By Saifur Rahmanm Business Editor
Published: December 26, 2008, 23:39

Dubai: Dubai's property developers have urged the government to re-examine the visa policy for foreigners - linked to freehold property ownership - which they say would bring help restore confidence in the market.

A number of developers said they wanted the government to start a dialogue with the real estate community in order to rescue the real estate market from falling prices, while seeking flexible payment terms so that business activities could continue.

"The market is in bad shape and needs to be rescued," said Kabir Mulchandani, chairman of Dynasty Zarooni.

"Buying and selling has nearly stopped. Although prices are coming down like anything. Even then, the investors are not buying. They are holding on to their money."

The Dubai Government, while opening up the emirate's real estate sector to foreigners allowing freehold ownership in 2002, had also made a commitment to facilitate three-year renewable residence visas to expatriate property owners, to encourage foreign investment at a time when an estimated $1 trillion (Dh3.68 trillion) Arab capital repatriated from the West was looking for fertile ground for investment following the September 11 attacks.

The decision saw the emirate's empty sandscapes turn into vibrant master-planned and beautifully landscaped communities within a few years time.

The results are visible -the Greens, Dubai Marina, Jumeirah Lake Towers, Arabian Ranches, International City, Discovery Gardens to name a few.

More than 30,000 families have already moved to their freehold homes. The repatriated capital also encouraged the government to pump money into the three palm-shaped islands.

Thousands of families have moved to the Palm Jumeirah while the second of the trilogy - Palm Jebel Ali is having infrastructure works.

Confusion

However, earlier this year, the government suspended issuing residence visas to property owners - a fact, many feel, has negatively impacted investor confidence.

"The government should stand firm on its commitment to issue visas for freehold properties, both residential and commercial. They should alleviate people's fear and apprehensions by positively reinforcing the freehold visas rule," Syed Mohammad Ali, chief executive of Fortune Group told Gulf News.

"The confusion on this issue has negatively impacted the Dubai realty sector."

"A constant communication regarding the visas structures should be given to the public."

On top of it, a massive capital outflow to the tune of Dh500 billion between July and October 2008, according to some estimates, has brought the real estate market to an abrupt halt.

Tarek Ramadan, chairman of Tharaa Holding, said the government need to launch emergency aid to rescue the market.

"Firstly, stop the bleeding in the real estate market, place emergency funds to stop this, then pump some liquidity and thirdly, allow flexiblility in payment across the value chain to give the real estate community some breathing time," Ramadan said.

"Re-introduce the property visa policy if that does not affect the country's interest in any way."