DUBAI // Just one plot of land out of 25 offerings was sold at an auction held by Sherwoods Real Estate last week, although organisers said they were swamped with requests from potential buyers after the sale looking to strike a discreet deal with vendors. A total of 25 properties, ranging from offices and completed villas to off-plan apartments and plots of land in Dubai and Abu Dhabi, went under the hammer.
While about a dozen bids were entered across the lots, the only one that met the reserve price was for a 40,000 square foot (sq ft) plot of land close to Dubai International Airport in Al Qusais, which was only open to bidders from the GCC. It sold for Dh750 (US$204) a sq ft. The auction, held on the sidelines of the World Property Show at the Grand Hyatt hotel in Dubai, was the first by Sherwoods, to try to gauge buyers' interest and push sales in a slower environment. It attracted more than 100 people.
Jeremy Mayhew-Sanders, the head of investment and development at Sherwoods, said that after the auction bids on two properties were offered for more than the reserve price. A further four offers were made for prices higher than those seen during the auction. Mr Mayhew-Sanders said that the reluctance to bid during the auction was because people were unsure about the auction process, a system that has not been a regular feature of the local property market although it has been gaining prominence recently.
"We were swamped after the show," he said, "so it's looking reasonably encouraging. It's a question of confidence in the system of auctioning which held people back during the auction." Iseeb Rehman, Sherwoods' managing director, said the auction was more about "getting people out and seeing their interest", especially as sales were now rarely captured through advertising. "We weren't expecting to make any physical transactions," Mr Rehman said. "But it proved to us that people will come out and see. People are still trying to gauge price indications and don't know what the right level is at the moment. There is interest but many people are sitting on the fence."
Of the bids entered during the auction, the highest was Dh1.5 million for a five-bedroom villa in Dubailand that was nearing completion. People at the auction felt that while the range of property was good, prices were still too high. "Nobody has more than Dh1 million in the bank right now," one said. Anwer Moola, who owns two apartments on Palm Jumeirah, said that while now was a good time to buy, people were still driven by fear.
"There's so much bad news, everyone's scared and is holding on to their money," Mr Moola said. "If I had access to the sort of money being asked for, I would buy. A five-bedroom villa, for example, can still be rented for Dh180,000 or Dh190,000 a year." Last week's was the second property auction to take place within the past month. Madania Real Estate put four multimillion-dirham properties under the hammer at the end of last month but they failed to sell.