The recent move by the UAE to bestow permanent residency (PR) to entrepreneurs and wealthy investors is a massive step forward and will surely boost the local property market – so says top MENA real estate site Property Finder.
Approximately 6,800 people have been given a ‘Gold Card’ and PR in the first round of applications – these esteemed residents have together pledged investments worth an estimated Dh100 billion.
Right now, short-term visas tied to employment all too often stop expats from investing in property in the UAE – they often prefer instead to send cash and savings back to their home country. It is expected that a PR system will change this ‘one foot in one foot out’ mindset and people will start to make investment goals for the longer term, including owning a home in the UAE.
UAE expats account for about 80% of the country’s market. The PR programme would therefore be a game changer for the real estate sector. There would be an instant positive effect on market sentiment and should help absorb the supply about to come to the market.
Already, the country offers long-term visas valid for up to ten years without the need for a local sponsor to real estate investors, entrepreneurs, specialised talents and researchers. A minimum investment of Dh5 million is required to get a five-year visa, and double that amount for a ten year one.
There is also a five-year retirement visa for expats aged 55 or above, set against real estate investments worth at least Dh2 million.
In just the first week of taking in applications for long-term residency visas, around 6,000 applications from investors and entrepreneurs were received by a UAE federal agency.
Experts say that developers need to incentivise with clever schemes that bring some kind of value for money and permanence in order to attract investors in a tough market. Crucially, they must acknowledge the increase in freelancers and foster environments that back entrepreneurs.
A good example is Emaar Properties – it recently launched the Executive Residences in Dubai Hills Estate aimed at entrepreneurs and SMEs (who make up 80% of the Dubai economy).
On paying 20% of the apartment’s price, buyers get a free three-year renewable business license with the Dubai Multi Commodities Centre free zone, a 100% business ownership, as well as a free three-year renewable family residence visa.
This all means that buyers are encouraged to operate a home office, getting rid of the need to lease office premises. Until the apartment is complete, DMCC provides a flexi-desk as your work address in the interim.
The Dubai Land Department’s (DLD) transactional data shows demand has been strong for these Emaar apartments. April and May alone saw 11 off-plan transactions for 1-bedroom apartments in the project, with the average unit price around AED 1 million.
This is step one in making operational costs for small start-ups more affordable. Launching more could be a real catalyst for the country’s property market.