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Revisit visas, but not for real estate’s sake

Revisit visas, but not for real estate’s sake

As calls are made to adjust visa rules for property investors, Kipp asks if the real estate industry is really in as bad shape as we’re told.

November 21, 2010 3:50 by



The National reports the results of a recent poll conducted by law firm Hadef & Partners that found that out of 500 people (including buyers, lawyers and brokers) 88 percent said “more flexible residence visa options for owners-investors” would aid in the recovery of the sector. Currently residency visas are granted for a period of six-months only and can be renewed by exiting and re-entering the UAE for Dh.2,000. Experts say streamlining the application process and extending the visas to two years would help encourage investors.

Kipp is never against a simplified and more generous visa system, but we have to question the power of this argument. While the claim that the real estate industry continues to take turns for the worse certainly rings true, Emirates 24-7 also reports that things may not be as gloomy as everyone thinks. According to an analysis conducted by the paper that considered the third quarter reports of 101 companies listed on the Abu Dhabi and Dubai bourses, 20 of the top 25 companies who are most profitable belong to either the banking industry or, you guessed it, real estate.

In fact, Emaar Properties came in the first place reporting a profit of Dh2.17b for the first nine months of 2010, followed by Arabtec Holding, which announced a Dh252.43m profit for the period. The two were joined by fellow real estate companies Sorouh Real Estate (Dh220m) and RAK Properties (Dh163.8m) in the Top 25 most profitable companies in the UAE. True, the profits are substantially lower in comparison to the previous year (with more than a 50 percent drop in profits being reported by both Arabtec and Sorouh Real Estate). But the bottom line is, real estate companies were some of the most profitable out there.

The issue of the visa is something the UAE government needs to visit, but for the sake of business, companies, employment and the economy in general – not for the real estate industry alone.



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1 Comment

  1. Suresh on November 22, 2010 4:08 pm

    There is an indisputable fact that there are a lot of things that have gone on ( and are still going on ? ) in the property sector in Dubai that are not fair, honest or investor friendly. A decree was passed some tie ago insisting that the contributions made by investors must be kept in “Escrow” accounts by developers. This gave to a false sense of security to many of us who now find that apparently behind the scenes , big name builders were allowed to use this funds to develop the infrastructure etc. , thus in fact jeopardizing the safety of these funds. This is something that the authorities will need to face up to one day .

    We have invested in a project where the company has apparently not even done a single days work on the site , but their sales manager told me recently that they have already spent 60% of the money they have collected from investors. On what ?

    As per the contract if the project delivery is more than 6 months late then we can get our FULL money back. That date is come and gone and there is no one to listen to our complaint.

    Dubai government has to face this music too , at some point and give justice to the hard working and honest investors who are being left in the lurch now.

    As far as the issue of Visas is concerned , the current rules are not fair. A lot of property was sold specifically because of the “promise” of residence visas for investors. To go back on their word and give expensive and difficult to renew visas may be expedient today but is is neither fair nor honorable.

     

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