Sentiments have been high in Dubai’s real estate industry soon after the launch of the Gold Card or permanent residency system for investors and exceptional professionals in various areas, including medicine, engineering, science and arts.
“Fantastic News,” said Robert Booth, managing director of Ellington Properties. “It’s going to be very beneficial for the real estate industry and will encourage a lot of people to have a long-term view about this place. I think it is a great time to buy property now. The market has fallen in the last four years and it offers great value to be able to buy at the bottom of the cycle. So those with a medium to long-term view can start investing.”
Early reports have said that the first batch of beneficiaries of the permanent residency system will include 6,800 investors whose total investments exceed Dh100 billion, according to a tweet by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, on Tuesday.
Better quality FDI
The Permanent Residency Programme that the UAE has introduced is central to drive long-term competitiveness of the real estate industry that will attract better-quality, long-term foreign direct investment (FDI) to the country, feels Mahmoud AlBurai, vice-president of the International Real Estate Federation of Arab Countries. “It will instill confidence and will unlock the potential of tenants turning into real estate owners. Such long-term solutions were demanded by investors and will be a turning point for the market ahead of Expo 2020.”
Al Burai also notes a recent shift in the market towards maturity and stability is also creating opportunities. “Shaikh Mohammad recently announced $3.4 billion [Dh12.48 billion] in projects confirming Dubai as a major player in China’s belt and road global project,” said Al Burai. “Such logistics projects will reinforce Dubai’s position as a capital of logistics in the region and will open up new opportunities in related industries. We are also seeing strong competition among developers to provide higher-quality real estate products and better communities to their investors.
“There are also talks about REITs opening up soon in Dubai. Such institutional investors will provide opportunities for small investors to access the real estate market, while at same time it will make the market more stable. It will also provide exit opportunities for developers and investors, while making the market more transparent.”
Creating new jobs
According to Atif Rahman, director and partner of Danube Properties, the foreign, direct investments will bring more stability and consistency in the UAE’s property market and undoubtedly will have a vastly positive effect on the GDP growth of the country. “The Gold Card will attract a lot more attention from homebuyers and investors around the world to invest in UAE due to the stability. The initiative will further enhance the demographic landscape of the country and will have a profound impact on the UAE’s economy. It will also help in creating new jobs across all the major industries,” he explained.
Talking about the employment situation, Al Burai said, “People worry about their jobs in Dubai and are reluctant to commit long term. There is also the need to create more jobs in the economy and attract more businesses and people. Hopefully this programme will help in doing that.”
While the introduction of the new scheme provides a clear and easy platform for residents to expand their contributions to the economy, Elaine Jones, executive chairman of Asteco, expects more announcements related to the residency programme. “It is expected to benefit all sectors of the economy, including real estate, and provides further indication for the government’s commitment to ensuring the global competitiveness of Dubai and the UAE, and increasing investment and retention of talent,” said Jones. “Look forward to seeing it expanded to include more sectors and specialisms in the coming months.”
PNC Menon, Founder and Chairman, Sobha Realty explained that apart from other things, this move will help the stability of the UAE by encouraging more distinguished professionals to stay in the country and contribute to the growth march. “Personally, this step will encourage me to invest more in the UAE. This is a great initiative for investors who have been here long-term and will certainly attract top talent into the country,” he said.
It’s definitely a great start, said Booth. “I am sure a lot more people will be able to benefit from this in the long run.”