The growth in affordable housing in Dubai has hit rents in the Northern Emirates, according to a report by Asteco.

Average apartment rents in Sharjah, Ajman and RAK fell by 3%, 2% and 1% respectively during 2016, the real estate consultancy said.

There was an average 1% drop in the last quarter across Sharjah, Ajman and Fujairah, according to the Northern Emirates Real Estate Report Q4 2016.

“We could see further declines in 2017 if the supply of affordable property continues to stifle demand in the Northern Emirates. Sharjah and Ajman are expected to experience more downward pressure on rates in comparison to Ras Al Khaimah and Umm Al Quwain,” said John Stevens, Managing Director at Asteco.

Apartment rents in Sharjah fell 3% in 2016, on average, with a typical one-bedroom apartment renting for around AED31,000 per annum. Asteco said this was also influenced by Sharjah Municipality’s decision to increase rent attestation fees, which it said resulted in a reduced number of tenant relocations and upgrades within the emirate.

“However, to arrest the slide landlords in Sharjah have offered rent-free periods and more flexible payment plans (six to 12 cheques) in order to retain existing tenants and attract new ones. For example, the newly completed Sahara Tower offered rent-free periods in order to increase occupancy levels,” added Stevens.

Apartment rates in Ras Al Khaimah fell, on average, by a nominal 1% year-on-year, although there was a 2% increase in master-planned communities such as Al Hamra Village and Mina Al Arab, which outperformed mature apartment units due to enhanced product offerings and facilities, Asteco said.