This week's auction, organised by Madania Real Estate, a subsidiary of Al Tamimi Investments, has been branded a flop and those who attended said the prices were too high.
Most attending were real estate brokers. Nine bidders had pre-registered for the sale but in the end only three made any bids and none of the four lots made their reserve price. Indeed two of the four properties for sale attracted no bids at all.
Madania said it still plans to hold more auctions and that the Dubai real estate industry will warm to the concept. Others pointed out that people expect to get bargains at auctions and none of the lots in this auction were in that price range.
Linda Muldoon, managing partner of Dubai-based real estate broker Gulf Platinum Properties, who attended the event, said that there are a lot of properties on the market that offer a better deal. 'There are a lot of distressed properties for sale from people who are either leaving town or just want to increase their cashflow immediately. It's those properties that should be auctioned. I'm not convinced Dubai is ready for it yet. There are too many distressed sellers in the market,' she added.
Property investors are also not convinced that Dubai is ready for the concept. 'The only way to get the best price at an auction is to have many bidders bidding against each other and in order to do that you have to set the reserve/guide price as low as possible. In fact, the lower, the better,' said one.
'For all its sheen, Dubai is not that open to new ideas. Most of the supposed innovations have been tried and tested elsewhere and transplanted to the emirate. Full marks to Madania for breaking new ground. Of course it wasn't perfect, but it did show for all to see that the difference between buyers and sellers expectations,' said another.
Raymond Kuceli, CEO of Madania, admitted that buyers and sellers expectations were not met. 'The sellers we had were all looking for another method of selling their property but were not in a situation where they were in a desperate need or distress to sell,' he added.
'The bidding probably wasn't as aggressive as we would have liked but it's a learning curve and it's a new experience for Dubai and from that we've taken away a lot,' he added.
