Residency visas for freehold property owners to be introduced in the UAE

Residency visas for the owners of freehold property in the United Arab Emirates are to be introduced in a bid to boost the struggling real estate market.

A new federal law is expected to be introduced this year that will allow property owners to obtain a six-month renewable residency visa. The government is also looking at proposals to extend the visa scheme to include the families of property owners, although this is in the very early stages.

Nasser al Minhali, the acting director general of the federal Department of Naturalisation said the aim was to create a unified visa system related to property purchases and that the visa would be available to all nationalities and would not depend on the value or size of the property owned.

Analysts and industry insiders have welcomed the proposal as an incentive to increase interest in the property market, although the short-term nature of the visas is still viewed as a downside.

The move comes amid fears that increasing job cuts will have a severe effect on the already downbeat real estate sector. Some believe that a new wave of job losses are likely in the next couple of months as both developers and real estate agencies struggle to cope with the global economic downturn.

Vince Easton, sales director at property consultant Sherwoods said Dubai's uncertain job market would have a big impact on prices in the next three months.

'In March we could have another potential leaving situation so job cuts will dictate where we go on prices. We are a nation of expats who have come here to work, make money and live the dream. If jobs are under threat it makes that dream more difficult,' he said.

A report by Swiss investment bank UBS last month forecast that Dubai's population could shrink by 8% in 2009 due to companies axing staff.

In Dubai prices have fallen by 50% in some areas and rents have come off as much as 40%.