The UAE’s property market is expected to be a key beneficiary of a new 10-year visa system announced on Sunday, investors and developers said.
Trading of property stocks rose in trading on Monday, with Dubai’s Emaar Properties and Damac Properties up 2.9 per cent and 4.8 per cent respectively. Abu Dhabi’s Aldar ended the day flat after rising 1.4 per cent in early trading.
The chairman of Dubai developer Nakheel expressed support for the visa system in a brief statement.
“We welcome the changes to residency visa regulations, which will undoubtedly have a positive effect on the UAE economy – and in particular the real estate sector.”
Marie Salem, director of capital markets at FFA Dubai, also said the move would “surely boost the performance of the real estate sector and give comfort to the investors there and specially property owners”, according to Reuters.
Other stakeholders also suggested the move would have a positive impact.
“These momentous decisions will undoubtedly have a highly positive effect on the real estate sector since more international investors will be attracted by the new and more sustainable demand in the lease market,” said Muhammad BinGhatti, CEO and head of architecture at Binghatti Developers.
“These decisions will also lead to the absorption of the current supply in the market, especially that expatriate end-users will be encouraged to buy their own homes.”
Listing site Dubizzle’s general manager for property, Samer Abdin, indicated the extended visa system would give more confidence to investors and property owners in particular.
“This change will help boost the real estate sector and encourage more foreign investment in the market, resulting in a more vibrant property industry and less transient expat population who are now more likely to purchase their homes in the UAE,” he added.
The new visa would allow investors, innovators and talented specialists in the medical, scientific, research and technical fields to stay in the country for up to 10 years.
A separate student visa will allow those studying in the country to stay for five years or 10 years in exceptional cases. In addition, the government will review the current residency system to extend the visa period for dependent students after completing their university studies.
State-news agency WAM said UAE Vice President and Prime Minister and Dubai Ruler Sheikh Mohammed bin Rashid Al Maktoum directed the Ministry of Economy to implement the resolution and submit a detailed study in the third quarter.
The cabinet also repeated earlier comments by the minister of economy stating that a long-awaited investment law allowing 100 per cent foreign ownership of companies would be ready by year-end.
The new visa system could provide a welcome boost to the Dubai and Abu Dhabi property markets, which have been hit by falling rents and sales prices over the last two years.
Cavendish Maxwell said rents in Dubai declined 5 per cent in the first quarter and sales 2 per cent, with a similar slump expected in the second quarter due to smaller housing allowances paid to workers, new supply and a shrinking pool of tenants at the higher end of the market.
S&P indicated in a February report that Dubai property prices and rents were likely to continue their downward shift for the foreseeable future.
“We believe this correction will continue at least for this year and next, before prices stabilise in 2020 at the earliest,” the firm indicated.
Similarly, Asteco said apartment rents were down 3 per cent during the quarter and 11 per cent year-on-year in Abu Dhabi, while CBRE indicated sales prices down up to 5 per cent year-on-year.
Dubai developer Damac said in 2016 a change to the UAE’s entry policy allowing Chinese passport holders to get a visa on arrival would boost the market.