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DUBAI MAY LOSE FOREIGN PROPERTY INVESTORS

Wednesday, 27 Aug 2008

According to the officials who represent property developers in Dubai, if master developers like Emaar Properties discontinue the practice of giving residence visas to people who invest in property in Dubai, the emirate will lose its bargaining power in the property market. Currently most foreign investors are reassured by the fact that there are no restrictions on them travelling to and from the emirate. Since the same investors who buy a Dubai accommodation also invest in other sectors of the economy, and by doing so inject a considerable amount of money into the system, Dubai’s financial system will suffer.

Director of sales and marketing at Al Dua’a Holding, Noreen Khan, said, “If the residence visa is taken away or not offered, investors will look for other safe havens, and Dubai will lose its winning edge.”

Emaar, which is the largest Middle Eastern property developer, has notified its sub-developers to discontinue approving the residency visas for investors until further notice. According to a company spokesperson, the Dubai Naturalisation and Residency Department (DNRD) has instructed Emaar to discontinue their acceptance of sub-developers’ residence visa applications.

Union Properties, a Dubai property developer that is constructing F1-themed parks, has said that the DNRD is responsible for granting residence visas, and it therefore cannot guarantee these to potential investors. Muzaffar A Soofi, general manager of Dubai-based Pride International Real Estate, predicted a temporary reduction in the number of investors purchasing property in Dubai, due to the lack of certainty regarding a residence visa, but feels that this will change when investors realised that rules can and do change from time to time.

Investment in Dubai property has burgeoned since 2002, when the emirate began allowing foreigners to purchase properties in certain areas, and prices have increased by around 800% since then.