The UAE government has extended visas for foreign property buyers to three years from the current six months, in a bid to boost property investment in its struggling real estate market.
According to the country’s top developer, this move will significantly boost investors’ confidence in the property market.
“The UAE federal Cabinet decision … will significantly enhance investor confidence and drive the growth of the country’s property sector,” said Mohammed Alabbar, Chairman of Emaar Properties.
As a result of the new announcement, property stocks rose on Tuesday’s trading, with Emaar stocks climbing 1.7 percent, while Aldar Properties’ shares increased 0.8 percent.
According to Citigroup, the government’s decision could significantly boost demand in the residential property sector in Dubai, where the promise of a long-term residency visa was one of the major factors of second-home purchases during the previous housing boom.
“However, the overall impact on the property market will likely be somewhat muted by oversupply issues that are being exacerbated by the ongoing completion of new properties,” said analyst Farouk Soussa.
The property market in Dubai has been hit hard in recent years, with billions of dollars worth of developments being put on hold or cancelled, while property prices dropped by as much as 60 percent due to the lack of buyers.
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