On 12 June a Mazad auction held in Dubai's Burj Al Arab hotel fetched Dhs250m ($68.1m) in the space of just two hours.
The auction, attended by 250 potential investors – and accessible by invite only – was a far cry from the weeks of back and forth negotiation more usual to the region.
In Saudi Arabia too the trend for auctioning off real estate projects has taken off.
One property auction in the kingdom last month netted $1bn of projects in a matter of hours.
'Auctions, or a Mazad, allow purchasers to make smart investments where the buyers determine the purchase price through live bidding, eliminating the tedious negotiation process,' says Saeed Bushalat, CEO of Salwan, the company which oversees Mazad.
Since its creation in 2005 the company has overseen four auctions, raising over Dhs2bn ($545m) in sales.
'The real market price, the fair price is the benefit for everybody,' Piaras Moriarty, Vice President of Sales at IFA Hotels and Resorts, told AME Info's Phil Blizzard in an exclusive interview
on the group's upcoming auction.
Auctions work for everybody
'It works well from everybody's point of view; the developer, the consumer, the investor. It's been done a number of times in Dubai and it's always been a great success.'
IFA Hotels and Resorts are currently planning the auction of the first commercial freehold office units on Dubai's Palm Jumeirah project.
The company are auctioning 20 lots, equal to 200,000sqft, of office space spread across four blocks. In addition, 13 penthouses which didn't sell initially are being put up for bidding.
'We took them back off the market and now we're offering them to the public,' says Moriarty.
Although the auction will be 'public', it is not open to all. As with the other property auctions already undertaken, only a select group of potential investors will be able to take part.
Criteria for qualification
Rather than being held on an invitation-only selection, as with the Mazad event, this has been advertised.
The sum needed to qualify for selection does mean that timewasters are unlikely to be present to slow the proceedings down.
'People come and register. Potential bidders are then shown around the properties so they know what it's all about,' says Moriarty. 'And they have to pay a Dhs100,000 refundable deposit to be a part of the auction.'
The question for those not yet involved in the latest selling tool to hit the Dubai property market is whether auctions will further inflate the prices of new real estate developments.
When push comes to shove, the nature of directly bidding against a competitor may see the final price of projects being pushed far beyond what could be categorised as the average market value.
If this were the case it would, in effect, nullify the reasoning behind initiatives such as the Real Estate Regulatory Authority's upcoming price index – which is meant as a guide for those looking to purchase property.
Moriarty disagrees that prices may be inflated, arguing that asserting a property's true market value is the principal reason for auctions: 'Frankly, we weren't sure what price to list at. It's such a unique space; if we listed at X would it be under or over the market value? So we figured: Fill the room with bidders and let the best one take it.'See also:Watch: Property Talk: The best deals in the GulfAbu Dhabi property price increases 'certain'