Chief executive Lewis Allsopp looks at who the visas will appeal to most and, crucially, the extent to which they will boost the emirate's property market.
The introduction of retirement visas and long-term visas by the UAE Cabinet could fundamentally change the real estate market in Dubai. Traditionally, foreign investment has fueled buying and selling activity in the emirate, but we can now expect the emergence of extended property chains, typical of mature markets, where long-term residents upgrade and downgrade their homes over time.
In early 2019, a new five-year renewable pensioner visa was made available to non-working residents over the age of 55, provided they either own property in the UAE worth AED 2 million, savings of at least AED 1 million active income of up to AED 20,000 per month.
Why Dubai is an attractive retirement destination
Previously, pensioners had to leave Dubai every 60 days to obtain a new tourist visa. By offering a retirement visa along with partner sponsorship, Dubai can now compete with popular retirement destinations such as Spain, Portugal and Cyprus.
It gives a new dynamic to the city. This initiative will create a wide range of new business opportunities to encourage people to settle in Dubai, with the potential to develop new products and services for middle-class retirees, such as luxury retirement villages, resorts and golf courses. And of course, the introduction of pensioner visas available for AED 650 is also expected to give a big boost to the real estate sector. Dubai can compete with major retirement destinations by offering year-round sunshine, city and beach attractions, a well-developed transport infrastructure and a central location for international travel. It also boasts of being one of the safest places to live in the world.
Visas for longer stays were also introduced this year. This allows foreigners to live in the UAE without the need for a local sponsor. Visas are issued for five or ten years and are automatically renewed. To qualify for a 10-year visa, available for AED 1,150, the applicant must have invested AED 10 million in the UAE or major in science, culture or art. Executive managers of the company earning more than AED 30,000 per month are also eligible.
The five-year non-subsidy visas are available to entrepreneurs and talented students, as well as those investing in UAE real estate worth at least AED 5 million. This visa, available for AED 650, aims to attract talent to the region and encourage high-achieving entrepreneurs and students to make the UAE their base, where they can enjoy quality facilities and a low-tax environment.
This is a smart move that will propel the country forward and put it on the global talent map. The hope is that this will help the UAE achieve more tech success, such as the recent acquisitions of Dubai-based brands Souq.com and Careem by US giants Amazon and Uber. The aim is to issue 6,800 visas for long-term stays before the end of the year.
Long-stay visas promote permanent residence in Dubai
The decision to offer a long-stay visa sends a strong message that the UAE is a place where you can find a permanent home. It is no longer just a temporary job to take advantage of the missing income tax. There was a lot of ambiguity under the previous visa rules. The longest visa duration available was three years and required a local sponsor. And if someone loses their job and can't find a new one within a few weeks, they have to leave the country. If you were a senior executive with dependent children, this was a major concern and disincentive to get out of the rental sector. Now they can settle down and invest in real estate, safe in the knowledge that they have a future here. The new visa rules will encourage those who meet the criteria to stay longer, while making it easier for them to sponsor spouses and children.
As a businessman, I am one of those who will benefit from the new visa rules. It allows me to look at my life here in the long term and gives me great motivation to invest in my business. I benefit from that, as does the economy. This makes me feel less like a temporary expat and more like a citizen.
Having lived in the UAE for over a decade, worked in the real estate industry and experienced all the ups and downs first hand, I expect the new visa rules combined with the 100 percent foreign ownership law to have a profound impact on purchases of real estate in dubai. They provide an extra layer of security for expats, allowing them to plan their lives further ahead – we're already seeing an effect in other areas with more extensive financing options now on offer for things like buying a car.
Possible increase in demand for detached houses
This is exactly what the UAE should do: make it easier for people to stay in the country for long periods, as it has the negative effect of turning renters into buyers. And that will result in greater stability on the real estate market, the economy and society. In particular, I expect an increase in demand for properties up to AED 5 million, as this is considered the family segment rather than the luxury market.
The new rules complement a wider campaign in Dubai to increase its appeal to families. This is reflected in the investment made here in entertainment and street life, in developments such as La Mer and City Walk. Even advertisements and billboards are now targeting families and people who make their homes in Dubai. The atmosphere is very different from 2006 when I arrived in the emirate, with real estate changing hands overnight and speculators lining their pockets without contributing anything meaningful to the economy.
There have been a lot of negative reports about the Dubai property market lately. It is true that prices have fallen by 40 percent in the past five years, but it is normal for prices to fluctuate in cycles. People are still buying and selling real estate, which means it's a healthy market. It's either a buyer's market or a seller's market, and right now the buyers have the upper hand in the negotiations.
Mortgage schemes and transfer costs on targets
In fact, the biggest pressure on prices is the "cooling measures" introduced at the end of 2013 to slow down the acceleration of the real estate market. The UAE central bank has issued new mortgage rules that limit the amount banks can lend to buyers and increase the equity investment required to buy property. For non-citizens, housing loans were limited to 75 percent of the property's value if the price was below AED 5 million, or 65 percent if it was above AED 5 million. For a second home or investment property, the loan-to-value ratio was limited to 60 percent. No more than 50 percent of the property's value can be borrowed for purchases outside the plan. In addition, immigrants can borrow a maximum of seven times their annual income.
This means expats looking to buy their first home in the UAE will need a 25 percent or 35 percent down payment. They must also be able to cover fees of around 7 percent – including a 4 percent transfer fee, 2 percent agency fee and other administrative expenses – and must have a certain salary level.
The stricter mortgage rules and transfer fees were introduced to prevent speculators from over-heating the property market, but they are also a huge obstacle for first-time buyers who are genuinely interested in buying a property in the UAE. And there are many who would like to switch from renting to owning their home. My company conducted a small survey of renters in Dubai asking if they would buy a house if they could get a 95% loan. About 77 out of 100 respondents said yes. This means that the appetite is there, but the financial ability is lacking.
The impact of the new visa rules on the real estate market is yet to be seen. But in all likelihood, industry experts expect demand for real estate to rise and prices to fall thanks to incentives that make it easier for wealthy foreigners to stay in the UAE for the long term.
Dubai World Trade Center - september 2019
FAQs
What is the future of real estate in Dubai? ›
Future Growth Potential
The Dubai real estate market is steadily increasing and is predicted to increase by 46% in 2023. According to the Realiste AI data reports, It is predicted that the cost of real estate in this city will rise by 29% in 2023.
Dubai's property market is expected to lead the global price charts in 2023 as it continues to attract high-net-worth individuals (HNWIs), but rising interest rates and sustained headwinds are likely to soften the demand.
How is the property market in Dubai? ›The emirates prime real-estate prices surged 70.3% over the 12 months through September, making it the biggest gainer on Knight Franks global index, which focuses on a city's most desirable and expensive homes. According to CBRE's research, in the year through February 2023, average Dubai rents increased by 27.7%.
What is the outlook for property market in Dubai? ›Prices are seen rising by about 5% this year, after climbing 11% in 2022, which itself was a slowdown from a 21% increase in 2021, Richard Waind, group managing director of Betterhomes, told Reuters. "(Higher) interest rates haven't removed the underlying demand.
Why is Dubai property market booming? ›Demand for Dubai property is booming as the government's handling of the pandemic and its liberal visa policies attract more foreign buyers.
Is it a good time to buy property in Dubai now? ›So, if you're a real estate enthusiast or aspiring investor, now is the perfect time to invest in Dubai real estate! There are plenty of opportunities to make a profit through Dubai real estate.
Is Dubai property market improving? ›With the official sales figures indicated a strong performance in 2022, the Dubai property market is expected to continue the same trend this year. I expect 2023 to be an even better year for the Dubai property market as it continues to attract the attention of HNWIs and foreign investors.
Will rents drop in 2023 Dubai? ›Real estate in Dubai saw a bumper year in 2022 with record-breaking transactions and soaring property prices – and the trend is expected to continue in 2023, according to a new report, spelling good news for landlords but more rental woes for tenants.
Will rents go down in 2023 in Dubai? ›Dubai's rental prices are expected to experience very fast growth in 2023. Due to the growing interest in the market from high-net-worth people and overseas purchasers, prices are predicted to increase by 13.5% in 2023.
Who buys most properties in Dubai? ›Dubai Land Department saw record-breaking sales numbers in 2022 with over 97,398 sales transactions. British nationals dominated the market as top buyers of 2022 followed by Indians, French and Russians, according to a report by Allsopp & Allsopp. The market for top property buyers in 2022: British – 21.2%
Where is the best place to buy property in Dubai? ›
- Palm Jumeirah. A hit among investors, Palm Jumeirah is one of the most reliable places to invest in Dubai. ...
- Downtown Dubai. ...
- Jumeirah Village Circle. ...
- Dubai Marina. ...
- International City. ...
- Business Bay:
According to the annual transaction report – 2020 issued by the Dubai Land Department (DLD), Dubai's real estate market recorded 51,414 transactions in 2020, representing a value of over Dh175 billion. Indians emerged as the biggest investors, followed by the Chinese, British, Pakistanis, and French.
Why invest in Dubai's real estate market in 2023? ›Strong Rental Market
Dubai's real estate market offers a lucrative rental segment, making it an ideal investment destination in 2023. The rising population and influx of expatriates create a strong demand for rental properties, including apartments, villas, and commercial spaces.
UAE is known for its investor-friendly practices. An investment in Dubai attracts no annual property tax, income tax, capital gains tax, rental revenue tax, or Value Added Tax (VAT). This allows an investor to dedicate a much larger financial portfolio to purchasing property and, in turn, get higher returns.
Can a US citizen buy property in Dubai? ›Yes, foreign nationals, which includes both expatriate residents and non-resident investors, can purchase property in Dubai on a freehold basis. This allows foreign nationals to buy, sell or lease their property.
How long can you own a house in Dubai? ›Expatriates can own residential units for a period of 50 years, renewable by the agreement of the parties for a similar period. Masataha contracts entitle the owner to enjoy the use, construction or alteration of the property within the specified period. Expatriates can own residential units for 99 years.
Is it safe to buy a house in Dubai? ›In fact, Indians have ranked amongst the top nationalities to invest in Dubai real estate for several years. As per Indian laws, purchasing a property in Dubai is legally okay. The Foreign Exchange Management Act (FEMA), enacted in 1999, is the governing law for such purchases by Indian citizens.
Is it risky to buy property in Dubai? ›It is usually recommended to be cautious when making a big financial choice like buying a property. Before investing, it truly pays to conduct your homework and speak with knowledgeable financial advisors and attorneys. Generally speaking, purchasing real estate in Dubai is fairly safe.
Why are houses in Dubai so cheap? ›Oversupply. Another factor contributing to lower Dubai house prices is the market's surplus of properties. During the global financial crisis of 2008, Dubai had a real estate bubble, which resulted in a construction frenzy. As a result, there are currently more houses on the market than buyers, causing values to fall.
What does 1 million buy you in Dubai? ›It is not a secret that houses in the Maximum City are expensive. So it should not come as a surprise that a $1 million or Rs 6.5 crore will only get you house that is 990 sq ft.
Is Dubai property in a bubble? ›
Dubai is one of the best value global markets for investors, according to the UBS Bubble Index 2022. The city's real estate market has the momentum and the favourable winds to outperform the rest of the world's markets for the next 18 months, by which time the West should be back to growth.
How much rent can a landlord increase every year in Dubai? ›between 11% and 20% below the average market rental rate, a maximum increase of 5% is permitted. between 21% and 30% below the average market rental rate, a maximum increase of 10% is permitted. between 31% and 40% below the average market rental rate, a maximum increase of 15% is permitted.
What will Dubai inflation be in 2023? ›Our Country Risk team expect the UAE's consumer price inflation to average 3.8% y-o-y in 2023, lower than the estimated 6.3% y-o-y average in 2022. While this is decelerating, the forecast has been revised upwards to reflecting the sustained increase in prices in the UAE.
Will Dubai rents fall after Expo? ›Moderate increases in real estate prices and rents are expected in Dubai after the completion of Expo 2020.
Which is the richest area to live in Dubai? ›PALM JUMEIRAH
You can find luxury villas and apartments dotted across the island. Living in Palm Jumeirah means experiencing the best of Dubai, from incredible entertainment avenues to gourmet restaurants. You can also find some of the best luxury resorts here, including Atlantis The Royal and Atlantis The Palm!
Mukesh Ambani, who has a net worth of $84 billion, bought the property from Kuwaiti tycoon Mohammed Alshaya.
Which nationality owns the most property in Dubai? ›- India.
- UK.
- Italy.
- Russia.
- France.
- Canada.
- UAE.
- Egypt.
If you said convenience, an apartment in Dubai is likely to suit you better. Because apartment towers in Dubai tend to be more centrally-located than villas, they are much closer to commercial hubs and leisure activities. But if you value privacy more than convenience, a villa is likely to work out better for you.
What is the rental income in Dubai? ›Buy-to-let Downtown Dubai
The average rental yield in Downtown is 5.43% for apartments, and the average sale price of one of these apartments is just over 2.1 million AED, or $572.000 USD. The area is extremely popular with tourists, making it a fantastic area to invest in short-term accommodation.
In a ranking 25 of the world's top luxury, or “prime,” real estate markets, Dubai topped the list, with prices expected to increase 13.5% in 2023, according to real estate consultancy Knight Frank. Miami ranked second, with prices expected to increase 5%.
Is Dubai property worth investing? ›
Yes, Dubai's lack of property taxes and increasing population make it a great place to invest. The visa program makes it an attractive investment opportunity, as do the strong rental yields and relatively low property prices.
Where does Dubai get their wealth? ›The UAE is the third-richest country in the world, below Luxembourg at number two and Qatar at number one, with a GDP per capita of $57,744. The bulk of its money comes from the production of goods and provision of services related to petroleum, petrochemicals, aluminium and cement.
Who is the biggest investor in Dubai? ›In 2016, Canada was the largest inward investor, accounting for 30%, followed by the UK (13%), France (11%), Spain (8%) and the US (7%). These five countries alone generated nearly 70% of Dubai's total inward investment in 2016.
Is there property tax in Dubai? ›Does the UAE have a real estate tax? No, the UAE does not impose taxes on property owners. However, when buying or selling a property, you pay a property transfer fee; usually 4%, split equally between the buyer and the seller.
What is the advantage of real estate in Dubai? ›Dubai offers superior property yields than popular cities such as London and New York, with a gross rental yield of between 6-10% and an average return of average 7.5%. The property prices in Dubai are also competitive versus other major international hubs like London, New York, Hong Kong, Paris, and Singapore.
Why Dubai is living in the future? ›Dubai is on the way to become the City of the Future
The emirate has undergone a major expansion in terms of its infrastructure and among the most noteworthy smart city developments happening in Dubai is the construction of the Dubai–Abu Dhabi Virgin Hyperloop, the electric sky pod network and driverless taxis.
RBI remittance rules: The liberated remittance scheme of the Reserve Bank of India allows an Indian investor to officially transfer $250,000 to Dubai every financial year. Under this scheme, a couple can transfer $500,000 each year which can be used as real estate investment in Dubai.
Is Dubai a good place to invest in real estate? ›Yes, Dubai's lack of property taxes and increasing population make it a great place to invest. The visa program makes it an attractive investment opportunity, as do the strong rental yields and relatively low property prices.
Will Dubai real estate ever recover? ›Dubai is one of the best value global markets for investors, according to the UBS Bubble Index 2022. The city's real estate market has the momentum and the favourable winds to outperform the rest of the world's markets for the next 18 months, by which time the West should be back to growth.
Is being a real estate agent in Dubai worth it? ›Being a real estate agent in Dubai can be a very lucrative job, however it can be a very stressful job if you aren't enjoying what you do. One of the biggest mistakes that new real estate agents make is that they don't take the time to really learn about the property market or invest into themselves.
What are the benefits of buying a property in Dubai? ›
- High rental yields. Dubai is known for its luxuries. ...
- Tax-Free Investment. UAE is considered a tax-free investment country. ...
- Safest Country in the world-Low crime rate. ...
- High standard of living. ...
- High-Class Infrastructure. ...
- Good Economy. ...
- Regulated market. ...
- Golden Visa relaxation.
NEW DELHI: Dubai's prime residential prices are set to witness the steepest growth globally in 2023, according to global property consultancy Knight Frank's 2023 Prime Prediction report.
Is Dubai in a property bubble? ›With rents soaring and properties selling fast, the expatriate hub of Dubai is in the throes of a housing boom bolstered by rich emigres that has buoyed investors and burdened tenants.
What happens to your property in Dubai after 99 years? ›This lease term is generally for 99 years but can be less in some instances. This form of property ownership in Dubai only grants the buyer rights to the unit, not the land it's built on. At the end of the lease period, the ownership of the purchased property unit reverts to the freeholder.
Can Americans sell real estate in Dubai? ›If are also looking to buy property in Dubai from the USA, then there are some things that you must know first. After the passing of the Freehold Law in 2002, foreigners are allowed to purchase, sell, or rent a property as they wish.
What is the average salary in Dubai for real estate? ›Real Estate Agent Salaries in Dubai, United Arab Emirates
The average salary for Real Estate Agent is AED 5,000 per month in the Dubai, United Arab Emirates. The average additional cash compensation for a Real Estate Agent in the Dubai, United Arab Emirates is AED 15,500, with a range from AED 37 - AED 3,60,000.
For budget-friendly villas, Jumeirah Village Circle would be worth looking into, as it has so far generated the most attractive ROI of 6.9% in 2022.