In a bid to bolster the real estate investment landscape in Dubai, the UAE government has implemented a series of strategic measures. These initiatives target both national and expatriate buyers, offering compelling incentives related to bank loans and residency visas.
Dubai’s real estate market has witnessed a remarkable resurgence, with property sales surging by 80% in November 2021. By mid-December, transactions hit AED 1.31 billion, according to the Dubai Land Department. This growth is driven by government schemes designed to rejuvenate investor confidence after a challenging economic period.
The UAE’s home mortgage system, known locally as home finance, is a pivotal element of the property buying process. It relies heavily on the buyer’s salary to determine loan eligibility. Expatriates need to make a down payment of at least 25% of a property’s price, while the Loan to Value Ratio (LTVR) varies between UAE nationals and foreigners, depending on the property’s value and buyer status.
For UAE nationals buying their first home, the LTVR is capped at 80% for properties valued up to AED 5 million, and 70% for more expensive homes. Second home buyers receive a maximum LTVR of 65%. Foreign buyers, on the other hand, have an LTVR limit of 75% for properties under AED 5 million, and 65% for higher-priced homes. For second purchases, this limit drops to 60%.
Off-plan properties carry an LTVR of 50% for all buyers, regardless of nationality or property value. The maximum loan term allowed is 25 years, and the age limit for loan reimbursement is set at 70 years for nationals, 65 years for expatriates, and 70 years for self-employed individuals.
Visa regulations have also seen significant updates. Aiming to attract more investors, the government has revised policies to enhance the real estate sector’s appeal. The Golden Visa, valid for ten years, requires a minimum property investment of AED 10 million and only applies to off-plan freehold properties. Alternatively, buyers owning properties worth AED 1 million or more, or a combination of properties meeting this threshold, may qualify.
In addition, a five-year visa is available for those purchasing properties valued over AED 5 million. This investment cannot be financed through loans, and properties must be retained for at least three years. Exceptional students and certain professionals can also qualify for this visa. A three-year visa is issued for individuals purchasing properties over AED 1 million, encouraging a more permanent residency.
The UAE has introduced a six-month multiple entry visa for properties exceeding AED 1 million, allowing more flexible travel across the seven emirates. Furthermore, retirees over 55 years can apply for a five-year retirement visa, provided they meet specific property and financial criteria. Lastly, the new citizenship law offers select expatriates and their families the chance to gain Emirati nationality, significantly increasing real estate demand.
These government policies highlight the UAE’s commitment to fostering a robust real estate market. By offering diverse financial models and visa options, the UAE is not only making property ownership more accessible but also ensuring economic growth and stability.
