Question: If the Strait of Hormuz keeps becoming that focal pressure point, do you expect construction costs here to rise enough to affect property prices, or is that overstated? RK, Sharjah
Answer: It is not overstated. It is one of the more practical risks in front of the market right now. When the Strait of Hormuz is disrupted, it is not just an oil story for traders on television. It affects shipping routes with cargoes of every imaginable item, insurance, delivery times, fuel, freight and confidence.
Supplier delivery times in the UAE reportedly lengthened in March after the strait’s closure and logistics-heavy parts of the economy were among the most affected. That alone tells you builders and developers are unlikely to escape the knock-on effects, which in turn will no doubt be passed down to the consumer.
We have also seen reports on how ordinary building materials are being rerouted and delayed across the region because the usual shipping paths are no longer straightforward. Once routes become longer and less predictable, the cost does not disappear. Someone absorbs it. Sometimes it is the supplier. Sometimes it is the contractor. Sometimes it ends up in the final price and sometimes it shows up through thinner margins and more cautious launch pricing.
So yes, over time, cost pressure can feed through into real estate. But it will not do so in a neat or immediate way.
In the short term, some developers may decide not to raise prices because demand is softer and buyers are cautious.
In the medium term, though, if higher transport and material costs stay with us, that can limit how much room there is for discounts or other benefits and may even support prices on completed stock. That is why this market is so complex right now. Demand is being tested at the same time supply costs are becoming harder to ignore.
Q: I hear people talk about the Golden Visa as though it’s a simple bonus that comes with buying property. Can you explain who actually qualifies through real estate and what the real benefits are? EP, Limassol
A: Too much miscommunication has been attached to the Golden Visa. Through the Dubai Land Department (DLD) route for real estate investors, the headline requirement is a property purchase value of Dh2 million ($544,550) or more. It can be one property or more, as long as they are in the applicant’s name and the value meets the threshold.
The property may also be mortgaged but in that case the applicant needs a bank letter showing the amount paid and confirming the bank does not object to the residence permit being issued. The applicant must also be in the UAE when applying. The DLD says this route leads to a 10-year renewable residence permit.
There is also a lower-priced real estate-linked residence route shown by the DLD for investors with property valued at Dh750,000, provided certain conditions are met. In the case of a mortgaged property, at least 50 per cent of the value or Dh750,000 must have been paid, with the right bank documentation. A husband and wife can also share a property if the combined value reaches the threshold, subject to the required marriage documentation. That is not the same as the 10-year Golden Visa route but it is relevant because people often confuse the two.
As for the benefits, the official UAE government position is that the Golden Visa is a long-term residence visa that allows foreign citizens to live, work or study in the UAE while enjoying benefits such as longer-term residency and family sponsorship.
The DLD investor page is more specific on the family side, saying the holder can sponsor a spouse, children and one set of parents and/or domestic help. So yes, it has real value. But I would still say the same thing I always say: it should be the outcome of a good property decision, not an excuse for a bad one. Buy something sound first. Let the visa be the advantage that comes with it.
The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to mario@evadxb.com
