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Sun, Nov 17, 2024 | Jumada al-Awwal 16, 1446 | DXB
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Dubai to increase property sizes after change in Golden Visa criteria sparks demand
In January, Dubai dropped the requirement of a minimum down payment of Dh1 million to be eligible for the Golden Visa
Photo used for illustrative purposes
Demand for properties valued at Dh2 million has massively increased in the wake of Dubai dropping the requirement of a minimum down payment of Dh1 million to be eligible for the 10-year residency.
Industry executives say that many property developers in Dubai are increasing the size of apartments to accommodate the growing demand for Dh2-million properties while investors with Dh1.5-million-plus investments are increasing their budges to reach the 10-year residency eligibility threshold.
Since the introduction of the Golden Visa for property investors, demand for real estate has grown exponentially, attracting massive foreign investment as well as encouraging existing tenants to turn to ownership to beat rising rentals in the city.
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In January, Dubai dropped the requirement of a minimum down payment of Dh1 million to be eligible for the Golden Visa to give a fillip to the growing real estate sector. This has resulted in more diverse buyers entering the local market.
Farooq Syed, CEO of Springfield Properties, said demand for properties that make buyers eligible for Golden Visa has grown exponentially.
“We are getting many clients from Syria, Iran, Pakistan and other nationalities who don’t have a strong passport, who are shifting from one-bedroom to two-bedroom to be eligible for the 10-year residency. One of the clients was about to buy a Dh1.9 million property, but he changed his mind and decided to opt for a Dh2 million property due to Golden Visa eligibility. Customers who are looking to invest Dh1.5 million plus are increasing their budget to Dh2 million now,” Syed told Khaleej Times.
“Even developers are now going for slightly larger sizes to accommodate such customers. I know a developer who was pricing his units at Dh1.8 million to Dh1.9 million, but then he decided to increase the size of the units to accommodate the growing number of clients who want to buy Dh2 million for Golden Visa," he added.
Imran Farooq, CEO, Samana Developers, said there is a high interest in Dh2 million property and the new regulation brought a spin-off trend with buyers going for 2-and-3 bedroom options with the value of Dh2 million or higher.
Under the new system, he said, a buyer paying the minimum down payment of 10 per cent or registering with the Oqood (Initial Sale Contract – a digital certificate provided by the Dubai Land Department when a property is off-plan or on a payment plan) makes him/her eligible for the Golden Visa.
“The new rule is expected to convert tourists into long-term residents of Golden Visa holders. The tourist, especially the new one, feels confused about getting the right agent, visiting different properties and later deciding on a suitable property for him. Off-plan options make his life easier and investment safer,” Farooq said.
Generally, he said, an off-plan market has a 15 to 20 per cent down payment trend, depending on the payment option selected by the buyer. “That means for a Dh2 million property purchase, Dh300,000 or 15 per cent is practically the down payment to be eligible for the Golden Visa. And again, the amount for the down payment depends on the choice of location and the type of property,” he said.
Massive demand
Sijo Jose, team lead at Betterhomes, said the UAE recently abolished the mandatory Dh1 million minimum down payment for qualification for a Golden Visa, aiming to promote increased residency and investment in the country.
“In the latest update, eligibility for a Golden Visa is granted to buyers investing in off-plan properties if the project is under construction and has completed 40-50 per cent of the construction, with the minimum down payment determined by the developer, usually ranging from 20-30 per cent of the purchase price,” he said.
Jose added that the removal of the minimum down payment requirement for the Golden Visa could stimulate increased demand for properties valued at Dh2 million.
“By lowering barriers to entry, particularly through reduced down payments, properties become more accessible to a broader range of buyers and investors. This enhanced accessibility is expected to spur demand within this price range. However, the overall impact on demand will depend on various factors, including economic conditions, investor confidence and the specific dynamics of the Dubai real estate market,” he said.
Muhammad Binghatti, CEO of Binghatti Holding, said Golden Visa was integral with a lot of buyers coming and finding the Dubai real estate market lucrative.
“Almost every buyer I heard of over a certain value of investment is always interested in Golden Visa. So it has helped push the market. A lot of people, families and businesses are coming to Dubai to settle down here and they want this 10-year residency visa,” he said.
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Waheed Abbas
Waheed Abbas is Assistant Editor, covering real estate, aviation and other business stories that directly affect the lives of UAE consumers. He frequently reports human interest stories, too.
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