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Real estate companies hope property auctions will boost depressed housing market in Dubai

Madania Real Estate is to hold its first public property auction tomorrow and property consultancy Sherwoods is to hold an auction of up to 50 properties next month.

Madania said that the prices obtained at the auction of four properties at the Al Murooj Rotana Hotel will help to give a true indication of current market value as they will be the price people are prepared to pay in the current climate.

'The auctioneering method of sale is unique in that it facilitates sales between a buyer and vendor in the most transparent manner and puts the property before the price,' explained Madania Real Estate CEO Raymond Kuceli, a licensed auctioneer with over 20 years' experience who will conduct the sale.

The properties scheduled to go under the hammer include three villas in Arabian Ranches and one apartment in Jumeirah Beach Residence. It is part of a wider 60 day plan to get the market moving. If a property doesn't sell after an aggressive four week marketing campaign then it moves on to auction.

'Madania aims to set the benchmark for the auctioneering sales method in Dubai. We see this method becoming increasingly popular,' added Kuceli.

Sherwoods managing director Iseeb Rehman agreed that auctions can stimulate sales and its first public sale of up to 50 properties on June 4 aims to create a platform to trigger transactions.

'It will create an opportunity for transactions to happen. Transactions will happen regardless of price as long as there is a willing buyer and a willing seller. It's a way to get the market moving again,' he said.

Rehman added that in a downturned market where the numbers of transactions are greatly reduced, creating a transparent, fast transaction process will be attractive to buyers. A reserve price will be set for all properties and this reserve price will be in line with current market levels.

The properties going on offer during the Worldwide Property Show include apartments, villas, plots, offices and retail space. Sherwoods will also hold a charity auction with proceeds going to the Dubai Special Needs Centre.

If rents stay low enough to compete globally, companies will be more likely to look at Dubai as a place to relocate their staff.