By John Irish
Expats could be less likely to buy homes if not granted residency automatically - ING.
Foreigners could be less likely to buy properties in Dubai after the emirate's real estate regulator said expatriate homeowners are not automatically entitled to long-term residency rights, ING said on Tuesday.
"There is no direct link" between owning a property in Dubai and obtaining a residency visa, Chief Executive of the emirate's Real Estate Regulatory Authority (RERA), Marwan bin Ghalita, was quoted by daily Gulf News as saying on Tuesday.
The comments were contrary to prior statements from local developers such as Emaar Properties, the Arab world's largest real estate firm by market value, ING said, noting the remarks could trigger "negative sentiment" and impact Emaar's stock.
Dubai, the commercial hub of the Arab world, has witnessed a property boom since the government allowed foreigners to invest in properties in 2002. The emirate passed a real estate law in 2006 allowing foreign freehold ownership in some areas.
Expatriates from neighbouring countries facing political instability, such as Pakistan, Lebanon and Iran, have been lured to Dubai largely on the assumption that owning a property would entitle them to long-term visas, ING said.
"People from politically/economically unstable countries in the region bought residences in Dubai assuming they would automatically be granted residency, a huge asset to have if the situation in their home countries turned sour," ING said.
"Dubai was the only market in the region to offer such a link."
But bin Ghalita's comments on Tuesday raised questions about whether the promise of residency from developers, including state-owned Dubai Properties and Nakheel, has legal backing, ING said.
"Developers should not lure investors to the property sector with a promise of residence visa," bin Ghalita was quoted as saying.
The existence of "safety homes" in Dubai has been a key factor driving demand, and any decision by regulators to review the visa status of existing homeowners would create a "legal minefield" and could hit the emirate's image, ING said.
"Owners will feel they have been sold a worthless investment and what's more by developers that are all linked very closely to the state in Dubai," the bank said.
Shares of Emaar Properties slipped 0.45 percent on Tuesday while those of Union Properties fell 2.68 percent.
The regulator, meanwhile, has submitted a proposal to the government to grant foreigner homeowners visit visas, a rule that could also apply to existing homeowners if it is approved, bin Ghalita said.
Foreigners comprise more than 80 percent of the population in the United Arab Emirates, home to about 4.1 million people, the majority from the Indian subcontinent, Iran and other Arab countries. (Reuters)
This will be a big mistake, I own a property in the Marina and have my residency visa as well title deeds from the land department, my visa is from Emaar. If the situation changes that I cannot come and go as I please, use the banking system etc etc then I will sell up. It makes Dubai unattractive to live in. I am financially independent and do not require a work visa, so this is my only way to remain in the county legally, some kind of short term property ownership visa would not work . Also I think that it will put off a lot of Western buyers, its is not a positive view to present to the rest of the world. It now looks like the authorities are going back on there word. Many Europeans will lose confidence overnight at this news, we all remember the Spanish problems.
we are investing our money in the dubai in properties to make the good profit, but like this kind of problem will come so it will be v v difficlt to do busineess in dubai. also now dubai decome all ready is v exp than last 2 to 3 years. dont understand whats going on ?
Well it seems rather unprofessional to actually issue 20,000 families with residence visas against their purchase of properties in Dubai and then change the rules. As a long term resident of the UAE I am used to hearing so many plans and suggestions which don't actually happen, scaremongering I guess. The person who issued this suggestion which needs approval from the Federal Govt is not from the Immigration Dept any way. Investors have bought property in Abu Dhabi and Ajman what do these Emirates feel about the Real Estate and Regulatory Authority heads statements???? After all the final decisions are made by others not this man. As an investor in Dubai I find it rather a joke and totally unprofessional for this about turn on the visa policy. If it is put in place well Dubai won't be such a good place to invest in. People will be worried how the rules keep changing like the wind direction.!!!!!!
If it really is going to be the way mentioned then all the investors have been taken for a ride. Dubai used our money to develop its barren desert. If the investors try and leave, the inevitable property slump is on the cards. There are many who plan to actually make Dubai their new home and not use their properties as rental assets. Future buyers beware.. in this part of the world nothing is sure even if it's written on paper!
Residence Visa u turn proves Dubai is not the place for the long term. My advice to investors is to keep your investments liquid. This place will never let expats settle - its adhoc policies will always keep Dubai on its toes.
By all means we understand that many have bought properties in the UAE just for the visa these properties come with. Many of these individuals do trade and work here under these visas or bring families in from parts of the world that are deemed unsafe to live in and this practice should be stopped. Dubai should not be seen as a safe haven for all and sundry to descend on. As a long term resident of Dubai I have seen a change in the past four years and not for the better I may add. However, many of us that have been here for 15 years or more have brought our children up here and many of these children have either never left or have returned and for many of us we have bought properties to retire here. How are we going to do that if we can not obtain visas to reside here through our property purchases. If these rules are applied then we will be selling up and leaving as will many other expats. They really need to think this through very carefully before making such a huge decision. The only reason we bought property here is to retire in a country that is now our families' home.
There is no stability when somebody can suddenly in the morning issue a new rule. How can we develop trust if this is the situation? Same thing is happening now with Salik toll gates. Its original intent was to reduce congestion, but now its focus has moved to revenue generation. After investing huge amounts to spend the rest of our life in a good way, it is in fact the new rules that come up daily that make this difficult. I think all those who have invested and those who plan to invest should look for another opportunity.
Unprofessional is the kindest possible word to use in the context of outright fence-sitting by the powers-that-matter in the issue of denial of residence visa to property buyers in Dubai. Those that think other Emirates will not follow suit are so wrong and naive that it simply hurts to know that such gullible people still exist. This is the beginning of the end of the stunning rise in property prices and rents in Dubai. No State is immune from laws of reason, logic, and justice. Pity those caught in the financial cross-fire, though. That some unknown official should wake-up now at this hour and pontificate adds salt to the wound...Had Emiratis purchased real estate elsewhere and been treated similarly, they would have learnt the terrible lesson the other nationalities are learning now. Dubai is on trial by fire. This matter could well end up at the Hague or the UN.
Owning a property in the UK, USA or any part of Europe does not entitle a person to automatic residency, why do we expect Dubai to be an exception?
People are complaining that migrants from unsafe countries are buying houses and expecting visas...what exactly is the problem? They have the money to buy a house, are contributing to the economy, how is it anyone's business why they moved here? The fact is, who wants to take such a risky investment? As everyone's said, laws here seem to have no basis or grounding...In the UK it is a HUGE process to change a law involving hudreds of people, here it seems that a few guys have a coffee and decide to cancel everyone's visa. Absolutely ridiculous. The Emirates seem to be forgetting how much they depend on foreign workers (in all social brackets) taking interest in this place...Stop taking us for a ride, we helped make this country what it is!