By Alex Delmar-Morgan
Real estate officials say clear long-term plan needed to help drive demand in downturn.
Property industry experts on Tuesday said the UAE’s visa plan for expatriate homeowners was key to kick-starting the real estate market.
At the start of last month, the UAE government issued a decree granting foreigners the right to a six-month renewable residency visa if they owned properties worth at least AED1m ($272,300m).
At the time analysts said the move was unlikely to stimulate the market and called for greater clarity on visa and ownership rights.
Speaking at a Cityscape Connect breakfast event on Tuesday attended by members of the property industry, experts said the visa plan was crucial for driving demand in the market.
“The visa issue surrounds so many other things - you can’t live here, you can’t get a driving licence, you can’t open a bank account [unless you have a visa],” said Elaine Jones, CEO of Dubai-based property consultant Asteco.
“If the visa regulation is not palatable, if there are difficulties, there have to be other regulations in place to allow people to live here. There is no point selling a property to somebody who can’t live in it and use it,” she added.
Others said the six month visa plan was too short.
“Six months is quite a short period of time for property ownership, particularly in the current market. I would have liked to have seen a longer period to give people more stability and confidence,” said Steven Henderson, partner at law firm Clifford Chance.
He urged a more collective approach to real estate legislation across the UAE, stressing that the emirates currently dealt with foreign ownership laws differently.
Many of the seven emirates in the UAE have allowed foreign investment in property in recent years.
In 2002 Dubai introduced freehold laws which sparked the emirate’s now collapsed six year real estate boom.
Elaine Jones has always been a voice of reason in property in Dubai, and her comments on visas are measured and considered. Is anyone in government listening, or are they hiding under their desks? When freehold was first announced the question of visas was brushed aside, so let's hope the same failures are not repeated by the same officials. Emaar has the most to gain from pushing this, but they are remarkably silent when they were the most vocal with their promises six years back.
After all this farcical real estate fiasco, why would anyone ever squander his hard earned money buying a property of shoddy quality in a city whose laws are in perpetual change???
I was supposed to start June 1st ,I have called several times the immigration and they have no clue what am I talking about. We all are expecting some changes ,but nothing come up yet. How would they expect us to travel if we can not have a car or a bank account!!!
It baffles the mind that when a government has an absolute easy solution to alleviate a major problem, they are refusing to do it. No where else in the world a gocernment has this luxury. If the government of Dubai reinstated the 3 year visa for all property owners without any price limitation I guarantee you the market will change overnight. I am involved with buyers in Iran and I know for a fact that there are over 50,000 potential buyers in that country that would buy property in Dubai overnight if they knew they could get their 3 year visas right away. I also know a lot of people in the real estate industry and they are saying the same things for people from other parts of the world. This city is very popular with retired couples, but these prospective buyers need stability and long term security. The government has to realize that by instituting this law they do not lose or risk anything and there are no expenses to the government. This will not only help the real estate industry but the whole economy. These new residents would be spending money on all their necessities from the minute they arrive in this country, they would have to buy cars, furniture, food, pay for tuition, utilities, etc. The impact would be enormous and Dubai can come out of this mess in no time. I beg Sheikh Mohammad to rethink this strategy and do something immediately. Tomorrow is too late.
Earlier people were buying properties even without visa in a hope that Govt would surely do for needful. They saw the property boom and thought it would last for 10-15 years to come. They were in a situation that even if the rent could be accommodated in form of installment , it was a gain. But repeated changing laws, attitude towards some nationalities and other measures, people have lost thier confidence in investing here any more unless govt. show some dare move for the investor. Otherwise, it is clear now that poor investors are feeling like standing nowhere following the policies and would be in deep truoble following the loosing job and no job spectrum scenario. And so will be the local people who had spend million and billions to extract high rents / high profit in sales whatso ever. So when general people would loose in million, they would loose in billions.Even penalising the defaulter would not fetch any money to any body. The only way left is to boost the investor and expat confidence. Listen the voice of millions and grant 5 years visa, right to work ,free medical and school and see the difference. Banks are ready to provide loans but where are the borrowers!!!!
Malaysia is an excellent example of how to do things; buy a property there as an expat and you are entitled to a 10 year visa no questions asked. Unless the UAE introduces similar regulations one can forget any recovery of the property market.
I think this really unfair that suddenly the new rules comes and we are helpless, because the based on the 99 year lease we have purchesed the property and the rules is changing then goverment has to return peoples money who are not intersted to follow this rule. my self having a one property in ajman and i recomonded to my relatives they also purchesed on flat in ajman. also i have paid my life time saving to purchesed this flat, how the goverment can change the rules witout considering the comman peoples voice.
I think as a investor for a property tht is going to be on freehold for 99 years then the same visa rules should apply as a normal resident in UAE. As a investor it doen't matter where I am or where I work as long as the property is in one's name he should have eassy excess in and out of UAE just like any other resident and all the other previlages of any other resident of UAE. Finally like Dr. Basmadji has mentioned that he has tried to contact immigration to find out about this and there is no one who can tell him anything. Issue like this should be taken action on immediately by the authorities. Once put in the press it should automaticallty become law. The government need to be more pro-active if they really want to see the property market in UAE to grow from where it has fallen.
If you cast your minds back to the beginning of the freehold era, c. 2002-04, the original rationale for genuine end users to buy was that they were intending to remain in Dubai for several more years and they expected their financing costs to be less expensive than renting in the long run. Likewise, rational investors calculated that they could make a decent rental return from buy-to-let. No-one knew for sure how the property market would go, and many people worked on the basis that any capital appreciation would be a nice bonus when the time came to sell. For life to return to the property market, firstly people have to be convinced that the market has bottomed out, secondly that there is sensible business case for buying instead of renting, or becoming a buy-to-let landlord (the two go hand in hand as a owner-occupier needs to feel comfortable that the property can be rented out if they leave the country, instead of having to sell in a panic). For this to happen, the crazy mortgage interest rates that are currently being charged by banks must come down, and the only way for this to happen is for the local banks (encouraged by the government) to take the lead and offer attractive deals to homebuyers - the foreign banks have no incentive to drop their rates unless they start losing customers to the competition.
As a potential buyer myself, its not just the visa issue that stops me buying here: A: The price of a house here is a joke: B: then there's the ad ons after you buy: C: why can't i have a permanent visa, as long as i don't cause trouble or anything? 1 million dirhams buys you nothing here, it gets me a three bedroom house with gardens in the Uk. Its time this country realised that if they want to compete with the rest of the world, they need to give the people here a reason to stay, not just for money, that can be got any were.... sustainable growth is the key, and that won't be done with these rules....