Property market fails its big test

Posted by: Shailesh Monday, 29 June 2009 11:20 AM[UAE] - United Arab Emirates

In Dubai, nobody is intrested in selling or buying the property till the picture gets clear in which direction market will move and thus such auction will see similar results. One can quote the price as low as he desire for buying or as high as he wants for selling. Those percentage fall in property prices are imaginery figures for individual. Writing article and expressing view on it seems to be new favorite pass time................ let keep busy till the market recovers or fall.

Posted by: R.A. Monday, 1 June 2009 9:00 AM[UAE] - UAE

Anil - A very good article, well done. Property auctions typically indicate the true, market value of a property in a downturn, the price paid in an arms length transaction, between a willing buyer and a willing seller. Not always in an auction in an established, historic market are the sellers distressed but sometimes the asset may have reached the end of its economic life cycle for that particular seller and will provide another investor with scope for a return. Clearly the growth that has been experienced in Dubai over the last 24 months (although I am not sure, no matter how respected a company, Knight Frank can provide realistic statistics when they do not operate in Dubai) was unsustainable and not built on any solid, fundamental investment priciples so house prices only now are beginning to find their real value, after the speculators have been pushed from the market due to lack of finance on off plan properties. It is now that the 'true', traditional investors will benefit. Those who hold property for a number of years not weeks and work a property through it's lifecycle. The auction was a fantastic idea and well done to Madania for trying to bring a new concept to the region, an incredibly difficult task with the gluttony of properties on the market (in differing communities) that are all the same. Due to this, for the auction to be a success, it's almost essential for there to be distress among the sellers in some form, where there is an absolute need to sell (whether that means making a loss or not) as there is nothing else to differentiate between properties and little, if any, scope to add value. I'd welcome more auctions in the future but there will need to be some fundamental changes before it will be a real success.

Posted by: wildyuvaaa Monday, 1 June 2009 7:38 AM[UAE] - UAE

Well done Anil. The open and transparent views of what is happening in Dubai real estate sector are hard to come. This kind of open views should encourage others to follow suit. For sure everyone who has little common sense should have realised by now that Dubai property market is not down but dead, and ofcourse you cannot bring back something which is nomore.

Posted by: AVH Saturday, 30 May 2009 11:25 AM[UAE]

Amidst the polarization, with the western media gloating over Dubai's real-estate problems and the local media acting like nothing ever happened, it was nice to see an honest and candid report with a bit of humour thrown in on the side. I guess that is why I read Arabian Business at least twice a day, wherever I am!!

Posted by: SNY Friday, 29 May 2009 2:01 PM[UAE] - UAE

I was one of the sellers at the first and only RERA APPROVED property auction. My property was the only property to receive the highest amount of bids - PLEASE NOTE: It did not sell and had to be passed over AS the highest bidder did not reach the amount to cover my outstanding mortgage to the bank in addition to the Agents commission or transfer fees required at the Land Department for transfer. PLEASE NOTE AGAIN: It had nothing to do with not reaching the sellers reserve price. I am not a distress seller in the real sense I am a "distress seller" because I will lose FULL CUSTODY OF MY DAUGHTER to a GCC National if I am unable to show monthly income/life savings and a roof over my daughters head to the High Courts in the UK. My hats off to Al Madania for putting on such a wonderful 3 week campaign and to their transparency as well. There are only 3 real estate agents in Dubai anyone should deal with and Al Madania are one of them. I myself have owned and run real estate agencies in Qatar and worked for some of the top developers here in the UAE. (a trilogy can be written on them!) So to the writer of this article on Arabian Business.com as well as all of you whom have chosen to comment - Perception and Reality my friends - Perception and reality. You are all so very, very shallow and obviously still need to experience alot more in the book of life. From the Seller of Lot 1 at Arabian Ranches who still lives in hope that someone out there will purchase my wonderful home so that I do not lose my daughter.