Dubai's Property Market Receives a Substantial Boost from the Golden Visa Program – and Its Impact Endures

01 Oct, 2023

Dubai's Property Market Receives a Substantial Boost from the Golden Visa Program – and Its Impact Endures

Buyers in Dubai have traditionally purchased properties, whether for residential or investment purposes, with the expectation of selling them within an average of 5 years. The transient nature of life in Dubai, accentuated by the default 2-year validity period for residence visas, made long-term planning challenging, particularly for families.

The introduction of the Golden Visa program in 2018 held the potential to change this dynamic, and its impact is becoming increasingly evident. Amidst record-breaking real estate transactions in the post-Covid era, buyers and investors are adopting a more long-term perspective on property ownership. This shift is particularly noticeable in the high-end market where meeting the Golden Visa eligibility criteria was more straightforward. As these criteria have been relaxed over the past year, similar trends are expected to emerge in the lower end of the prime real estate market.

A Golden Visa in Dubai is now akin to having a permanent residence, providing 10 years of visa validity without the need for frequent renewals. This change allows residents to make more concrete plans for themselves and their families. For instance, sponsoring young children no longer necessitates visa renewals throughout their school years, fundamentally altering the way families perceive life in Dubai and their approach to real estate investments.

Prospective homebuyers are now seeking properties that meet their longer-term needs, leading to increased interest in older and established communities like the Jumeirah Islands. Buyers are willing to invest in older properties and renovate them to suit their preferences because these properties now feel like long-term homes.

Additionally, real estate in Dubai has proven to be a profitable asset class when held for an extended period. The "buy and hold" strategy, involving long-term rentals, has gained popularity. The Golden Visa, alongside other investment-friendly reforms, has boosted confidence in Dubai's business landscape. Investors are reassessing their investment choices with a longer-term perspective, especially in the off-plan sector, where they can see the potential for continued appreciation even after project completion.

One significant consequence of this long-term mindset is that properties taken off the market are less likely to be resold in the near future. This exacerbates supply issues in the market as buyers and investors hold onto available properties. On the flip side, buyers are becoming more discerning about their requirements for a decade-long residence, prolonging the transaction timeframe. Consequently, the real estate market in Dubai is adjusting to this new equilibrium, and brokers must adapt their sales strategies accordingly.

Overall, this shift toward a long-term property-buying mindset signifies a new phase of maturity for the Dubai real estate market, instilling confidence among global buyers and investors interested in luxury real estate.