The move from the UAE to grant permanent residency has been welcomed by the business community, but what impact will it have on the real estate market?
According to the latest report published by real estate portal Property Finder: the UAE’s move to grant permanent residency to wealthy investors and entrepreneurs is a good step forward and likely to boost the fortunes of its property market.
Around 6,800 people have been granted permanent residency and a ‘Gold Card’ in the first round of applications. These residents have collectively pledged investments worth an estimated AED100bn.
The UAE’s residency visa reforms drive Indians to buy residential properties in Dubai
There is a shift in demand from compact residences to those that have extra space as the work-from-home culture looks like it will last.
Dubai is seeing a rush of cash-rich Indians exploring buying properties in the city on the back of the UAE government’s recent offer for long-term residency visas for several categories of expats, according to real estate consultants and prominent Indian expats.
The uptick has primarily stemmed from Indians residing in their home country who want to evaluate options to be a resident of UAE by investing in real estate.
There has been a shift in demand from compact residences to those having that extra half room in the wake of the work-from-home culture. We have seen an increase in the number of enquiries from Indian customers in the recent weeks and months looking for buying residential properties in Dubai. The demand has mainly come from the affluent business class in India who are looking to make UAE their second home.
The UAE government has announced a slew of policy decisions since late last year which included moves to issue 10-year residency visas, remote working and longer-term stay options for certain categories of investors, professionals and some university students. These measures have helped in enhancing the general market sentiment in Dubai.
Historically, Dubai has been the most sought after overseas markets for property investments for wealthy Indians, followed by London. Indian nationals topped the list of overseas investors in the real estate sector in Dubai in 2019, according to the Dubai Land Department.
All factors are in favour of buyers in the UAE property market now. Given that Indians have always loved to live in this country due to its many attractions, there is reason to believe that Indian expatriates will continue to buy properties here, especially with the many new initiatives of the government encouraging long-term residency.
Despite a 25 to 30 percent jump in real estate prices in Dubai over the last 6 to 8 months since the [UAE] government announced the long-term visa and other incentives for people to live in the UAE longer, property values are still much lower currently compared to their historical highs. Hence, today even the younger expats feel that they have options and with the visa extension policies, suddenly they can also buy their homes and are doing so.
The home-work hybrid model has shown how effective it has been, with both employees and employers realising that this could be the future. As money is saved on non-use of cars and outdoor activities, and of course staying at home longer, has also inspired people to own their own place in Dubai now.
The new six-month multiple entry tourist visas will also encourage those Indians who make frequent business trips Dubai to now buy their own properties – if the law permits – and save on hotel costs.
The expectation of a faster economic recovery in the UAE due to the intensified vaccination drive is another factor which could influence wealthy Indians to invest in properties in Dubai.
On the latest trend of Indians looking for ‘more roomy’ residences in Dubai, post Covid-19, homebuyers across the world have been looking for flexible configurations within which work from home and learn from home can be seamlessly managed. The sweet spot in terms of pricing appears to be the AED 650,000-800,000 bracket for [Indian] buyers.
Indian investors largely prefer Dubai properties because of the significantly better return on investments they offer compared to properties in the other emirates.
“Even though Abu Dhabi and Sharjah properties are priced lower, the aspirational value of owning a Dubai property is much higher than that of owning a property in the other emirates.
A world class lifestyle, long terms visa options associated with property investment, quality and luxurious residential options and rental yields of 4 to 7 percent depending on short- and long-term accommodations are the reasons for Indian buyers to prefer Dubai for properties,