Residency visas mooted for Abu Dhabi property owners

Brigadier Nasser Al Menhali, the acting Director-General of the federal Naturalisation and Residency Department announced this week that the Ministry of the Interior was looking at finalising the new visa laws within the next month, with the roll out expected this year.

The scheme will grant residency to owners of freehold properties, regardless of the size or value of the property.

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.

'We are looking to unify the procedure for the issuance of residency visas for expatriates who purchase properties,' said Al Menhali.

The visas will be issued on a renewable six month basis.

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 announcement addresses a core issue behind investor confidence. Although not as widespread a practice as in the Dubai property sector, some developers in Abu Dhabi had attracted prospective buyers by claiming that the units were accompanied by residency status for the investor.

Now, with the market in a downturn, initiatives such as this are seen as a welcome indication of government support for the sector.

Developer incentives

Developers in the UAE capital are also beginning to offer their own incentives to attract investor interest.

Arady, a property market-focused private equity and investment firm, announced that it would pass on the benefit of the fall in construction costs to buyers of its Reem Island project. The group said that it would lower prices on units at the, as yet untendered, Helix Towers project by 20%.

Bloom properties, the company behind the Bloom Gardens development, a community project in the centre of Abu Dhabi targeting Emirati investors, also announced that it would be lowering its prices - an offer which also covers retroactive purchases.

Average prices in Abu Dhabi have fallen approximately 18% since October as the emirate feels the effects of the global slowdown. Despite this analysts remain cautiously optimistic about the property market's future, citing the continuing supply/demand imbalance and pointing to the fact that rental prices continue to hold steady, despite previous warnings that a fall in leasing prices would be seen by then end of Q1 2009.

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