Enormous confidence booster in rapidly recovering real estate market

The buyer of a six-bedroom villa on Saadiyat Island became the first foreigner to receive a freehold title deed from Abu Dhabi Municipality on Thursday, according to the real estate consultancy Henry Wiltshire International.

Long-term Abu Dhabi resident Sami Ghandour, 69, an engineer born in Jordan but originally from Palestine, was handed the document by staff at the government department after completing the purchase of his new home in the Hidd Al Saadiyat development, for which he paid Dh10.8 million including fees. Abu Dhabi Municipality did not issue a comment.

“It was a pleasure to be told it was the first freehold title deed,” Mr Ghandour told The National. “I was so happy to hear it as I’ve become a part of history. The freehold was a bonus for me and it confirmed the privilege that expats can get.”

Abu Dhabi’s government made changes to real estate laws last month allowing foreigners to own freehold property in designated zones, including Saadiyat Island, to increase foreign direct investment and boost the economy. Previously, ownership was restricted to UAE and GCC nationals with foreigners only allowed to own real estate on a 99-year leasehold basis.

Andrew Covill, director of Henry Wiltshire International, the agency that brokered the deal with Mr Ghandour, said he was not expecting to receive a freehold title deed for his client when he was working with the municipality.

“At Cityscape Abu Dhabi in April they announced the fact the freehold was coming and we weren’t sure exactly when and how it was going to happen, so it was a lovely surprise when the lady confirmed it was the first freehold title deed in the emirate,” said Mr Covill.

“She was very clear about it and I asked the question three times. Sami put his arms up and said ‘yes’. We’d explained to him the other day that while the law was changing he would receive a 99-year lease and we did not know the exact mechanism of when it would change. So he bought it on the basis of getting leasehold.”

Mr Ghandour, who will relocate to the villa from his current home in Al Bateen, said he purchased the villa to allow him and his wife to qualify for one of the UAE’s new five-year retirement visas, unveiled by the Government in September. He has previously always rented properties during his 39-year residency in the emirate.

To qualify for the retiree visa, non-Emiratis over 55 must either have an investment property worth at least Dh2 million, financial savings of Dh1m, or an active monthly income of Dh20,000 or more. The visa, set to be available from this year, is valid for five years with the “possibility” of renewal for those hoping to stay longer.

“We have lived here all our lives so we think we will die here too. I did not buy the visa because of the freehold status,” said Mr Ghandour, who still works full-time in the offshore construction business. “We knew it was coming but we bought the house because we want to retire in this country. I knew that if you invest a certain amount of money you will be entitled to residency that is renewable as long as you still qualify. So the freehold was a nice surprise on top.”

Mr Ghandour, who has previously bought a one-bedroom apartment on Al Reem Island on a leasehold basis, also owns three apartments in Dubai that his children live in.

Mr Covill said the new freehold law has given expatriate buyers in the emirate confidence in the real estate market.

“Coupled with other initiatives such as the long-term visas, the government stimulus and spending, it’s very important that the Government has made the move to give people the security and added investment value of owning the land and the property,” he said.

“We’ve seen a good recovery in the Abu Dhabi market this year, which has been down for three or four years, particularly at the premium end, but we are also seeing more transactions and investors coming in at the lower end and more owner-occupiers.”

While foreign investors can buy freehold property in over 15 designated investment zones in the emirate, it is unclear how the new law will affect existing real estate leaseholders.

“The big question is whether this will apply retrospectively to existing owners,” Ben Crompton, managing partner of Crompton Partners Estate Agents in Abu Dhabi, told The National last month.

Originally published on The National on 30/05/19

See all Buying News >