UAE longer term visas boost property market confidence

The UAE’s recently introduced retirement visa and 10-year visa have had a direct, positive effect on confidence in the Dubai real estate market.

As a result of the two new visas, Dubai’s property market is already seeing an increase in enquiries from first-time purchasers, even although many would-be home-owners are struggling to raise the high down payment necessary to get a mortgage. In addition, a prediction by the International Monetary Fund that the emirate’s economy will strengthen by almost three per cent next year and 3.7 per cent in 2020 is also reviving confidence in the real estate market.

Infrastructure developments and the further development of the financial business district are being taken as further indications of Dubai’s being a safe place for a property investment, especially amongst expat professionals who’ve lived, worked and advanced their careers in Dubai for a long period of time. It would seem the initial intention of saving and sending a proportion of earnings back to the home country is changing to a wish to invest in Dubai’s long-term future by securing a property.

The 10-year visa available to expat professionals in the medical, science, law and finance sectors as well as innovators in the tech sector is being credited with changing expat mindsets about Dubai as a permanent home. High-end investors are also showing interest in putting down new roots in the desert city by purchasing real estate for their own use rather than just for the investment potential. Long-term expats approaching retirement can now apply for a five-year visa in order to enjoy their free time in the city, and it’s hoped that extensions to the five-year term will be made available.

Requirement for the retirement visa are a home worth two million AED, one million AED in a savings account or a monthly retirement income of over 20,000AED. Many first-time buyers are confident property purchase is now a good move, as rental charges are high compared with mortgage payments. However, finding 25 per cent for a deposit on a home valued at AED five million is proving tricky for some, with more expensive homes requiring larger deposits. As a result, real estate agents are urging Dubai’s central bank to reduce the deposit amounts and relax the loan-to-value ratios, at least to first-time buyers, in order to prevent a fall in buyer sentiment.