Increased rental costs and a surge in residents staying in the UAE for longer means property sales in Dubai are rising, real estate agents have said.
Along with the lure of a UAE Golden Visa, which comes along with certain high-priced property sales and grants longer term residency, many expats are taking advantage of the country’s interest-free payment plans for off-plan properties with minimal upfront costs.
Manal Fraiwat, Asteco’s chief property management officer, said this increase in sales is influenced by the recent shift in the property market, which she said is “undergoing a transformation”.
More and more residents are choosing to become homeowners because they want long-term stability and to avoid increasing rental prices, Ms Fraiwat told The National.
Increase in foreign buyers
The property management consultancy company, Asteco, has seen a rise in property purchases from both overseas and resident expat buyers in Dubai in the past year.
Their 2023 Q4 real estate report found unprecedented growth across the country, with a projected positive trajectory this year.
The total property sales value in Dubai reached Dh411.7 billion ($112 billion) last year – a 55 per cent increase compared to 2022, according to Fam Properties.
Dubai Land Department statistics also show a huge rise in foreign property purchases in the first quarter of the year, compared to the same period four years ago.
Ms Fraiwat said there is a particular uptick in people buying luxury apartments and villas.
“This is being driven by high-net-worth individuals seeking a luxurious lifestyle as well as family-friendly communities,” she said, adding that off-plan properties are also offering attractive investment opportunities and the potential for capital appreciation.
Feeling at home in the UAE
Government initiatives such as long-term residency and the golden visa programme may also contribute to the increase, she said.
“This trend towards homeownership indicates a strengthening sense of belonging and commitment among the UAE residents.
Dubai is the place everyone wants to be. It’s widely said it’s the safest, most secure destination
Jamie Grimshaw, co-founder, Luxury Invest Group
“While investing in property remains a choice, a growing number of residents are aiming to settle down and forge a lasting future in the country. “
Jamie Grimshaw, co-founder of Luxury Invest Group, a boutique real-estate consultancy that specialises in luxury residential apartments and off-plan projects in both the UAE and UK, said he’s witnessed a similar buying trend among his clients, but also within his social circles.
“I’m one of those people,” said Mr Grimshaw, who moved from Britain to the UAE back in 2013.
“Compared to when I first came, I think people’s mindsets have changed. People used to come for one or two years, save some money, go back home, buy a house … I feel Dubai has changed so much, people want to settle down and live here for longer now.”
Mr Grimshaw bought his own property two years ago, at Park Island in Dubai Marina, paying Dh2.35 million.
“I planned to buy back home, but now I’ve bought here and I have no current plans to go back,” he said.
Rising rental costs
When Sophie Kaila and her family were being evicted from their five-bedroom villa in Arabian Ranches, they decided it was time to buy instead of rent their next home.
The house, which they had been renting for the same amount as they’d previously paid for a three-bedroom apartment in Dubai Marina, had doubled in price since they’d moved in during the pandemic and could now be rented for 450,000 per year.
“We decided if we’re going to downsize, we should just get on the property ladder,” the British-Cypriot mum-of-twins told The National.
“We have a long-term perspective living in Dubai, our business is here, we want the kids to go through school here, so it made sense for us to live in something that’s ours, that provides long-term financial security, knowing what the costs are and we won’t be served noticed and forced to move.”
Ms Kaila, who owns an art consultancy business here with her husband, moved to a three-bedroom villa in Emaar South, which she said made sense for them in terms of affordability and proximity to her children’s school.
It’s a story that has become common in Dubai, with evictions leading to more foreign residents than ever buying their homes, instead of renting, which has historically been the case.
It was the same for Bahraini resident Ahmed Ali and his wife Natalie, from Lebanon, who have been living in Dubai since 2015 and considering buying property for years.
When their Dubai Hills landlord gave them their notice last year, they finally took the plunge, buying a villa for Dh4.9 million in Arabian Ranches 2, where they plan to stay for at least the next five years.
“Prices weren’t coming down and we wanted security in a house where no one can kick us out,” he said.
Increased market confidence
Nikki Martin, co-founder of new female-led Palm Living Real Estate, said she’s noted a noticeable increase in European buyers lately, particularly from the UK.
“This might be due to rising interest rates back home, coupled with attractive tax benefits in the UAE,” she told The National.
“In today’s market, it seems more sensible to invest in the UAE rather than elsewhere, whether for investment or living purposes.
“With no apparent signs of a slowdown, backed by statistical data, buying property here seems more justifiable than their high-tax and high-interest-rate home countries,” she added.
Meanwhile, off-plan projects have become popular among many buyer demographics, Ms Martin said.
“These projects offer easy, interest-free payment plans, making it easier for expatriates to enter the property market in the UAE with minimal upfront costs.”
Advantages to buying property
While the buying process is not necessarily easier than before, and mortgage fees have actually risen over the years, it is an easier decision to make, added Mr Grimshaw.
“Dubai is the place everyone wants to be. It’s widely said it’s the safest, most secure destination. You get advantages now buying, such as your golden visa, and obviously it helps that the market is increasing.”
He advised anyone who is looking to buy to properly research the area they want to live in first, then get in touch with a mortgage broker.
“Work out how much you can actually afford and see what areas are open to you,” he said.
“Also stick to one agent. Find out who the specialist in the area is who you trust and just stick with them. They’ll be able to find you the property you want and it’ll eliminate so much stress from your life.”
Luxury property launches in Dubai – in pictures
Updated: March 30, 2024, 6:03 AM
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Media Contacts
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Johnny Kollin
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+971 4 313 2094
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claudia.cdesomma@risksmart.com
The UAE has cancelled the Dh1 million ($272,294) minimum down payment required for people to qualify for a golden visa through real estate investment, as it seeks to encourage more residents and investors to establish deeper roots in the country, according to sources.
Previously, to qualify for the 10-year renewable residency programme, which was introduced in 2019, investors were required to acquire property valued at Dh2 million or above.
But for properties bought on mortgage or instalment plans, homebuyers had to make a minimum down payment of Dh1 million, or 50 per cent of the property’s value, to the bank or developer to be eligible for the golden visa.
The recent change eliminates the need for a minimum down payment altogether, according to Maroun Abou Harb, an associate at law firm BSA Ahmad bin Hezeem & Associates.
Now, investors can qualify for the golden visa if the property’s value is Dh2 million or more, regardless of whether it’s off-plan, completed, mortgaged or not mortgaged, he said.
However, the change has not yet been reflected on the Dubai Land Department’s Cube website, a customer service initiative to support investor and golden visa services for property buyers.
Dubai’s General Directorate of Residency and Foreigners Affairs website has not yet been updated to reflect the change.
The eligibility criteria for obtaining the golden residency for real estate investors stays unchanged, with the property value requirement set at a minimum of Dh2 million, the DLD told The National.
BSA Ahmad bin Hezeem & Associates was informed about the change on January 22, Mr Abou Harb said.
“No circular has been sent out yet, although when we visited the DLD at The Cube, where they handle the golden visa applications, that’s where we were made aware of this change,” said Jess Stephenson, head of sales progression at Dubai property broker Allsopp & Allsopp.
In recent years, the UAE, the Arab world’s second-largest economy, has undertaken several economic, legal and social reforms to boost foreign direct investment and attract skilled workers.
The Emirates introduced the golden visa programme in 2019. The visas are valid for 10 years and aim to encourage exceptional workers and foreign investors to establish deeper ties to the country.
In 2022, amendments were introduced to the golden residency initiative to simplify the eligibility criteria and expand the categories of beneficiaries.
The 10-year visa is granted to investors, entrepreneurs, skilled professionals who earn a monthly salary of more than Dh30,000 ($8,167), exceptional talents, scientists and professionals, outstanding students and graduates, property investors, humanitarian pioneers and frontline heroes.
“This policy change would benefit many buyers and end users as this will open up the golden visa option to pretty much everybody who’s bought a property, because most properties are valued at more than Dh2 million,” Ms Stephenson said.
“That way, all mortgage buyers would be able to apply for the golden visa, and then they can also sponsor their family and domestic staff. This means there would be more buyer confidence in the city, too.”
Another property agent said he would test the policy change first hand when one of his customers visits the DLD this week to register a transaction for a property worth more than Dh2 million.
Meanwhile, the “excellent government initiative” would help boost the property market, said Matthew Gregory, branch director at real estate agency Betterhomes.
“This enables us to have positive conversations with potential clients, especially from overseas, and help them get on the property ladder and obtain a visa even quicker with a minimal investment,” he said.
“You only have to buy a property worth Dh2 million, but you don’t have to hold equity of the same value.
“If you buy an off-plan unit, you just need to pay the down payment, which for some is only Dh50,000, and be eligible for a golden visa.”
Before this, investors needed to have equity in the property over a certain value to be eligible for a golden visa, he said.
Who is eligible for a UAE Golden Visa under new rules?
“This meant you couldn’t do it for off-plan properties because you didn’t have equity until you fulfilled a large percentage of the payment plan.”
Ben Crompton, managing partner of Abu Dhabi real estate agency Crompton Partners Estate Agents, said his company had not been informed of any changes to the golden visa application criteria.
“If the value is scrapped, it will mean a lot more golden visas will be issued. It might stimulate domestic purchases, but is much more likely to attract foreign investors,” he said.
The recent rule change regarding the golden visa through real estate investment is applicable not only to specific emirates but across the UAE, according to Mr Abou Harb.
“This change is expected to stimulate increased investment in the real estate sector. By eliminating the financial barrier associated with the down payment, more investors may be enticed to participate in property acquisitions, fostering a surge in real estate transactions,” he said.
“This inflow of investment could lead to heightened construction activities, job creation and overall economic growth associated with the real estate industry.”
The broader eligibility criteria for the golden visa may attract a more diverse pool of investors, he added.
With the focus shifting from a specific down payment requirement to the property’s overall value, individuals with varying financial capacities may find the golden visa programme more accessible.
“The rule change may serve as a strategic response to market dynamics, aiming to bolster Dubai’s real estate sector amid predictions of a potential price drop,” Mr Abou Harb said.
“By facilitating easier access to the golden visa, the government could be proactively counteracting market downturns, ensuring sustained growth and resilience. This move may not only attract new investors but also instil confidence in existing stakeholders, fostering a positive sentiment that could contribute to the stability and long-term vitality of the UAE’s real estate market.”
Updated: January 24, 2024, 3:38 PM
Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, on Sunday approved a series of projects to build more homes for Emiratis.
Having recently issued a plan to double the number of Emirati families within 10 years, Sheikh Mohammed has now designated an area for housing called Latifa City.
There, 3,500 plots of land will be distributed among Dubai’s citizens, as well as 2,300 ready-to-move-in houses valued at Dh5.5 billion.
The housing plots earmarked for citizens span 40 million square feet, and eligible citizens from Dubai can take ownership from February.
These include 2,700 plots in Latifa City itself and 800 plots in Al Yalayis 5 area. The 2,300 new houses for citizens are located across areas in Al Khawaneej 2, Al Aweer, Wadi Al Amardi, and Hatta.
“Family is the cornerstone of the nation and the foundation of all development plans. Our ultimate objective is to enhance the quality of citizens’ lives for a brighter future,” Sheikh Mohammed said.
It comes as part of a series of projects lined up for 2024, under the Dubai Social Agenda 33 – announced this month.
“Today, we announce the launch of Dubai Social Agenda 33. It is our plan for Dubai’s community for the next 10 years, with the slogan Family, The Foundation of the Nation,’” Sheikh Mohammed wrote on X earlier this month.
“Its budget is Dh208 billion over the next decade, aiming at the citizens of our families in Dubai – providing housing, improving living standards, identity, values, social cohesion, health care, and developing future skills in our upcoming generations.
“Our goal is to double the number of citizen families within the decade, providing them with the world’s best residential areas.”
Updated: January 14, 2024, 11:25 AM
RAK Properties, a leading UAE real estate developer, has announced that it has successfully sold out the first set of units at its recently launched residential waterfront development – Quattro Del Mar – in Ras Al Khaimah.
Quattro Del Mar forms part of RAK Properties’ broader master plan for Hayat Island, reinforcing Mina Al Arab’s position as a community-centric lifestyle destination in line with RAK Vision 2030.
A four-tower property, it boasts a range of premium amenities that caters to families, wellness enthusiasts and millennial investors.
Following the successful sellout, RAK Properties has released the next collection of residences for sales to local and international buyers.
“As predicted Quattro Del Mar has been widely accepted by the market, due to our lifestyle promise which comprise of a sea of luxury amenities offerings, solidifying Mina Al Arab as the most desirable residential addresses in Ras Al Khaimah,” remarked its CEO Sameh Muhtadi.
“We are launching the next collection of residences earlier than anticipated due to buyer demand,” he stated.
Additional contemporary studios, trendy and stylish one-, two-and three-bedroom apartments, spacious duplexes and garden townhouses are available for purchase today (January 11), he added.
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