Dubai to auction foreclosed homes soon
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Dubai is expected to start auctions within a month of foreclosed homes in the sheikdom, where the property bubble burst in late 2008, local newspapers reported Thursday.
Jody Waugh, a partner at the law firm Al Tamimi and Company, told The National that he was handling as many as 70 foreclosure cases from 12 different banks.
"The first public auction should happen shortly," Waugh was quoted as saying, adding that his team had secured 10 judgments from the courts on foreclosed property.
Hundreds of buyers had received cancellation notices from the Dubai Land Department on behalf of developers who claimed that they were in default of their obligations, he said.
According to Dubai-based daily Emirates Business 24/7, Waugh said the first public auction could be held in a month's time.
"We have received the first evaluation from the Dubai Land Department on a property that will be publicly auctioned," he told the newspaper. "It is an official evaluation from the Land Department. So, I believe we are close to our first public auction under the mortgage law."
During the property boom years, many developers depended on the off-plan model, which analysts say fuels speculative buying and inflates prices since the property is sold before building work starts to provide finance for construction.
As the global financial crisis hit the region and property prices fell more than 50 percent in Dubai, many buyers reportedly stopped paying their monthly installments on properties that had fallen sharply in value.
In late April, The National reported that the Dubai Land Department may seize off-plan properties if owners are in default on payments.
Seized properties will be auctioned by the department, with the funds going to the developer unless the sales generate a surplus, which will be passed on to the original buyers, according to the paper.
