Sunday, April 12, 2009

Dubai considers new options for selling properties to Britons

The first-ever mass auction of Dubai properties happened last week.

Earlier several Dubai properties were being purchased by investors in the UK. However, with the Pound value plunging to record-lows, mortgages slowed down, and several of the developments in the city were put on hold, traditional methods to showcase developments to Britons are no more successful.

The Managing Director of Properties Dubai, Asif Choudhary, agreed that they have stopped receiving any inquiries for properties, and hence planned a way out. Auctions are a great way for generating big business in the UK.

The Sales and Marketing Director at Hircon International, Manish Bhatia, said that for any property market to grow stronger it needs to be changed hands from someone who is financially weak to the one who is financially strong.

The off-plan properties were hardly generating sales, except for that of RAK Properties. With several developments in Dubai, being put on hold, British investors were questioning if certain projects, would ever get completed.

Although the bargaining element when buying at an auction is justified, keeping the current scenario in mind, those who listed Dubai Properties were not prepared to given them away.

According to Choudhary, there are two types of sellers in the market currently - those operating at a loss but remain financially stable, and also the overleveraged who would sell for less. But the latter is more than the former in the market.

Bhatia points out that making sales at this point does not indicate a market recovery, and emphasized that for this to happen, lending too, may have to ease.

For a recovery to happen, certain other developments will have to be considered. People may purchase at cheaper prices, but that may not be a sign of recovery. One may have to wait until the lending eases up, he said. Bhatia emphasized that the auction format is an effective strategy, and it would be good to carry out such a format in Dubai.

Choudhary agreed that the market for selling Dubai Properties to people in the UK is yet to recover, but auctions may help in maintaining interest at the movement.

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