The industry executives said it will help the sector to quickly absorb the oversupply in the market
UAE - Property developers in the UAE have urged the government to reduce the price tag for 10-year residence visas to make the economy more competitive and attract global talent and foreign direct investment.
While speaking to Khaleej Times, the industry executives said it will also help the sector to quickly absorb the oversupply in the market.
They suggested a Dh2 million to Dh4 million investment limit to buy a property in the UAE for a 10-year visa and said it would be better for investors, developers, and other industry stakeholders.
The proposed investment limit will help the economy to compete with those countries who even offer citizenship on purchasing properties, they said. The industry stakeholders argued that this will make the UAE more attractive as some countries offer citizenship in return for investment as low as $100,000.
"I'm very bullish about 10-year visa. One of the biggest reasons that developers in Dubai are doing well is due to introduction of 5-10 year visas. I suggest that the right number for 10-year visa is Dh2 million. It will boost local property market," said Imran Farooq, CEO of Samana Developers.
The UAE's long-term property visa also faces competition from citizenship programmes through investments introduced by other countries.
Farooq pointed out that Greece offers citizenship on purchasing property for ?250,000 (Dh993,000), giving access to investors to all Schengen countries of Europe.
Among other countries, Caribbean nations such as Dominica, Grenada, St. Kitts, St. Lucia, Antigua and Barbuda and Turkey offer citizenship for purchasing property between $100,000 to $250,000.
"When UAE offers 10-year residence visa on purchasing property to an investor, that person is going to use the UAE airline every six months to fly in. He is also going to stay in the hotel if he rented out the apartment. He will dine out, rent a car, go to cinema and amusement parks. So there is a serious positive impact of that," Farooq said.
"I strongly believe that there should be only one category of 10-year visa with Dh2 million or even Dh1 million. If 30,000 people take this long-term visas every year, there will be 150,000 people after five years who will must take two trips a year. That will add positively to the economy," he said.
The UAE's real estate sector has been experiencing oversupply for the past six years, resulting in decline in prices and rentals. In 2019, 35,000 residential units were delivered in Dubai alone while in 2020, around 63,000 units are expected to be handed over with materialisation rate of 50 per cent, keeping the property sector under pressure.
Dubai has also established a high-level real estate committee to bring balance between supply and demand.
Farhad Azizi, CEO of Azizi Developments, recommended that the lower the required investment in real estate for the long-term visa, the better for investors, developers, and other industry stakeholders.
"Of course, if the investment required for a 10-year visa were as low as Dh2 million to Dh4 million or even lower, we are confident that this would have an even greater impact. The fewer barriers and complications to getting a residency visa, the better for all involved. Visas should be granted based on merit and education rather than investment size - those who are valuable to Dubai, and who wish to reside here, should be granted visas," he suggested.
Atif Rahman, director and partner of Danube Properties, also sees 10-year property visa with investment of Dh10 million as a great initiative but the value should be reconsidered.
"The value of property investment equates to $2.7 million (Dh10m), which according to me is high and caters to a narrow bandwidth of people. A more attractive proposition I believe will be anything between $500,000 to $1 million (Dh1.83 million to Dh3.67 million). This will attract a wider range of people contributing not just to the real estate sector but overall economy of the UAE. The real estate sector will experience direct impact from such FDI, however it will also boost the retail, travel and banking industry through the growth in population it will lead to," Rahman added.