Dubai slashes property value for investor visas

NEW 3-YEAR VALIDITY EXPECTED TO DRAW FOREIGN BUYERS

Dubai will issue threeyear investor visas to property buyers who invest Dh750,000, according to top industry sources. The earlier limit was Dh1 million, which got investors a visa valid for two years.

“Investor visas tied to property purchases was what set off the Dubai freehold boom of 2003-08,” said a developer source. “Now, after five years of a relatively soft market, Dubai is again drawing attention to the investor visas for a new base of investors from overseas.

The move comes as Dubai’s property market shows more signs of recovery, starting with the luxury end. With this decision bringing down the investment required to qualify for a visa, Dubai expects to see more buyer interest develop at the entry level.

How it works

The bare minimum requirement for the investor visa is a Dh750,000 property asset. “In case the property is on mortgage — or at least Dh750,000 is owed to a bank — there must be an no-objection certificate in Arabic along with a mortgage bank statement to proceed with the visa,” according to Sameer Lakhani, managing director of Global Capital Partners.

“Reducing the threshold investment amount is yet another step by the government to broaden the base in real estate as well as raise the population count. This will serve to increase demand for property, especially in the affordable segment, and attract talent from all over,” he said.

For Dubai’s developers, this will be another major boost to clearing their inventory — and an incentive to launch new projects.

Resident end-users open to buying mid-market homes

“The top-end of the property market is selling on its own, and there is a lot of interest from resident end-users for mid-market homes. If Dubai can bring in investors at the entry level, it adds more depth,” the source said.

Market sources expect Dubai’s job market to see more youngsters in the next 3-5 years. That means a need for more studio and one-bedroom apartments, whether in communities or high-rises. This was also the one residential sub-category that was under pressure because current residents were upgrading to bigger living spaces, whether rented or owned.

Along with developers’ efforts to offer co-working and co-living environments, the new move will tap a fresh demographic for Dubai to host.

“Talent, historically, has moved to areas associated with higher levels of creativity conjoined with ease of asset ownership and residency. This equation is what the government is perfecting,” Lakhani said.