Confusion mars property visa law

Six months after the UAE announced plans to offer property buyers an extended visa, the real estate industry is still waiting for details.

People browse property ads. Lauren Lancaster / The National

Six months after the UAE made headlines with plans to offer a three-year visa to property buyers, the property industry's excitement over the proposal has turned into uncertainty and pessimism.

There have been no official statements about specifics of the law since the initial announcement.

"People are confused," said Tom Bunker, an investment sales consultant for Better Homes.

The proposal announced in June calls for the visa for property buyers to be extended from the current six months to three years.

Several reports circulating in the industry in recent weeks erroneously said the new visa rules would require a minimum purchase of Dh1 million (US$272,234) and the applicant to present verifiable income of Dh10,000 a month.

Those provisions are in the current law. But there have been no clues about the details of the new law.

"There is no law," said Ludmila Yamalova, an attorney who has been regularly checking with immigration officials. "No one has even seen a draft of the law."

The only official statement on the property visa appeared in a news release posted on the state news agency Wam on June 27, after a federal Cabinet meeting.

"The Government took a raft of measures as part of its efforts to underpin economic growth within its strategic plan 2011-2013, including extension of visa for real estate investors to three years instead of six months," the Wam release said.

The announcement was hailed as a positive step for the property market, which is looking for anything to boost sales. International sales have slowed and prices are down more than 50 per cent in some neighbourhoods since the peak in 2008.

"It's created a lot of discussion," said Jonathan Fothergill, the head of valuations for Cluttons in the UAE. "Generally it is seen as positive, but the longer it goes on unresolved, the more people are left in the dark."

The potential for long-term residency status was a key issue for many buyers during the boom times. Some Dubai developers promised buyers visas. But a 2009 law limited the stay to six months and required a Dh2,000 fee for renewal.

"A lot of people have been disappointed by the U-turn," said Shaukat Murad, the chief executive of Alpha Management, a consulting firm. "People need to see a lot more before they have confidence in the new rules."

There are complexities to the visa issue. Without a minimum value requirement, the UAE could see a flood of buyers picking up cheap properties simply for the chance at residency status.

And there are issues about which nationalities will be eligible for any visa.

"The question is still the same, who do these visa laws apply to?" Mr Bunker said.

The visa has become less of an issue in the past six months.

"I don't often get people buying and asking the question, 'Do I get a visa'?" Mr Bunker said. "I used to hear that all the time."

Property experts say they don't raise the visa issue anymore with clients. The uncertainty only raises questions about the market.

"After a while it becomes a negative," said Craig Plumb, a research head at the property consultancy Jones Lang LaSalle. "People don't know where they stand."

For many in the industry, the visa issue has returned to the wish list for the new year, instead of a marketing tool. "It's seen as a step in a positive direction," Mr Fothergill said. "But until it's sealed and rubber-stamped, it's just speculation."