: All real estate companies are suffering because business is not like it was before. I know at least two prominent offices that closed down in the last year and I’m sure many others face the same threat. We’re fortunate that we have other income avenues, such as from property management, which does not yield much compared to other property deals but bring a welcome, steady cash flow to the office. Other offices were too reliant on commissions from buying and selling and now that’s stopped they struggle to stay afloat.
FO: So what is the outlook on the short to long term for the housing and property markets?
HM: For rents, I think more and more housing units will become available and fees will continue to fall. Tenants in Fujairah are in a stronger position now then they have been for years and they will have more power to haggle over rent fees. Long term, is unclear and will depend on the general economic situation and whether more people and companies will move to the emirate of Fujairah, but I’m optimistic that more housing units will come into the market as the electricity shortage is being solved and hopefully that will keep things well balanced.
For our business, I think the companies with more credibility and flexibility will still have work. Although more clients prefer to approach landlords directly to cut out the middle men, most landlords still prefer to hand us the responsibilities of renting and managing the housing units and that gives us an advantage.
Fuad Mohammed Ali
