Sharjah is opening its property market to foreign investment for the first time as expatriates are granted the right to buy homes.

Leases of up to 100 years will be granted as the emirate benefits from spillover property demand from neighbouring Dubai.

For the first time in its history, the Sharjah government has passed a law enabling expatriates from any country in the world to buy property in the emirate providing they hold a UAE residence visa.

Expatriates will be able to own property in the emirate on long leases but not land, government officials said . Investment will be restricted to new investment areas on the edge of the city centre.

Initially only plots will be made available to sub-developers to build apartment and villas.

The first new development to offer the long leases will be Tilal City, a 25 million square feet development on Emirates Road close to the Al Dhaid Interchange which is being developed by Sharjah Asset Management and Eskan Real Estate Development. The project, which comprises 1,800 land plots, was officially launched on Monday.

Officials said the new rules would create “new cluster cities” outside central Sharjah which would reduce traffic and congestion in the main city centre.

The executive council resolution 26, approved by Sharjah’s deputy ruler Sultan bin Mohammed Al Qasimi, would also cut down the number of disputes caused by foreigners attempting to get around the previous rules which prevented anyone other than GCC Arabs (and a few non-GCC Arabs and Asians with special permission) from owning real estate in the emirate.

“There are over 220 nationalities here in the emirate of Sharjah,” said Hamad Salem Al Mazrooa, director general of the Sharjah Real Estate Registration Department. “But we think the biggest demand will come from Arab and Asian Muslims living here who want their families to live in a stable and safe environment.

“The only restriction is that they must have a residence visa at the time of purchase. If for some reason after the purchase their residence visa expires, they are free to hold the property, lease or sell it as they wish.”

Officials said that they were seeking to prevent developers selling hundreds of off-plan apartments to speculators who would then “flip” them on at a higher price by requiring developers to only sell a set number of off-plan apartments related to project completion.

“We want to avoid off-plan speculative flipping, as in the past in the UAE before the crisis where developers were marketing the project and didn’t finish building, took the money and left the country,” Mr Salem said.

Mr Salem said that Sharjah Real Estate Registration Department would open a small registration office at the Tilal City site where foreign investors could start to register their properties.

“This is a historic milestone for Sharjah,” said Faisal Durrani, international research and business development manager at Cluttons. “Traditionally, international investors have focused their attention on Dubai and Abu Dhabi, but the move will open up a new market, to investors residing in the UAE.

“The success of Tilal City is likely to determine whether a number of similar schemes are brought forward in Sharjah,” he added. “However, based on the number of gated community feasibility studies that Cluttons has been commissioned to undertake, in close proximity to Sharjah International Airport, we expect to see similar developments launched in the short to medium term. The current shortage of these types of communities is causing a real demand from families residing in Sharjah, but also from families who want to relocate from Dubai in search of affordability.”

The new rules are the latest move in attempts to open up Sharjah’s more reasonably priced real estate market to expatriates, taking advantage of interest from buyers no longer able to afford Dubai prices.

Real estate rules in Sharjah had prevented anyone other than UAE nationals from owning real estate, but were first relaxed after the global financial crisis to allow Arabs from the GCC to buy homes.

“Sharjah has always been much more cautious in its approach to real estate innovation than emirates like Dubai and Abu Dhabi so I don’t see the government rolling out any mass changes across the board,” said Matthew Green, the head of research at CBRE’s Dubai office.

“I imagine the government will adopt a very structured approach and will test the waters with this first development before rolling out the concept elsewhere,” said Mr Green.

“Yes, there is a lot of demand for real estate in Sharjah, but it comes from a far less international market than properties in Dubai or Abu Dhabi and will mainly appeal to GCC or Asian investors.”

In September, the Sharjah-based developer Al Thuriah revealed that it had been granted approval by the Sharjah Real Estate Department to sell apartments on a freehold basis to both GCC nationals and Arabs with a UAE residency visa at its project near the Sahara Centre in Al Nahda.

Source:thenational.ae