Property auctions likely to gain in popularity in Dubai
The Harbor Report, a publication on news and trends in the real estate industry, published by Harbor Real Estate, is predicting an increase in the number of housing auctions in the Emirates in the coming few months.
“Auctions are very popular and well established in many other countries around the world. Our findings suggest that as the Dubai Real Estate industry matures, auctions will soon become more popular on the Dubai property scene. This is not likely to replace the traditional ways of selling, but will rather enhance selling operations and give the buyers in this country more options,” said Mohanad Al Wadiya, Managing Director of Harbor Real Estate Brokerage.
The Harbor Report predicts that the industry will see a shift towards auctions as more and more sellers compete for a sale and struggle to find buyers. Whereas Dubai was previously a seller’s market due to the high number of off-plan property sales, in the post-recession environment it is the buyers that now have significant market influence.
“The primary advantage of an auction is that it is competitive, well regulated, fair and transparent. In addition, properties that are auctioned are usually purchased at a price that reflects the current market value. This is due to the competitive bidding process and the fact that the buyers determine the purchase price. If the auction system is well regulated and administered, buyers know they are competing fairly and on the same terms as all other buyers. Furthermore, auctions are convenient in that they can effectively eliminate long negotiation periods and facilitate quick property transactions,” added Al Wadiya.
Property auctions are organized so that the person who offers the highest bid on the property wins the right to buy it. To take part in the auction, interested individuals must register beforehand. To ensure that all bidders are fully briefed about the properties for sale, tours will be arranged at select properties for all registered individuals.
“The idea behind the property tours are to ensure that all bidders are fully briefed about the properties they are interested in purchasing. This should hopefully encourage more buyers to go to an auction as well as make the process easier, more informative and more enjoyable,” said Al Wadiya.