The UAE has long attracted those seeking tax-free employment in a sunny climate. However, for most expatriates, retirement means returning home, for various reasons, including the lack of clear property visa laws in the country and a desire to spend their golden years closer to grandchildren and other family members. But more and more UAE residents are deciding to spend their retirement in countries other than their homelands, seeking a relaxed lifestyle, lower cost of living and ready access to activities such as golf and sailing.
Robert and Cindy Nicholas, both in their 60s, run Nicholas Publishing, purveyor of titles such as Concierge, and are based in Dubai, where they've lived for 22 years. The recent economic downturn and their advancing years were the catalysts for the couple's decision in 2000 to buy a retirement property in Cyprus, away from the current stresses and strains of their life in Dubai. "When we came here many years ago it was like a village, with many of us the same age, but it's changed a lot, and I'm ancient in Dubai terms. This is a young people's place," says Mr Nicholas. "Once you reach 60, companies don't generally issue visas, and there's a big turnover of people coming and going."
The recent recession gave Mr Nicholas the final push to retire. Sales at his company took a hit during the past year, and though he wants to ensure that the business is in good shape before he fully retires, he and his wife are looking forward to beginning the next step in their lives. "I want to get the business back on its feet for my son to take over so that I can take a back seat," he says. "Retirement is something I've been thinking of for some time."
Rather than returning to his native Birmingham in the UK, he and his wife will retire to the Mediterranean island, a four-hour flight from both the UK and Dubai. "We love it there. The lifestyle suits us perfectly; the people are so relaxed and the climate is wonderful." The couple designed a four-bedroom villa, complete with shady pergolas, a large garden and a swimming pool, in a development called Leptos Kamares Village. Situated high in the hills above Paphos, on the south-west side of the island, the first homes in Leptos Village were built in 1978, and since then 960 properties have been bought by individuals representing 56 nationalities, including former UAE residents.
A four-bedroom detached villa with a pool costs around €800,000 (Dh4.2 million), and entry-level two-bedroom villas start at around €290,000. When fully retired - within the next two years - Mr Nicholas and his wife will spend most of their time in Cyprus, and although he believes that property on the island is a wise investment, he bought in Leptos principally for its golf course, clubhouse and diverse organised activities such as cultural outings and communal dinners.
"Investment wasn't our motivation for buying, lifestyle was," he says. "We love the place and it feels so familiar. Many others from the UAE have bought there; in fact, our immediate neighbours are from Kuwait and Abu Dhabi." About 85,000 non-Cypriots own property on the island, estimates indicate, and the local government offers benefits to those who make it their retirement home: no inheritance, gift or wealth taxes, plus low personal tax rates starting at 5 per cent.
These advantages make it an attractive "next step" for those retiring from the UAE, says Sarah Lord, the financial planning director for Killik and Co, a financial advisory firm in Dubai. "It's crucial to get your finances in order before retiring, and ideally you need around 50 per cent of your salary [at the time you retired] to maintain your current lifestyle," she says. Ms Lord adds that an annual income of £50,000 (about Dh500,000) "maintains a typical professional's former lifestyle", although many of her clients, she says, live happily on £25,000 a year. Common retirement destinations among Ms Lord's current clients include Cyprus, Spain, France and Italy, which she says all have similar costs of living. Perhaps most important, however, is that these countries make it relatively simple for non-citizens to retire within their borders, including efficient and transparent visa procedures. Typical Killik retirement-age clients, according to Ms Lord, have large amounts of equity in their properties and reduced outgoings; they no longer have to fund school fees, and rarely take out mortgages to pay for their retirement homes. "A mortgage in later life is not something I'd recommend, as lenders want the security of an income, so if you do get a mortgage, interest rates will be very high," Ms Lord says. In addition to amenities and lifestyle, access to medical facilities is an important consideration, says David Jones, a former history lecturer who is now a neighbour to Mr and Mrs Nicholas in Cyprus. He and his wife, Molly, who are both in their 70s and originally from the UK, bought a two-bedroom villa at Kamares three years ago, principally because of Mr Jones' health condition. He suffers from bronchiectasis, a respiratory condition that makes him susceptible to infections, and the island's clean air alleviates his malady. When planning their retirement, Mr and Mrs Jones took into consideration the fact that Kamares has on-site medical centre. And they are relieved they chose the development for that reason, especially after Mr Jones suffered a health scare 14 months ago, while his wife was abroad. Unable to breathe properly, he staggered to his car and drove to the nearby medical centre, where he received emergency treatment and was taken to hospital. "I realised it was dangerous to drive, but I had no option, I could not talk, so to call an ambulance would have been a waste of time," Mr Jones says. "Without the centre on the doorstep, I am not sure I would be giving this interview today. I believe this centre is of great value - you never know when you may need it." The company behind Kamares, Leptos Estates is building a new retirement community in Paphos, part of the developer's US$1 billion (Dh3.67bn) project called Neapolis, which will include a hospital. Property prices in Cyprus soared by 10 per cent annually from the early 2000s until the country was admitted to the EU, in 2004. But since peaking in 2008, prices have dropped by about 5 per cent, according to Knight Frank, a residential and commercial property consultancy with offices in 43 countries, including Bahrain, and which counts many UAE residents among its clients. Prices may have dropped globally, but so has interest on savings, which prompted Ras al Khaimah residents Vicky and Fred Mawer, both in their 60s, to take their money out of the bank and invest instead in two retirement properties abroad. "Our supposed nest egg in the bank was not earning any interest, and that's what we'd planned to live on when we retire," says Mrs Mawer, who has lived in the UAE for five years. Eighteen months ago the couple bought a four-bedroom detached house in Surrey near their adult children, and a three-bedroom town house on Spain's scenic Costa Blanca. The Mawers hope to benefit from the investments, perhaps by selling one of the properties, but for now they plan to divide their time between the two. "Prices in Spain started to slump before the rest of the world, so we saw an opportunity to buy there. We're both big golfers, and we've bought right on the course." Spanish property prices are down 50 per cent in some areas from their peak four years ago. Vinci Construction UK, which is one the world's largest home builders, currently offers two-bedroom apartments starting from €195,000. A Vinci sales director, Victor Sague, says that prices have already bottomed out in Spain, making now a good time to invest. "Demand is stronger than a year ago, as people realise they can buy prime properties in good locations at around 50 per cent less than their peak." Mr Sague advises against off-plan bargains in overdeveloped areas, instead recommending existing properties in a "year-round" location. "Don't buy in a tourist resort that closes for the winter, leaving you isolated. You can now buy in locations near good infrastructure and the coast," he says. "Prices in prime locations will rise slowly but surely over a couple of years' time." While still enjoying their life in the UAE, the Mawers are worried that their Dubai-based gas and oil exploration company may not survive the recession. Mrs Mawer also fears that changes to residency laws could jeopardise their stay. "They keep changing the laws on everything, which has made us rethink our long-term commitment to the UAE. We had hoped to spend more time here when we retire, but now feel that the future is too uncertain."
HYDERABAD // For Jale and Asghar Ali Khan, a couple who for 29 years called the UAE home, moving to India for retirement was the natural choice. Mr Khan, 65, who is from India, and his wife, an Iranian national in her 50s, have always wanted to live in India. "I would visit India every two years, and I loved it," says Mrs Khan, who moved from Sharjah to Hyderabad in October 2009 with her husband. "We have so many good friends and relatives here, and it's great to have good people around to spend time with." Although Mrs Khan had been prepared to move to India, her husband - who worked in shipping and marketing at a company in the Jebel Ali Free Zone - was not ready for the move, or for retirement. "Because of the economic situation, there wasn't much work in the company, and they decided to close it down," Mrs Khan says. "It happened all of a sudden. One day he came home and said, 'this is the time, we have to leave." Although the couple had been looking to buy property in India for a few years, they felt market prices were too high. Mrs Khan says a modern, two-bedroom apartment in a good location typically costs between 3.5 million and 4 million rupees (approximately Dh281,000 and Dh321,000, respectively), while a three-bedroom apartment can cost up to 10 million rupees (about Dh802,000). "It was too much," she says. Instead, the couple decided to buy Mr Khan's deceased mother's apartment for a more reasonable price. They paid Mr Khan's siblings 8.5 million rupees (approximately Dh682,000) for the property, which includes four bedrooms with attached bathrooms, a spacious kitchen, servant quarters and a terrace. "It's huge, and it's right in the centre of the city, so we're close to the malls and supermarkets. Everything we need is close by," Mrs Khan says. While Mrs Khan is enjoying an active social life, and enjoys dining out and going to the cinema, she says Mr Khan is finding it difficult to adjust to being unemployed and living in India after residing and working abroad for 40 years. "Right now, he's not feeling it. He wants something to do - he cannot sit and do nothing. He loved working," she says. "Maybe with time he'll get used to it." Mrs Khan advises people nearing retirement in the UAE to be mentally prepared to leave to a new home, even if it's five or 10 years before they had planned. "I was prepared to leave any time, so I'm happy," she says. "One day you have to go, and there's no place like home." * Sanam Islam
