The recent news that some UAE home purchases will be able to obtain three-year property visas has divided real estate experts, as some believe it will have little effect on Dubai’s ailing real estate market while others think it could increase foreign sales.
In June the government decided to offer extended visas to those who owned property worth more than AED1 million, and these new visas will replace the old system of having to renew visas every six months. Some analysts think this move will increase the number of sales to foreign buyers, especially to those who come from more politically unstable countries, and who are prepared to pay a premium for property provided they can obtain a visa. This could lead to some buyers paying over the odds for a property just to qualify for residency.
However it is uncertain if the new rules will allow people from these countries to obtain visas, and if they cannot then most experts believe there will be little change in the property market in Dubai. In any case the benefits of this new scheme aren’t likely to become apparent until the fourth quarter, as the majority will hold back on purchases until further details are released.
A recent poll by Reuters revealed that some analysts believe property prices could fall by another 10% due to continuing oversupply, and the majority believes there is no chance of the property market recovering this year. The efficacy of these new visas hinges on whether or not buyers feel it is worth paying a premium, and analysts believe in such a value driven market this may be unlikely.
Questions are also being raised as to the likelihood of people who bought homes costing more than AED1 million during the property boom being able to qualify for these visas, due to the fact that property values have since plummeted. If eligibility for these visas is based on current market values then they would fail to qualify.
Visit the original news source by Claire Ferris-Lay at Arabian Business.com