The UAE’s series of game-changing regulatory amendments – from providing Emirati citizenship and golden visas to investors and select expats to allowing 100% ownership of businesses for foreign nationals – will significantly fuel the recovery and growth of the country’s property market, according to Lootah Real Estate Development (LRED), one of the region’s most prominent real estate developers.
In its Industry Insights Report, LRED has highlighted top 7 drivers that will propel the real estate sector’s recovery from the effects of the pandemic this 2021.
In addition to the sweeping changes in citizenship and immigration rules, LRED’s in-depth analysis underlined the landmark signing of the Abraham Accords, the extensive national vaccination programme, the gradual resumption of tourism activities, the progress in the highly-anticipated Expo 2020 Dubai, the changes in full company ownership laws, and the higher appetite from Dubai renters to become homeowners as primary contributors to the real estate rebound.
Lootah Holding’s Group CEO Arash Dara said: "There are clear indicators that the UAE’s economy will see a V-shaped recovery from the impact of COVID-19, gauging from the notable pick up in trade and tourism sectors and the renewed positive sentiments brought about by historic immigration rules and peace deals spearheaded by the country."
LRED COO Russell Owen said: "Dubai continues to be one of the most sought-after destinations for tourists and investors. Investors and end-users stand to benefit from the property price correction and we are already seeing a movement from renters to homeowners due to attractive property prices, lower mortgage rates, and higher loan to value ratio."
Top 7 drivers of real estate recovery in UAE this year are:
*Emirati nationality and passport for certain expats
In a historic move by the UAE government, the leaders have recently approved amendments to the Executive Regulation of the Federal Law concerning Nationality and Passports—allowing investors, professionals, special talents and their families to acquire the Emirati nationality and passport under certain conditions.
“This historic decision by the leaders to grant certain expats Emirati nationalities and passports will play a vital role in the country’s long-term economic diversification objectives, cementing the leaders’ commitment to have a growth partnership with the right workforce. It will be a game-changer for the UAE’s real estate sector too, as it will increase the demand from both the end-users and the investors community,” he said.
*Wide-ranging visa rules
Industry leaders also expect that the string of sweeping changes in UAE immigration, including the UAE Golden visa, which provides 10-year residency for more classes of investors, professionals, and students; the ability of foreign students to bring and sponsor their families, and the provision of 5-year renewable retirement visa to retired residents, would further beef up property demand.
Dara said: “These landmark visa rules provide a highly positive impact on the UAE’s real estate sector by creating a less transient expat population. With more people expected to stay in the country for a longer period of time, the more sustainable demand for properties will be,” explained Dara.
*Normalising UAE’s relations with Qatar and Israel
As the historic diplomatic and economic relations between the UAE and Israel normalise with the signing of the Abraham Accords in September 2020, real estate is one of the major sectors slated to benefit from the full spectrum of overseas investment from Israel. Zurich Capital Funds, for one, said it has received $500 million, in commitments from Israeli investors to invest in the UAE’s major sectors, including real estate.
In addition, the UAE has recently announced plans to resume bilateral ties with Qatar—starting with the reopening trade and transport relations between the two nations.
“The transformative economic cooperation between these nations has made many Israel and Qatari investors realise the great potentials of the UAE, and of Dubai in particular, in terms of diversifying their real estate holdings,” Owen said.
*National vaccination inspires optimism
The arrival of millions of doses of vaccines against Covid-19 has given a booster shot to the level of optimism in the UAE.
The UAE offers four vaccines against the Covid-19 infection – Sinopharm, Pfizer-BioNTech, Sputnik V, and AstraZeneca – free of charge and on optional basis to UAE nationals and residents.
*A boost in tourism with Expo 2020
The pandemic has halted most events and activities across the globe, but the greatest show on earth—Expo 2020 Dubai—marches forward this year, safely and securely.
Owen said: “Expo 2020 Dubai, along with lots of opportunities it offers for the travel and tourism sector, is a vital contributor to the potential growth of Dubai’s real estate market this year. The construction of the mega projects within the Expo 2020 site ushers in multiple opportunities and prospects for residents, who are looking to invest and rent properties.”
*Renters opting to become owners
As early as in August 2020, LRED has reported an increasing number of Dubai residents shifting from being renters to becoming first-time homeowners.
This was supported by the latest data released by the Property Finder group, which showed that the Dubai property market made a solid performance in the last quarter of 2020—posing market sales worth AED22.07 billion through 11,065 transactions from October to December.
According to Owen, a host of factors has increased interest in owning a home during this time. It includes attractive property prices, lower mortgage rates, as well as higher loan to value ratio where expats can borrow up to 80 per cent of their property purchase price and up to 85 per cent for UAE nationals.
“This growing market transaction is driven by professionals and families seeking affordable homes that are conducive both for residential and working lifestyle while building equity.”
*Full company ownership
The changes to Federal law No. 2 of 2015 of the Commercial Companies Law—allowing full foreign ownership of commercial companies without the need for an Emirati shareholder or agent—are deemed to reduce costs for companies and play a vital role in attracting more investments and liberalising business activities in the UAE.
Dara pointed out that this significant measure was set to not only help the economy gain its sterling position as a leading global hub for business but also accelerate economic growth and productivity in the UAE even further.
"With the nation’s stronger economy, investor confidence will be shored up further, and the property market will follow suit," he added.-TradeArabia News Service
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