Can Freehold Visas Win Back Trust?

Dubai’s freehold property era is several years 
old but some of its birth pangs were never 
really addressed.

The provision of a residency visa to the freehold owner was touted as a prime attraction for customers, and while developers went to town advertising it, the ground reality was different.

Developers insisted on several conditions before they even considered processing visas for the freehold property owner, and in no time, customers resigned to the fact that the visa was just another lure to make them invest but not a serious intent to safeguard their investment.

The grey area of freehold visas worked fine when the market was booming. Customers weren’t prone to complain when sheer speculation-led investments in property could fetch them huge profits.

The visa seemed secondary and developers did little to address an issue over which they had hardly any control. After all, visas continue to be under the purview of the Naturalisation and Residency Department.

This discrepancy is finally being addressed as a federal law granting residency visas to freehold property owners is enacted, expectedly, by March. The proposal is to introduce six-month renewable residency visas, and being a federal law, it will serve as a roadmap for all emirates — some of them yet to embrace the freehold property concept.

While the modalities are yet to be confirmed, property developers have welcomed the initiative. The current financial crisis has seriously dented the fortunes of the property developers. Losses are mounting and the erosion of customer confidence is stifling the market.

The federal law, therefore, has more than symbolic value. It will be a great morale booster for the property developers, currently the favourite whipping boys for all economic woes. From the customer point of view, the law will serve as a much-needed confidence booster.

As with all regulations, there are feeble notes of dissatisfaction too. Customers want residency visas for longer periods, and are concerned that six-month renewals will be a drain on their finances.

The new residency law however does not mark the end of the doldrums that the property sector finds itself in now. The stringent terms and often non-availability of mortgage continues to dampen demand. But for now, the proposed law comes as a breather for freehold developers. It would be prudent for them to assess their existing ownership pattern and prepare themselves for a rush for residency visas when the law is eventually enacted.

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