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22/FEB/2009
Six-month federal residence visa aims to revive property sector
With increased investor confidence, it is hoped that buying and selling activity will also increase, and the property sector will float once more.
Dubai: The six-month freehold visa, set to be launched in March/April 2009, will encourage investors to buy property in Dubai, industry experts say.
The UAE federal government has now finalised plans for a long-awaited freehold visa for investors.
Local developers and brokers say the move will boost the slow-moving property market in Dubai which can only be a positive thing.
The introduction of a pan-emirates freehold visa law, rather than different systems in each emirate, is expected to increase transparency and confidence in the shaken real estate sector.
"The new federal law granting residency visas to owners of freehold property will be a positive step forward & Previously, granting a visa was not always guaranteed as it was subject to approval by the Department of Naturalisation and Residency, which may have discouraged people from buying," Firas Hussaini, business development manager at Great Properties, told Gulf News.
This law is further good news in a market that seems to be doing all it can to get the property sector back on track.
The federal law will allow all owners to obtain a renewable six month residency visa. However, some industry experts say that a six-month duration is too short a timeframe to ensure security and confidence make a market comeback.
Ahmad Shaikhani, managing director of Memon Investments, said while the law is a positive step to attract more investors, it is not necessarily a long-term decision.
"I believe this cannot be a permanent solution, it is a USP [unique selling point] that can potentially help players market their projects to foreigners. And [six months] is too short a time as such a period provides minimal security for buyers and investors," Shaikhani said.
Buyers had previously relied heavily on Dubai's three major master developers, Dubai Properties, Emaar and Nakheel to sponsor their residency visas. However, it later became clear that the master developers could not guarantee them the promised visas.
"The property market is one of the worst-affected industries in the global economic crisis. Prices have fallen up to 50 per cent, primarily due to no mortgages and bank loans. The UAE property market took an additional punch due to the withdrawal of the residence visa as an incentive when buying freehold property. Buyers not only stopped buying properties, they started cancelling property already bought," said Fahad Sattar Dero, chief executive of Sweet Homes.
Dero also said that this new announcement would help revive the market and put the brakes on people cancelling their property contracts.
With increased investor confidence, it is hoped that buying and selling activity will also increase, and the property sector will thrive once more.
"Damac Properties welcomes any initiatives and incentives to help boost the property market in the UAE at this time and believes that the visa provision could certainly be seen as a positive benefit for many people. As a plot developer only, whilst we will not be able to directly issue visas for our buildings, we are of course happy to work with all the master developers within whose developments we are constructing homes to make this process as smooth as possible for homebuyers and investors," Peter Riddoch, chief executive of Damac Properties, told Gulf News.
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