Dropp the Pilot
21st Dec 2008, 08:00
There was an interesting dialogue on this subject not too long ago. Would anyone like to start it up again by forecasting when it might be time to pick over the bones?
Property bargains fail to sell
Robert Ditcham
Last Updated: December 20. 2008 4:29PM UAE / GMT
The estate agents Engel and Volkers held a cut-price home sale in Dubai, but report that not one property changed hands. Courtesy Engel and Volkers
A Dubai-based estate agent slashed millions of dirhams from the value of homes in a 12-hour sell-off, but not one of the properties changed hands.
Last week, the Marina franchise of the international estate agency Engel and Volkers held what it called “the largest discounted sale of completed properties in Dubai” to breathe some life into its local business.
But the result was a sign of just how far the property market has reversed since the summer.
More than 150 homes in some of Dubai’s most exclusive addresses, including Emirates Hills, The Marina and the Palm Jumeirah, had a combined Dh175 million (US$48m) knocked off their original listing prices.
The company said it made contact with dozens of potential clients, many of whom indicated they would attend similar sell-offs in the future, but failed to sell any properties during the event.
“It was unfortunate, but it proves just how tough the market is at the moment. A lot of people were scared that prices would drop more,” said Harriet Killen, the office manager of Engel and Volkers’s Marina office, who added that December was traditionally a weak sales month since many residents left the country on holiday.
The situation was in stark contrast to scenes at this summer’s Abu Dhabi Cityscape Exhibition, when hundreds of investors queued for hours in the hope of putting their names down for properties.
“The market has been slow recently so we had to be active in generating some direct sales and some urgency,” said Ms Killen.
The company had urged sellers to drop their prices for a day to stimulate interest among potential buyers, knocking off between Dh500,000 and Dh1m from the prices of many properties.
A large number of the current owners of the discounted properties are making payments on assets that are sinking in value.
Many in their position have sold their homes to ease cash flow problems or to re-invest in other markets.
Most have already witnessed a huge appreciation in their homes since they first bought them and are generally content to take a hit on their margins.
During the event last Saturday, prospective buyers were invited to a 12-hour sell-off starting at 9.30am in which the public could meet the company’s sales and leasing agents. A local mortgage company was also on hand to arrange financing for potential clients.
Obtaining a mortgage is another stumbling block for would-be buyers. Banks and finance houses have tightened their lending criteria as the worldwide credit crisis deepens.
One lender, Amlak, has suspended new loan applications and others are demanding larger deposits.
Estate agents have said the shifting property market might have a positive effect, “cleansing” the business and raising standards in the industry.
There have already been hundreds of redundancies among brokerages and property developers, in some cases predominately support staff.
Quaid Abbas, an executive property consultant at the Sheikh Zayed Road branch of Engel and Volkers, described a typical discounted property as a villa in Arabian Ranches that sold initially for Dh2.5m, reached Dh7m as the market gained, and advertised for Dh6m in today’s market.
“We’re getting more listings than buyers. More people are selling than buying. Buyers are looking for a very good bargain and we cannot always meet their expectations. In their minds they want to buy at less than half of what it was.”
[email protected]
Property bargains fail to sell
Robert Ditcham
Last Updated: December 20. 2008 4:29PM UAE / GMT
The estate agents Engel and Volkers held a cut-price home sale in Dubai, but report that not one property changed hands. Courtesy Engel and Volkers
A Dubai-based estate agent slashed millions of dirhams from the value of homes in a 12-hour sell-off, but not one of the properties changed hands.
Last week, the Marina franchise of the international estate agency Engel and Volkers held what it called “the largest discounted sale of completed properties in Dubai” to breathe some life into its local business.
But the result was a sign of just how far the property market has reversed since the summer.
More than 150 homes in some of Dubai’s most exclusive addresses, including Emirates Hills, The Marina and the Palm Jumeirah, had a combined Dh175 million (US$48m) knocked off their original listing prices.
The company said it made contact with dozens of potential clients, many of whom indicated they would attend similar sell-offs in the future, but failed to sell any properties during the event.
“It was unfortunate, but it proves just how tough the market is at the moment. A lot of people were scared that prices would drop more,” said Harriet Killen, the office manager of Engel and Volkers’s Marina office, who added that December was traditionally a weak sales month since many residents left the country on holiday.
The situation was in stark contrast to scenes at this summer’s Abu Dhabi Cityscape Exhibition, when hundreds of investors queued for hours in the hope of putting their names down for properties.
“The market has been slow recently so we had to be active in generating some direct sales and some urgency,” said Ms Killen.
The company had urged sellers to drop their prices for a day to stimulate interest among potential buyers, knocking off between Dh500,000 and Dh1m from the prices of many properties.
A large number of the current owners of the discounted properties are making payments on assets that are sinking in value.
Many in their position have sold their homes to ease cash flow problems or to re-invest in other markets.
Most have already witnessed a huge appreciation in their homes since they first bought them and are generally content to take a hit on their margins.
During the event last Saturday, prospective buyers were invited to a 12-hour sell-off starting at 9.30am in which the public could meet the company’s sales and leasing agents. A local mortgage company was also on hand to arrange financing for potential clients.
Obtaining a mortgage is another stumbling block for would-be buyers. Banks and finance houses have tightened their lending criteria as the worldwide credit crisis deepens.
One lender, Amlak, has suspended new loan applications and others are demanding larger deposits.
Estate agents have said the shifting property market might have a positive effect, “cleansing” the business and raising standards in the industry.
There have already been hundreds of redundancies among brokerages and property developers, in some cases predominately support staff.
Quaid Abbas, an executive property consultant at the Sheikh Zayed Road branch of Engel and Volkers, described a typical discounted property as a villa in Arabian Ranches that sold initially for Dh2.5m, reached Dh7m as the market gained, and advertised for Dh6m in today’s market.
“We’re getting more listings than buyers. More people are selling than buying. Buyers are looking for a very good bargain and we cannot always meet their expectations. In their minds they want to buy at less than half of what it was.”
[email protected]