61% say they would not buy property at auction

Almost two thirds of those responding to an online poll say they would never buy a property at auction because they would have no real idea of what they were buying.

The survey by Arabian Business comes on the back of the first-ever auction in the UAE that failed to sell a single lot amid criticism the homes on offer were too expensive.

In line with this, 17 percent of those responding to the poll said they thought auctions were a great way to buy property as knew you had bought a property at the real market value.

However, the largest proportion of responders, at 61 percent, said they would never buy at auction because purchasers had to put a lot of money down, without really knowing what they were paying for.

At the Madania auction on May 26 successful bidders were required to put down a 20 percent deposit on the property and pay a two percent Land Department fee.

However, auctioneers said after the event that the one of the main problems had been that the concept of auctions was new in the UAE, which meant buyers and sellers’ expectations may not have been met.

“It probably wasn’t as aggressive [the bidding] as we would have liked but it’s a learning curve and it’s a new experience for Dubai and from that we’ve taken away a lot,” said Raymond Kuceli, CEO of Madania Real Estate.

However, just seven percent of those responding to the same poll said they did not know how an auction worked.

A further 15 percent thought auctions were a good idea for people who wanted to sell quickly, but were unconvinced buyers always got a good price.           

On Thursday the UAE’s second property auction will be held in Dubai by Sherwoods, who has said that prices must be right to attract buyers.

The firm may whittle down the number of lots from 50 to 20 to ensure the reserve prices are low enough to attract buyers, it reported last week.

The firm will auction a mixture of completed and off- plan commercial and residential properties along with plots of land in a bid to kick-start demand in Dubai.

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