The expected overhaul of the UAE visa residency system will “hugely benefit” the country's real estate market and bring a “significant influx in buyers”, brokers said.
The changes, set to come into effect by September, include parents being able to sponsor their male children until the age of 25, allowing them to remain in the UAE after school and university.
Skilled professionals on salaries of Dh30,000 ($8,100) a month or more will find it easier to gain a Golden Visa, while real estate investors can obtain Golden Residence when purchasing a property worth no less than Dh2 million. Investors can also obtain Golden Residence when buying one or more off-plan properties of no less than Dh2m from approved local property companies.
The UAE Government Media Office announced the changes, approved by Sheikh Mohammed bin Rashid, Prime Minister and Ruler of Dubai, on Monday.
The visa residency changes are set to provide further impetus to Dubai's property market, which along with the wider UAE economy, has bounced back strongly from the coronavirus-induced slowdown. The value of property deals in Dubai more than doubled last year and broke a 12-year record in terms of volumes, Property Finder said.
“Changes in residency requirements in Dubai have had a significant positive impact on the real estate market in the last two years,” Andrew Cummings, Partner – head of prime residential, Middle East at Knight Frank, told The National.
“[Monday's] announcement is a further step in opening up Dubai to foreign investors and will likely lead to a significant influx in buyers, bolstering an already active market.
“The changes to enable off-plan investors to also gain residency will have the biggest impact, and we are likely to see a increasing demand for off-plan properties, with buyers no longer being restricted to having to have a title deed of a ready property in hand.
“Whether or not this will lead to downward pressure on the resale market is more uncertain, with demand in this area predominantly being driven by end users rather than investors.”
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Previous rules stipulated that parents could sponsor male children up to the age of 18, making it difficult for families to stay together in the same place once their male children had completed their education. A parent can sponsor an unmarried daughter indefinitely.
The changes encourage buyers to take a longer-term approach with a view to setting down roots in the UAE and enjoying the lifestyle.
“We have been speaking quite exclusively to C-suite level clients from around the world who are considering Dubai as a long-term residence rather than just a business or investment destination,” said Mark Castley, chief operating officer at LuxuryProperty.com.
“Our conversations often revolve around the idea that these executives want to set up their families in Dubai and have a plan that involves staying in the city indefinitely – with a view to eventually retiring here and watching their kids grow up in an environment that is buzzing with energy while providing tremendous levels of personal safety.
“This is, I believe, an excellent way to show the country's commitment to growth and diversity in a post-Expo timeline.”
Golden Visas were first approved in late 2020, and in the first year 44,000 visas were issued in Dubai alone. It enables foreigners to live, work and study in the UAE without the need for a national sponsor and with 100 per cent ownership of their business on the UAE’s mainland. These visas will be issued for five or 10 years and will be renewed automatically.
The property sector in the UAE will benefit hugely from the Golden Visa for real estate investors, according to Lewis Allsopp, chief executive of Allsopp & Allsopp.
The new rules open up the visa to a much wider market and is a huge encouragement for residents in the UAE to purchase a home, he said.
“Dubai and the UAE is no longer a temporary place to stay but rather a country to call home, to make a life for a family and to thrive in a professional capacity,” Mr Allsopp said.
“We are seeing more and more first-time buyers entering the market as a result of the loan to value increase that was introduced in 2020 by the UAE Cabinet. I predict the new visa overhaul will ramp up first-time buyers even more.”
Average Dubai residential property prices rose 11.3 per cent in the first quarter of this year, CBRE said. Yet properties are considered “relatively affordable", with prices 25 per cent to 30 per cent below 2014 levels.
In Abu Dhabi, capital values of villas and apartments rose to their highest level in five years in the fourth quarter of 2021, according to property consultancy ValuStrat. Sales prices recorded an average annual growth of 14 per cent last year, driven by existing communities on Saadiyat Island and Yas Island.
Andrew Covill, director at Henry Wiltshire International in the capital, said: “We can only expect a wider positivity and confidence in the UAE as it retains existing talents and brings fresh faces in on the back of the visa residency changes”.
The Golden Visa is attracting a lot of new real estate investors and retirees that may only spend three months or less in the UAE, which now is possible with the flexibility in the duration or frequency of coming in and out of the country, he said.
Since they are to keep their assets under their names, they are, therefore, more likely to continue their ties with the country through these initiatives, Mr Covill said.
“The Abu Dhabi property market is moving up strongly with the volume of transactions and prices both increasing and new communities springing up,” he said. “We feel confident it will continue on this upward trajectory in a controlled manner.”