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Discuss this article (10 Comments)Dubai poised to host its first property auction
by This email address is being protected from spam bots, you need Javascript enabled to view it on Sunday, 24 May 2009
UNDER HAMMER: Dubai is set to host its first real estate auction. (Getty Images)
Four properties in Dubai will go under the hammer on Tuesday, the first public real estate auction in the emirate.
Three villas in Arabian Ranches and one apartment in Jumeirah Beach Residence are to be auctioned by local broker Madania Real Estate, providing a barometer of health for the property market.
Madania CEO Raymond Kuceli said: “We are very excited to hold our first Dubai auction event and keen to see a true reflection of the current market value of these properties.”
“The auctioneering method of sale is unique in that it facilitates sales between a buyer and vendor in the most transparent manner and puts the property before the price.”
Property prices have collapsed in Dubai as speculators fled last year in the wake of the global crisis.
Real estate consultant Colliers International said house prices slid 41 percent in the first quarter of 2009.
The auction will take place at the Al Murooj Rotana Hotel on Tuesday evening.
Madania is a subsidiary of Al Tamimi Investments.
READERS' COMMENTS
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Property Auction
Posted by Omar Shamma, Dubai, UAE on Monday 25 May 2009 at 18:44 UAE time
Whilst I agree that auctions would in fact reflect true CURRENT pricing, the auctioning of only 4 properties will not be sufficient to reflect true market values. With 4 distressed buyers pitted against 4 "vulture" purchasers it can hardly be reflective of the market. Each of the 4 properties on offer woule be unique, so the number os far too low to enable a credible measure of market value. If the auction were for say 50 propertries then one can have a better measure of market value.
Posted by Omar Shamma, Dubai, UAE on Monday 25 May 2009 at 18:44 UAE time
Whilst I agree that auctions would in fact reflect true CURRENT pricing, the auctioning of only 4 properties will not be sufficient to reflect true market values. With 4 distressed buyers pitted against 4 "vulture" purchasers it can hardly be reflective of the market. Each of the 4 properties on offer woule be unique, so the number os far too low to enable a credible measure of market value. If the auction were for say 50 propertries then one can have a better measure of market value.
Economics 101
Posted by The Consultant, Dubai, United Arab Emirates on Monday 25 May 2009 at 16:12 UAE time
Yes Mrs. S, that's the point - if you want to sell your property right now, you need to be willing to sell it "cheaply". Whether you do it through an auction or listing with an agent, the outcome is much the same - owners willing to accept a distressed price will most likely find a buyer, those who want a high price will not. Thus ergo, the "distressed" price is actually the current market price.
Unfortunately for homeowners, new distressed sellers seem to be coming on to the market as fast as the few vulture investors can buy the existing stock up, so expect the market to be distressed for a while yet.
Posted by The Consultant, Dubai, United Arab Emirates on Monday 25 May 2009 at 16:12 UAE time
Yes Mrs. S, that's the point - if you want to sell your property right now, you need to be willing to sell it "cheaply". Whether you do it through an auction or listing with an agent, the outcome is much the same - owners willing to accept a distressed price will most likely find a buyer, those who want a high price will not. Thus ergo, the "distressed" price is actually the current market price.
Unfortunately for homeowners, new distressed sellers seem to be coming on to the market as fast as the few vulture investors can buy the existing stock up, so expect the market to be distressed for a while yet.
Auctions
Posted by Mrs S on Monday 25 May 2009 at 10:38 UAE time
How can any market value be gained from an auction at this time? It could be different when the markets are stable but surely the only reason that the properties are in an auction, at this point, is that the owners need to sell them quickly and cheaply.
I really do hope that the auction is a success and correct interpretation is made on the sales. The medium of auction is another quick and transparent method of property transaction. However, if it goes wrong and reserved prices (which are probably already slightly below market value) are not reached nobody with a product in demand will put their unit to auction as it will have the stigma of only catering to cheap and distressed properties where lower values can be paid.
Posted by Mrs S on Monday 25 May 2009 at 10:38 UAE time
How can any market value be gained from an auction at this time? It could be different when the markets are stable but surely the only reason that the properties are in an auction, at this point, is that the owners need to sell them quickly and cheaply.
I really do hope that the auction is a success and correct interpretation is made on the sales. The medium of auction is another quick and transparent method of property transaction. However, if it goes wrong and reserved prices (which are probably already slightly below market value) are not reached nobody with a product in demand will put their unit to auction as it will have the stigma of only catering to cheap and distressed properties where lower values can be paid.
property auction
Posted by John, Dubai, UAE on Monday 25 May 2009 at 09:46 UAE time
If it was a one house one time auction you would be correct - means nothing. But there are 4 or 5 houses I understand and my point is that other agents may pick up on the auction modality and then we get useful information. One house at auction provides no information but 50 or 100..
Dubai market lacks information so we shall see
Posted by John, Dubai, UAE on Monday 25 May 2009 at 09:46 UAE time
If it was a one house one time auction you would be correct - means nothing. But there are 4 or 5 houses I understand and my point is that other agents may pick up on the auction modality and then we get useful information. One house at auction provides no information but 50 or 100..
Dubai market lacks information so we shall see
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