More Properties Set To Go Up For Auction In Dubai
News Posted On: 19 April 2012
The Dubai Land Department is set to auction up to 80 properties later this year, as banks are looking to recoup their losses from homeowners who have defaulted on their mortgages. Last year the property registration agency auctioned 35 homes, and is set to hold another auction this month, and at least another two by the end of the year.
The Dubai Land Department will auction the maximum of five homes per day, and the properties are at a variety of locations including Dubai Marina and Jumeirah Beach Residence. Around 70% of the properties are bank repossessions. Since the economic crisis, prices in Dubai have declined by up to 60% from peak values in 2008 as most speculators have withdrawn from the market, and credit has more or less dried up.
In 2008 the emirate introduced a new repossession law which enables banks to give homeowners who have defaulted 30 days’ notice to begin paying their mortgage before they can issue foreclosure proceedings. Barclays Bank became the first to repossess a property in January 2010, marking the beginning of a spate of repossessions as banks tried to recover $16 billion worth of home loans.
Although property auctions are very new in Dubai, they're likely to become increasingly popular as they are a tried and tested method of disposing of property in other countries. According to the Land Department, Indians were the largest group of first-time buyers in Dubai last year, accounting for 16% of the total transactions. The largest group of European buyers were the British.
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Written by Les Calvert
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