Dubai to auction off foreclosures

Tuesday, April 10, 2012

Dubai to auction off foreclosures

The Dubai Land Department is set to auction off up to 80 foreclosed homes this year in an effort to recover losses on non-performing loans.

The properties, 70% of which have been repossessed by banks, are in several locations across Dubai including upmarket Dubai Marina and Jumeirah Beach Residence.

The Emirate has been hit hard by the global economic crisis and has seen prices tumble by up to 60% from their peak. As a result Dubai has had to introduce a repossession law in 2008, under which Dubai banks were authorised to give defaulting homeowners 30 days' notice to resume mortgage payments before beginning foreclosure proceedings.

'We expect to auction 30 to 35 properties in April, we have a maximum of five per day,' said DLD's Humaid Omran Al Shamsi.

Real estate auctions are still in their infancy in Dubai but could prove popular, according to Richard Paul, head of residential valuations at property consultant Cluttons.

'It's a very new market and it's not particularly tested. That said it works in a huge amount of countries all over the world very successfully and it's another way of disposing of property. I see it growing with more and more properties coming onto the market this way,' he explained.

The British are the largest European group of buyers in Dubai.

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A Place In The Sun