Million-dirham units spurt on new property visas

The UAE announcement of an extension of real estate investor visas from six months to three years has suddenly increased the number of properties worth Dh1 million, according to a new report.

According to current regulation, only investors with properties worth Dh1 million or more will be eligible for the visa. However, there is a lack of clarity on the regulatory structure of the visa.

Kuwait Financial Centre (Markaz) says this has not stopped owners and brokers with properties in the Dh800,000-900,000 range, overnight, pushing their properties into the Dh1 million bracket.

The idea, quite clearly, is to attract buyers with the three-year visa now thrown in as well.

 “Investors with properties marginally lower than Dh1 million and are looking to sell would be able to benefit by loading up the price to Dh1 million so that the properties qualify for the extension,” the report said.

By analysing data from the propertyfinders’ website, Markaz found 81 per cent of all property listing in Dubai were at, or above, Dh1 million, while the number goes up to 86 per cent for Abu Dhabi. 

It, however, observed a five per cent increase in number of properties above the Dh1 million threshold for Dubai in one day.

Markaz also believes the extended visa will facilitate developers of projects, still under construction, to persuade investors to continue to pay the installments and will improve the salability perception of the properties once they are complete.

“This regulatory move would have higher positive impact for business, economy and for the society in general with the added job security; while yielding direct and flow through benefits to the real estate sector as well,” it said.

It is most likely that for the issuance of visa, the property will be valued by the Dubai Land Department.

According to Parvees Gafur, Chief Executive Officer, PropSquare Real Estate, they haven’t seen any sudden price spurt for properties that were a tad lower than Dh1 million.

“The property visa extension is a great move, but we haven’t seen any price rise as of yet. People are no longer buying properties just for the sake of getting a visa. They are concerned about quality and location as well.”

Gafur added that property owners in established communities such as Springs and Meadows were ready to hold on to their units till year-end, expecting a possible price hike by year-end and clarity on the visa issue as well.

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