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Tuesday saw the UAE’s first ever property auction. Let’s not kid ourselves. It was a flop. A disaster. An embarrassment.
Before the CEO of Madania Real Estate gets on the phone to my CEO to complain about this column, (they often do, you know), let me also add that I have nothing but admiration for Raymond Kuceli.
He is trying something new and innovative in an extremely difficult market, and should be applauded for his efforts.
The staff at Madania are genuine and hardworking. From what I’m told, they put on a good show, which was well organised and structured.
But rather like me trying to play the guitar for the last 42 years, some things are just not meant to be. The concept of property auctions is that a number of dirt cheap properties are up for grabs.
You turn up with a small amount of cash, and walk away with the deal of your life. The greater the personal financial misery of the seller, the better.
Which is where last night went wrong to begin with. According to Kuceli himself, the sellers who put their properties up for sale were merely looking for another sales channel, having tried newspaper and web advertising.
They were not actually that desperate. That’s why no sales were made.
More worryingly, not a single bid was made for 2 of the four properties on show. Why? We come back to the $64 million question: when will the market bottom out? Until it has, or at least everyone thinks it has, nobody is going to buy anything.
Real estate consultant Colliers International says that house prices fell 41 percent in the first quarter of 2009.
According to a report by London-based property broker Knight Frank said house prices in Dubai fell 32 percent in the 12 months ended March 31, compared to a rise of 48 percent the previous year.
This website reported last week that prices on The Palm (for apartments) fell to three year lows just last week.
Only Latvia, a place where I could probably be a professional guitarist, faired worse.
In other words, contrary to the talk of recovery on the horizon, the figures show things are getting worse. All the talk of a “summer exodus” may be over hyped (personally I don’t think it will be that bad) but again, until the summer is over, nobody wants to take any risks.
Tuesday’s auction was the first test of the public’s appetite to get back into the market. Would they come in their hundreds, cheque books and passports ready, eager to prey on the ashes of the property boom?
Well, of the 100 people who showed up, only 9 had registered beforehand to even be allowed to make a bid. Who were the other 91 people? Around 35 journalists and 56 estate agents.
Need I say more?