Business | Property
Six-month federal residence visa aims to revive property sector
The six-month freehold visa, set to be launched in the coming weeks, will encourage investors to buy property in Dubai, industry experts say.
- By Suzanne Fenton, Staff Reporter
- Published: 23:10 February 22, 2009
- Image Credit: Abdul Rahman/Gulf News
- 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 the coming weeks, 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.
Will this encourage you to invest in property? Should the period be extended? What else could the authorities do to build confidence among investors? Tell us below
Your comments
Yes it will encourage people to buy and the visa should be permenant, as I was told before I bought a flat.
Abdullah Al Aidi
Middlesbrough,UK
Posted: February 23, 2009, 12:43
If one buys a property, one should also be allowed to live there. A period of six months every year should be long enough but there should be no
time limit whatsoever.
Christa Biet Giacalone
Montegrotto Terme,Italy
Posted: February 23, 2009, 12:34
As an American who likes living in Dubai, I would buy property (as residence and as a retirement home) only if I am assured that I can live in it without worrying about residency visas. The residency should be for the duration of my ownership. Why would I put down huge amounts of money on property that I may not be allowed to live in? A change in residency laws is essential.
Susan C.
Dubai,UAE
Posted: February 23, 2009, 12:26
Six months is too short and is not an incentive to invest in the UAE property market. The cost and hassle to renew a visa every three years is bad enough but to have to renew every six months can not be seen as an incentive.
M. Nankivell
Dubai,UAE
Posted: February 23, 2009, 11:15
This maybe encourages some investors to buy, but duration should extend to at least 1 year. The authorities should honour the investors....
Majid
Dubai,UAE
Posted: February 23, 2009, 11:09
I agree that six months is too small a period, the authorities should issue at least a one year renuable visa.
Sudhir
Dubai,UAE
Posted: February 23, 2009, 11:03
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