Property investors went to auction to purchase villas that had been repossessed after their previous owners defaulted on their mortgages.
Dubai villas sold at auction as buyers return
DUBAI // Investors checked their smartphones, tablets and notepads for property details yesterday before lifting blue paddles to confirm their bids.
Indian, Pakistani, Emirati, Arab and Chinese residents and brokers snapped up villas at competitive prices at an auction that officials hope will stimulate interest in future bulk sales of homes that have been repossessed by banks.
Of five Dubai villas with unpaid mortgages that went under the hammer, only one was not sold.
The homes, all in the Springs, fetched between Dh1.2 million and Dh2.26m - about 15-30 per cent above the asking prices.
More than 160 people packed into a hall at Dubai Land Department for the hour-long auction.
The next sale, tomorrow, will feature repossessed flats.
"This is a really efficient way to get banks to write off a portion of their debt," said Kalpesh Sampat, director of the property company SPF Realty, who successfully bid for a villa.
"Plus, you are sure of a clear title. People have peace of mind because the Land Department is involved."
Investors had done their homework about the locations and sizes of the property. The bids rose or flat-lined depending on whether homes faced leafy parks, quiet lakes or busy roads.
Chinese investors placed bids but opted out when it got hectic.
"Dubai is attractive to Chinese people who work here," said Wendy Shen, a Chinese national and marketing manager of West Legend Real Estate. "Many put money in Hong Kong and Singapore. But Chinese who set up business here and have bought houses to stay, they are looking for more investment."
Land Department officials said the level of investor participation was encouraging.
"There is a lot of interest and the bidding has been good," said Humaid Omran Al Shamsi, section head of the registration department. "The concept is still new but properties are selling well."
Property prices have fallen by as much as 60 per cent since 2009 because of the global recession, job losses and spiralling debt.
As owners defaulted on payments, hundreds of properties went into foreclosure in Dubai. They were slow to come up for auction because officials worried about flooding the market with low-priced homes.
The Land Department registered its first auction of repossessed homes in December. It has said that more than 80 properties will be auctioned off this year.
Asians were the biggest buyers last year, while British residents topped the list of European investors.
The value of property transactions increased by 20 per cent last year from 2010, touching Dh143 billion.
Experts see these auctions as a positive indicator.
"The market conditions are improving," said Ian Albert, regional director at the property consultancy Colliers. "The history of auctions in the UAE is still new. As it grows, it increases confidence of banks and investors."