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Longer visas needed to boost Dubai homes market
The length of visas offered to foreign buyers of Dubai property is too short and is hampering the recovery of the county’s beaten-down real estate market, experts have said.
The six-month visas currently issued to expatriate homeowners are deterring foreign investors, who will favour housing markets with more relaxed residency rules.
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“Shortness of residency is definitely keeping the buyers away,” said Nicholas Maclean, managing director of CB Richard Ellis Middle East.
“We do need to elongate the window that people have so they don’t need to go back and forth. The period we have at the moment is a barrier to entry.”
Property prices in Dubai have plunged 50 percent since their peak in 2008 in the wake of a global downturn, wiping an estimated $100bn off the value of the emirate’s developed property assets.
According to Colliers International, one in four homes now stand empty. The emirate will be oversupplied by 32,000 new homes by the end of the year, predicts Deutsche Bank.
At the height of the property boom, buyers were promised visas by developers - including state-backed Nakheel and Dubai Properties – a move that was later overruled by the UAE federal government.
Last June, the Department of Naturalisation and Residency said foreign buyers could avail of a six-month visa, dependent on factors such as the price of the property and the applicant’s monthly salary.
Critics of the plan say the residency period is too short to entice new buyers to the UAE market, and excludes a significant number of lower-income expats.
“The one thing that would give a real boost to the property market would be if the federal government would allow three-year visas. It would transform the market,” said Charles Neil, CEO of Landmark Properties, at a recent roundtable. “This is the one thing that is keeping investors away at the moment.”
“Dubai is trying to fill up a growing city. How can they fill up the city if they can’t give residency?” said Tomas Ghassemi, managing partner of The Property Store.
Aside from providing a shot in the arm to the housing market, an overhaul of the visa laws would allow Dubai to filter its long-term residents more selectively, said Maclean.
“By tweaking the visa regulations the government can control who buys here. And that might be a good thing, so they can keep people here who could be a long-term benefit to – rather than beneficiary of – the economy here. We should be encouraging people who want to come, bring their families, educate their children, spend into the retail markets and have a house,” he said.
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Comments 1-10 of 10
Posted by Lanuk on 6 April 2010 at 17:23 UAE time
I agree with you that sometimes we Indian are ourselves to blame as we are willing to work at significantly lower salaries. I'll give you my own example. I completed my Masters degree from a leading school in Singapore where a large proportion of the batch came from European countries. Most Europeans would scoff at salaries of SGD 60 K (AED 150K) for a person with 3-4 years work ex but for an Indian it meant a foot in the door. The competition for education, jobs and even for brides!! in our country is so stiff that at times we tend to settle for less than what we think we are worth with the view of improving our positions once we are in.
What I’m trying to say is that we (meaning Indians as well as Europeans) always tend to view things from our individual perspectives and both need to change. Europeans have to learn to accept the fact that their salaries should not be dictated by the fact that the cost of living is much higher in Europe.
This is the prevalent mindset when it comes to salaries in the GCC that some Indians including myself complain.
Posted by The Consultant, Dubai, UAE on 6 April 2010 at 16:00 UAE time
Not all that careful about choice of words, it would seem.
GDP on a Purchasing Power Parity basis is a nice (albeit crude) way of comparing relative standards of living between countries. However, you need to use nominal GDP if you want to discuss which economies are "larger" and consequently of importance on the world stage (so about 12th, as I said before).
As for "pre-qualified" that is back to my point about being realistic - it is absolutely not my experience that anyone, of any nationality, who is genuinely qualified to do a job that pays AED 20k will do it for AED 8k a month. The people who will do the job for the lower salary just THINK they are qualified!
Putting it another way, employers are not stupid (mostly) and will not pay AED 20k a month for a job if they know they can get someone that has the skills to do the job for AED 8k a month.
My experience is actually similar to Mounir's on this; I have helped several clients recruit staff at various levels of seniority over the years and every time you place an ad in the paper, you are flooded with applications from people who offer to work for far less than the advertised salary, but are actually hopelessly unsuitable for the postion. 9 times out of 10, my clients have given the job to the candidate who can demonstrate that he is worth the salary being offered, regardless of nationality.
Posted by DaNgErBoY, Dubai, UAE on 6 April 2010 at 14:44 UAE time
A lot of people here keep on repeating how they are fed-up, disgusted, annoyed etc about the 'asian tsunami' that has hit these shores.
Well a deeper question you all have to ask yourself is who keeps bringing all of these people into the country? Everyone who comes to the uae needs to have a sponsor and a job to go to here otherwise you cannot really hang around here for prolonged periods of time.
The real solution to all of this is to stop bringing people here for menial jobs eg petrol attendants, shopping bag packer and trolley pusher, the guy who give your ticket at shopping mall entrance gates (disgraceful), the armies of car washers at malls, office tea boys (get up from your desk and make your own cuppa!)
These are some amongst many jobs that are not required at all. I am sure there are many other jobs that are not required which will reduce the number of people here and shift the demographic balance. The people who are left will be a majority of professionals, at all levels, who will add value to the country's economy and should be granted residency for this.
Posted by Lanuk on 6 April 2010 at 14:26 UAE time
@ He Who Must Not be Named (seems everytime I direct comments at him, ArabianBusiness rejects them)
Its one thing to say the truth and another to keeping on quoting the same numbers until some one comes and points otherwise. Yesterday it was about ADIA vs. US budget and today its about the USD 35 bn cheque. Please let us know about the source of this information?
The information we mere mortals have is that the Central Bank injected USD 10 bn initially and then another USD 5 bn came through the Abu Dhabi banks. I'm still a bit confused whether the USD 3.6 bn payment to Nakheel bondholders was in addition to the previous injections or supplemental. Nevertheless even if we were to take the figure it adds up to c.USD 19 bn or about 45% less than the figure you claim.
As for your other claims:
Population has indeed gone down and anyone who travels regularly by cars or has had to renew his rental contract should have experienced this first hand.
Tourists mainly from other GCC countries, South Asia and Russia seem to account for large proportion of tourists at most malls.
A more relevant statistic if available would be same store sales numbers of the leading retailers. Having worked on assignments with leading clothing and jewellery retailers in the region, I can tell you that most of these companies are struggling to cover their operating expenses much less make any significant profits.
Posted by shailendra, Dubai, UAE on 6 April 2010 at 14:08 UAE time
Whether small or vocal does not matter, it is the point that is being made which should matter.
I was careful in my choice of words and hence used "poised", about to become, and this is on the basis of PPP ( purchasing power parity ). Earlier 2050 was thought of as the year but in the last few years world economy has changed all this and we may see this happen by 2020 or before.
Even if this does'nt happen and India is 4th or 5th or 8th largest economy, it does not take away from large point being made.
On salaries vis-a-vis job qualifications, the word "pre-qualify" was used with care, only to ensure that usual lament of lower salary being equated to below par job performance was not put forward.
It would be better if sufficient attention is paid to postings and then responses are formulated.
Posted by sujac, dubai, UAE on 6 April 2010 at 13:55 UAE time
Dear Indian fellowmen do not waste your time in debating with these shortsighted people who believe that they are the saviours for this world.
Indians have always made patient and steady growth. India is a large country and has a large population. It is the worlds largest multi party democracy. It has its problems, problem injected as a part of the 300 years of colonial rule which looted and plundered India. Which will be overcome one day. Yet India is one the few countries which has positively weathered the economic crisis and is confident of two digit growth rate unlike our western counter parts who are awaiting series of financial injections to survive the economic downturn.
Hence lets not get provoked by such shortsighted people.
Posted by James, Dubai on 6 April 2010 at 13:51 UAE time
mounir, at have some consistency. originally you say:
'Anyone who says that multiculturalism 'works' is full of it and should go to Europe or the US / Canada and see how the original inhabitants see things from their own perspective.'
This was in a post directly complaining about the volumes of asians et al there are in Dubai. This is otherwise known as 'multiculturalism' as you point out above.
Then you say:
'I never complained about multicultural Dubai. I complain about those who believe they are entitled to more rights just because they live here. Huge difference.'
Sounds like you're complaining about multiculturalism in Dubai to me my old fruit.
Posted by The Consultant, Dubai, UAE on 6 April 2010 at 13:10 UAE time
Shailendra has unwittingly very neatly highlighted the problem with many of the comments posted on this thread: a small but vocal group of Indians not being very realistic about themselves or India.
"With India poised to become the world's 3rd largest economy" err, no, depending on whose figures you use, India is about the 12th largest economy and GDP would need to quadruple to be on a par with China or Japan. You might get there one day, but it's not going to be any time soon.
Likewise the comment "bidding low represents competitive advantage". In a few cases, possibly. But in most cases it probably means the guy isn't up to the job and is just not being realistic about his skills and/or is just sending his CV anyway out of desperation.
In my work I have worked with many very well-paid Indians around the GCC, in many cases earning more than similarly-positioned Westerners. With very few exceptions, these guys are in those positions because they are highly talented and have excellent skills, and there is absolutely no reason why they should be paid any less than their Western counterparts, because of the value they bring to the organisation. The lesson is that if you genuinely have valuable skills that are in demand, you should hold out for the appropriate salary.
Below this level, you get people who are happy with their position, and their main objective is not get fired, as well as ambitious individuals who aspire to work their way to the top. Unfortunately, you also get a lot of complainers who somehow think that because they have this certificate or that qualification they "deserve" a senior position, generally tending to overlook the reasons why they are not there, e.g. having poor communication or management skills, or not being willing to stick their neck out and take responsibility. Rather than face up to reality, it is an easier option for these individuals to blame their position on some sort of "discrimination".
Posted by Hear my words! on 6 April 2010 at 12:36 UAE time
yeah, man, you are right, let the aggressive children play in their corner of the sand box, thats were they belong and will stay.
If somebody (and I mean that literally) is comparing himselt to outcasts like LePen or Haider, then we know enough.
Posted by DXBEXPAT on 6 April 2010 at 11:00 UAE time
Oh, go on, let your imaginative mind wander....I actually felt the same way about you and the ORIGINAL Mounir! But what's the point, I say.