Markets Update: Property stocks were the most heavily traded stocks this morning after the government said it would extend visas to three years from the current six months - with video.
Property stocks surge in UAE after visa announcement
The government's decision to extend visas for homebuyers led bellwether property stocks to hit new highs this morning as investors expect the move to buoy the beleaguered sector.
Under the new law announced yesterday property buyers will be able to obtain a visa for three years instead of the current six months.
It is expected to offer a fillip to the struggling property market, which has struggled to rebound from the crash at the end of 2008.
Shares in the biggest real estate stocks climbed higher, as Emaar Properties, the developer of the world's tallest tower, rose 2.7 per cent to Dh3.04, Arabtec, ticked 1.6 per cent higher to Dh1.27 and Deyaar Developments, which added 1.05 per cent to 29 fils.
Analysts welcomed the move as a massive step forward, particularly for Dubai's market.
The promise of a long-term residency visa was a major driver of second-home purchases during the real estate boom prior to mid-2008, wrote Farouk Soussa, a Citi economist, in a note to investors.
"It's a small step in the right direction," said Chet Riley, a property analyst at Nomura.
"From a stock perspective, the Dubai stocks should outperform Abu Dhabi. In terms of the residential cycle, Dubai is nine months ahead of the property cycle," Mr Riley said.
But caution over the existing problem of property oversupply remained.