Sharjah is the Rising Haven for Expats Amid Dubai’s Soaring Rents

As more expatriates express concerns over being priced out of Dubai due to escalating rental costs, Sharjah, a city with a history spanning 7,000 years, is positioning itself as an attractive nearby alternative.

Located just north of Dubai, Sharjah has begun to attract investors thanks to a law passed less than two years ago that allows foreigners to purchase property in designated areas of the emirate. Developers have already initiated the construction of tens of thousands of homes, and buyers are not far behind.

Prathyusha Gurrapu, head of research and advisory at Cushman & Wakefield Core, noted that many people are moving to Sharjah due to Dubai’s increasingly expensive rental market, adding that the cost of living in Sharjah is generally lower.

This trend reflects the mounting housing demand that Dubai has struggled to meet. Over the past few years, bankers, lawyers, and other professionals have flocked to the city, drawn by its low-tax system and advantageous time zone. As a result, property values in Dubai have been rising for 16 consecutive quarters, with rents for single-family homes surging 86% since the onset of the pandemic, according to real estate consultancy JLL.

While Dubai is renowned for its opulent lifestyle, luxury hotels, and meticulously designed housing complexes, Sharjah has traditionally offered more affordable living options, albeit with older buildings lacking the amenities of its more glamorous neighbor. However, this is beginning to shift.

Arada Developments, a firm owned by members of Sharjah’s ruling family and Saudi Prince Alwaleed bin Talal’s son, is spearheading a $9.5 billion project called Aljada. Once completed, the development will feature 25,000 homes, restaurants, shops, sporting facilities, and one of the region’s largest skate parks. About a third of the project has already been built, with full completion expected by the end of the decade. Talks are also underway to grant companies licenses similar to those in Dubai’s free zones, which provide tax exemptions and other advantages.

Sharjah, ruled by the Al Qasimi dynasty since the 1600s, was historically one of the wealthiest emirates in the UAE, bolstered by its ports and a thriving pearl fishing industry. After oil was discovered in the 1970s, the city embarked on a wave of development, constructing the towering concrete buildings popular at the time. Today, leaders are working to preserve parts of the city through the “Heart of Sharjah” project, which aims to restore traditional markets, narrow alleys, and other historic structures.

Sarah Moser, a professor at McGill University, described the project as a fascinating effort to recapture a bygone era, noting that much of Sharjah’s past had been overshadowed by the modernization that followed oil discovery.

Sharjah’s economy, once dependent on trade, motor vehicle repair, and manufacturing, has recently seen an influx of foreign property buyers after the government relaxed ownership regulations. Indian nationals now account for 29% of home sales in Arada’s developments, compared to just 8.7% a few years ago. Additionally, buyers from Germany, Canada, and the UK, who previously had little presence in the market, now represent 10% of purchases.

This growing demand has driven up prices. When sales for the Aljada project first began, the price per square foot was around $177. That figure has since more than doubled to roughly $381,2, though Arada’s CEO, Ahmed Alkhoshaibi, noted that prices in Sharjah remain about 40% lower than comparable areas in Dubai.

Shane Breen, head of Savills’ Sharjah office, commented on the rising prices, attributing them in part to Dubai residents relocating to Sharjah. Despite this, he said, Sharjah remains significantly more affordable. For instance, a one-bedroom apartment that rents for $16.335 annually in Sharjah would not even cover a studio in many parts of Dubai.

In an effort to maintain affordability, Sharjah’s government has introduced a three-year rent freeze for new tenants, allowing landlords to raise rents only once every two years thereafter.

Other developers are also capitalizing on this opportunity. Abu Dhabi’s Eagle Hills is working on a $1.2 billion luxury housing project on Maryam Island, while SEE Holding is building over 1,200 homes in phases. Sharjah’s Alef Group is another developer with significant activity in the city.

Muhammad Qasim, branch manager for Betterhomes in Sharjah, said his company has seen a surge in demand from buyers who feel they can no longer afford Dubai’s property market. Sales have increased 60% this year compared to the same period in 2023, leading Qasim to consider doubling his team to meet the growing demand.

Another major project underway in Sharjah is Masaar, a $2.5 billion development that will feature 3,000 homes upon completion in 2026. The project will also include a 13-kilometer cycling and jogging track, a rare feature in a city known for being unfriendly to pedestrians. Alkhoshaibi pointed out that Sharjah is seeing significant demand for luxury homes, noting that much of this migration is coming from the older parts of the city.

At least one long-time Dubai resident, Tania Patel, was convinced to make the move to Sharjah after discovering a four-bedroom home for $0.74 million on social media, roughly half the price of a similar property in Dubai. Despite the longer commute, Patel believes the lower cost of living and family-friendly environment make it worth the transition.

Sharjah, however, still faces challenges. Public transportation options are limited, and the process of purchasing property is not as streamlined as it is in Dubai, though improvements are being made. The city, home to about 2 million people, is also more conservative than its neighbors, which appeals to many Emiratis and Arab expatriates but may deter others. Sharjah continues to prohibit alcohol sales and bans hookah lounges that are popular in Dubai.

Despite these hurdles, Patel mentioned that living in Sharjah was manageable for those who enjoy the Middle Eastern lifestyle, describing the emirate as socially conservative but not overly restrictive.

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