Foreign buyers seek Dubai dream
A number of Dubai property brokers were holding auctions this time last year as they tried to find novel ways of selling homes in a market where serious buyers had grown scarce. Among them were Sherwoods and Madania Real Estate, which between them held four auctions last summer.
But while the auctions were well-attended and bids were placed, only a couple of sales were made and so the plan never really got off the ground. So much so, Madania, a unit of Al Tamimi Investments, closed down earlier this year. The property downturn was too much for the company to bare. Selling a property in Dubai was never a problem in the boom years when buyers from all around the world queued for hours outside sales offices and eager agents left their calling cards under every available door and on every car windscreen.
But even the auctions, where properties were being sold for a fraction of their original price, eventually failed to arouse much interest. At the time, Iseeb Rehman, a director at Sherwoods, accepted that "people will buy when they're ready to buy". Still, the firms were instead able to use the events as a test for what the market was willing to support and the price people were prepared to pay. The auctions also helped to gauge where investors who still saw Dubai as a good prospect were coming from.
Potential buyers from India, Pakistan and Russia eagerly filled the auction halls. Little has changed since among buyer demographics, experts say. Recent sales transactions by Landmark Properties suggest the strongest demand is coming from Iran, Pakistan, India and eastern Europe. "Broadly speaking, this has been a fairly steady trend almost since the Dubai property market opened to buyers outside of the GCC," said Jesse Downs, the company's director of research and advisory services.
Other agents says demand among people from the UK, another huge market for Dubai during the boom, is starting to resurface. Greg Antioch, a sales negotiator at Cluttons, recently sold a three-bedroom villa in The Springs, a sought-after community development by Emaar Properties, to a British couple. "It's mainly people looking to upgrade," he saids. "They were already living in The Springs but decided to buy because the price is so low at the moment. They thought: 'Why am I wasting money on rent when I can actually afford to buy'?"
The ongoing decline in prices is attracting investors. The couple, who had pre-approved finance, bought their new home for Dh2.15 million (US$585,000). It would have cost them Dh2.5m just a few months ago, and Dh3.2m at the peak in the middle of 2008. Mr Antioch has also sold homes at The Springs and The Lakes, another Emaar development, to families from Iran and India. "I would say most of the buyers are now coming from the UK, Iran and India," he said.
While there are a few buyers out there, the reality is that most people are still jittery about Dubai's property sector. Dilip Daswani, from India, is the director of Capitol Real Estate, a Dubai brokerage that deals mainly with rental property. He is also a seasoned investor. Mr Dawani owns a villa in Arabian Ranches and two apartments in Downtown Burj Khalifa, which he rents out. He also has an apartment in Burj Khalifa, the tallest tower in the world, which he plans to sell when the property is handed over to him.
Right now, he is waiting before he buys more property. "At the moment, things are very cheap, but the money is still a bit of a problem and banks are still not lending properly," he said. "But if I was to buy now, I would buy a villa in either Jumeirah Islands or Emirates Hills, or a flat in Old Town [Downtown Burj Khalifa]." @Email:firstname.lastname@example.org
Published: May 30, 2010 04:00 AM