Click here to spend $1 million
Published: Thursday, January 25, 2007 at 6:01 a.m.
Last Modified: Thursday, January 25, 2007 at 12:00 a.m.
DUBAI, United Arab Emirates — Call it a million-dollar impulse purchase.
Ahmed Goheer, 31, was checking e-mail before bed this month when he read a message saying a Web site was selling luxury apartments in this Arab Gulf boomtown.
So Goheer, a vice president at an investment bank here, clicked.
On the site, Simsari.com, two apartments in a nearly finished high-rise caught his eye. Goheer looked over the floor plans and did some calculations. Still in his pajamas, the Pakistani banker jumped in his Range Rover and drove past the tower under construction, just to make sure it existed. Then he returned to his computer and clicked "buy now." In an instant, Goheer agreed to spend just over $1 million for two apartments.
On the same site, Goheer arranged for a loan from local mortgage company, Tamweel, which took his personal information and gave him provisional approval. Goheer sealed the deal just after midnight by leaving a $2,700 deposit with his credit card.
"There was no sense waiting. I bought it that night," Goheer said, giving a tour of the Dubai Marina neighborhood of residential skyscrapers which houses his still-unfinished apartments.
The Internet has long been a stronghold of the real estate business. But most real estate sites only show listings and require would-be buyers to phone an agent. The auction site eBay offers houses to buyers for cash or who can arrange financing.
Dubai government-owned Simsari, which means "my agent" in Arabic, allows buyers to go much further in cyberspace — but still not all the way. The site appears to be the first that allows buyers to arrange mortgages online and make credit card deposits on their properties. The process moves off-line in the final stages, when buyers have to show up in person to sign and hand over documents.
In December, Simsari's innovations caught the eye of Google chief executive Eric Schmidt, said Omar Hijazi, who oversees the site as chief executive of Tamweel, a Dubai government holding company.
"He told me 'We know about you,'Ê" said Hijazi, who met Schmidt at a Dubai convention. "I don't know whether that's good news or bad news."
It may signal interest in a takeover: Google has launched a beta version of its own real estate sales site, Google Base. Google representatives did not respond to requests for comment.
Selling property online might not make sense in markets where a buyer wants to see the neighborhood and inspect the house. But in Dubai's high-octane market, apartments are often sold from architect's renderings in neighborhoods that won't exist for years. Buyers are often investors living in Europe, Asia or elsewhere in the Mideast.
"There's nothing physical to show them anyway," Hijazi said with a smile.
That kind of market is tailored to the Internet, Hijazi said in an interview in an office overlooking the palm-fringed Persian Gulf.
As of this week, Simsari, which is still in pre-launch mode, had sold four properties and was finalizing 20 more where mortgages had been approved online, Hijazi said. Properties for sale on the site range from a $20 million, 80-unit apartment building ready by 2009, to an existing studio apartment in a mid-income complex for $89,600.
For those who insist on seeing the construction site, Simsari offers satellite imagery that gives views of neighboring homes and their backyard swimming pools.
Incentives to buy online include Simsari's half-percent commission — lower than Dubai's usual 2 percent sales charge — and the occasional chance to get in on a pre-launch offer.
Whether it's smart to spend $500,000 on an apartment in Dubai — rather than in, say, London or New York — is another matter. Steve Brice, head of research at Standard Chartered Bank in Dubai, said the local market is overheated and nearing the peak of a boom that started in 2002 when foreigners were given permission to buy.
Skyrocketing prices that doubled over three years have slowed. Apartment prices jumped 10 percent in 2005 and home prices jumped 30 percent, Brice said. He believes housing prices will stabilize or start falling by summer, when dozens of 30- and 40-story apartment towers in the Dubai Marina neighborhood will be complete.
"At some point soon we're going to see the scales tip in favor of excess supply," Brice said. "If you're prepared to buy and hold for the long haul, it's not a bad purchase."
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