All eight of the properties put up for auction by Madania Real Estate fail to make their reserve price, with potential buyers saying prices are still too high.
Bids placed but no sales made at Madania auction
DUBAI // All eight of the properties put up for auction by Madania Real Estate on Wednesday night failed to make their reserve price, with potential buyers saying prices are still too high. The auction, which was the second held by the property broker in two months, attracted just 30 people, about five of whom registered to take part. Bids were placed on three of the properties, with the highest being Dh3.3 million (US$898,000) for a four-bedroom villa in The Meadows. A four-bedroom apartment in Jumeirah Beach Residences was also popular and bidding reached Dh2.6m. The highest bidders were given the opportunity to negotiate a price with the seller after the auction.
While there was some competition among those who took part, potential buyers felt the asking prices were still too high. "People are interested in buying at auction if the prices are good, but they are still too high," said Abdul Rehman Ali, who is looking to buy property in Dubai. "They should be lower than the market value, which is why people come to auctions." The lack of sales has not deterred Madania from holding more auctions, a process that is being seen as a way of pushing sales in a slower environment and gauging buyer sentiment. It plans to hold its next auction closer to Dubai's Cityscape property exhibition in October.
Raymond Kuceli, Madania's chief executive and the event's auctioneer, said a "gap had been bridged" between the latest auction and the one held in May, with buyers' and sellers' expectations moving closer together. "This auction was more about seeing people being more comfortable with actually bidding on real estate," Mr Kuceli said. "Even though the bids were below market, they were actually bidding up and had a desire to want to buy.
"Two out of three of the bidders said they wanted to negotiate further and I'm confident we'll sell at least one of the properties. I know this process will take some time, but we're not going to give up on it. I believe it works and is the most transparent way of selling property." Sherwoods Real Estate held an auction last month, where only one plot of land out of 25 lots made the reserve price. Property prices in Dubai have fallen by about 40 per cent since last October, although there have been recent signs of stabilisation in areas such as Palm Jumeirah, which was one of the hardest hit developments.