The UAE government's announcement for a five-year residency visa for retired expatriates aged 55 and over is expected to result in increased investment in the property sector. One of the visa requirements is for the expat to have an investment in a property worth Dh2 million. This is likely to see increased take-up of properties and maybe even the emergence of a new alternate asset class in the UAE - retirement communities.
The earlier announcement of 10-year residency visa for certain professionals and investors as well as 100 per cent ownership of foreign companies are expected to give an additional boost to the market since it may encourage expats to put down more stable roots in the UAE.
Expatriates are typically sponsored by the company they are employed by or by a family member who is employed. UAE residents who find themselves out of work or are retiring from work are forced to return to their home countries without residency. There are a host of people who would be happy to continue to make the UAE home for as long as the government extends a place for them.
With many developers offering flexible payment plans, coupled with lower prices and the government's support for people to stay in the country longer, market observers hope to see continued investment in the property sector.
A paradigm shift
"In line with ongoing measures to improve investor confidence and sentiment, this new announcement is also expected to positively impact the UAE property sector over the coming years, bringing a boost to both supply and demand, by way of attracting and retaining expats after retirement. This is expected to trigger a paradigm shift - from being a transient destination to a long-term avenue for expats to settle down in the country post retirement," says David Abood, partner at Core.
"There's no doubt that having the opportunity to stay in the UAE where expats enjoy its safe haven status would have a positive impact on the property sector by encouraging home sales around the country, as this is one of the optional requirements to gain UAE residency after retirement. Also, it may encourage retirees from elsewhere in the world to choose the UAE as a place to buy a home and move to for their retirement," observes Haider Tuaima, head of real estate research, ValuStrat.
While the UAE's economic strength still proves to be a draw for expats, the major changes around residency rules will help create an even more stable and secure UAE and embrace a wider international appeal as a retirement destination. In addition, long-term prospects might result in more expats looking to invest. And with the retirement landscape changing, the economic and environmental situation will benefit, as more non-locals will aid the growth of healthcare, real estate and infrastructure, said Kashif Shahzad, president of Rijas Aces Property Development.
Dubai has traditionally seen a very transient expat population. This move will give a sense of security for those nearing retirement age. The cabinet's decision to enforce the long-term visa law will allow expats to look at Dubai with more longevity.
"We expect to the move to encourage people to switch from renting to owning property as the barriers to ownership - such as lack of security on visas and the amount of red-tape involved in the purchasing process - start to be eroded by these forward-thinking measures," reckons Samer Abdin, general manager of dubizzle Property.
There are just over 150,000 residents aged 55 and over as estimated by the 2017 Dubai Statistics Centre of Population and Gender Report. "According to Property Finder research, over the last few years, the trend of people over the age of 50 buying property in Dubai has declined by about 40 per cent. This could be attributed to the fact that retirement was never a viable option here," explains Lynnette Abad, director of research and data at Property Finder.
The current property value for residents to be entitled to an investor visa in Dubai is Dh1 million. This is a two-year renewable visa.
There are several property options for those looking with a budget of Dh2 million at the moment. "A buyer will have the choice of two-bedroom apartments in Downtown, a beachfront apartment on the Palm or Jumeirah Beach Residence, or a marina-facing apartment [1 or 2 bed] in Dubai Marina. If you're looking for a villa, there are 2-4 bedroom options across The Springs, Arabian Ranches, Victory Heights, Mira, Town Square, Jumeirah Village Triangle, Jumeirah Village Circle and more," says Paul Kelly, operations director at Allsopp & Allsopp.
The average sale price for the last few years has been Dh2.5 million, so the new announcement fits properties well underneath the average transaction price in the market.
Areas for apartments at this price point and beyond include Al Furjan, Business Bay, Damac Hills, Downtown, Dubai Marina, Sports City, JBR, JLT, MBR City, to name a few. Areas for villas include Al Furjan, Arabian Ranches, Dubai Investment Park First, Emirates Hills, Green Community Motor City, Jumeirah Islands, Jumeirah Park, Jumeirah Village, Palm Jumeirah, MBR City, Springs and Meadows, The Lakes, Victory Heights, and more.
"Due to the softening in sales prices over the last three years, Dubai properties have become extremely attractive compared to other global gateway cities. At Dh2 million, you can acquire apartments and entry level villas [primarily two-bedroom units] across most centrally located mid to upper mid-market communities," adds Abood.
The initiative may encourage more investment in purpose-built private accommodation for older generations. "This is a burgeoning alternative asset class in many locations in the West with sophisticated master plan communities developed for retirees," says Tuaima.
According to Allsopp & Allsopp, approximately 15 per cent of their buyers are 55 years old and above. "Some clients will want to be in an apartment in the city or by the beach, some will like to live by a golf course, some will like to be on the park in an area like Green Community where they can go for long walks," concludes Kelly.
Source: Khaleej Times