Dubai buyers try to flip Emaar's Mira homes with 30% premiums

Townhouse buyers who paid less than Dh1 million in a buying frenzy in Dubai on Saturday are already trying to flip them online for more.

People who queued for hours outside Emaar's sales office in the hopes of buying property had to be dispersed by police after huge queues caused chaos. Satish Kumar / The National

Buyers of Emaar town houses that went on sale on Saturday for less than Dh1 million (US$272,272) were already trying to flip them online with premiums of more than 30 per cent.

Three-bedroom town houses in Emaar's Mira development near Arabian Ranches are available for purchase on classifieds website Dubizzle.

A sale of 188 units beginning in the early hours of Saturday morning was mobbed by prospective buyers, many of whom had queued for days to purchase the under-construction properties. At one point, police were called to maintain order at Emaar Square.

The low prices attracted a substantial number of buyers, including many who came from overseas, said Munir Ul Haq, the managing director of OSS Properties in Dubai.

"Dh980,000 was nothing. We'd consider that peanuts in a strong market like just now," he said.

It is unclear when purchasers will be able to resell their properties. Buyers were issued with tokens on Saturday, but contracts that will determine when the town houses can be transferred are expected to be finalised within the next two weeks, an Emaar sales representative said.

As the launch descended into chaos and the queues disintegrated, Mr Ul Huq said his agents, who had arrived in the morning, were able to get to the front of the queue and snap up four properties.

They are currently listed on Dubizzle for Dh1.65m each, representing a potential markup of about 37.5 per cent on the company's purchase price from Emaar of Dh1.2m.

Another ad listed by Appello Real Estate Brokers, which is a registered agent for Emaar, advertises a three-bedroom villa for Dh1.85m.

The marked-up prices were "not that overly exaggerated" and in line with market demand, said Appello's Suki Fraser.

The sales were made on a first-come, first-served basis and limited to one per person.

But that did not prevent individual buyers acquiring multiple properties by getting stand-ins to queue on their behalf.

Few properties sold at the starting price of Dh988,888 each, the brokers said.

The properties are scheduled for handover in 2016.

The demand for new properties follows an increase during the first quarter in sales prices for villas of 17 per cent, compared with a year earlier, according to a report released yesterday by Jones Lang LaSalle.

"The real estate investment market has been very active in the first quarter of 2013, with a growing number of residential transactions closing," the report said.

"While well-established residential communities in central Dubai are expected to see further price and rental growth over the rest of 2013, less completed projects in more remote areas will need more time before seeing increased demand and performance."

The Central Bank attempted to rein in speculation in the property market earlier this year with plans for a cap on mortgages, which were resisted by commercial lenders. The plans remain under discussion after lenders were requested to give feedback to the Central Bank, it said on Saturday.

An Emaar spokesman said on Saturday that the response had been "overwhelming", and the company had put more units on sale.

Would-be buyers who left empty-handed from the property sale said they were critical of Emaar's handling of the event, saying the sales process was "total chaos" and investors were "treated like cattle".

"I went there to try my luck to purchase a villa and was shocked to see no queue, no system, people just standing on the road, elderly, ladies squashed in," said Deepak Sharma, a local businessman who arrived to stand in line with a friend at 3am on Saturday.

Mario Volpi, the head of residential sales and leasing at Clutton's Dubai office, said of the sale: "At the prices quoted, these town houses were literally priced so low that flippers could make 100 per cent profit in a day. And if you were a genuine buyer, imagine the pressure you would be under trying to work out which unit you wanted to buy and where the sun set with 1,000 people outside baying for blood.

"To discourage this sort of thing I really think there should be a tax on speculation."

* with additional reporting by Lucy Barnard