Prices of apartments in Burj Khalifa, the tallest tower in the world, are showing signs of a “resurgence” with asking rates increasing by nine to 12 per cent in the first quarter of 2012 compared to fourth quarter 2011.
“Sale prices have increased in the first quarter of this year, as compared to the fourth quarter last year,” said Parvees Gafur, Chief Executive Officer, PropSquare Real Estate, a Dubai-based real estate consultancy.
Depending on the views whether they are Lake & Fountain views or Sea and Sheikh Zayed Road, the asking prices are between Dh2,850 and Dh3,600 per sqft compared to between Dh2,600 and Dh3,200 per sqft last quarter.
“The general trend is upward. Rentals have had a nominal increase only.
“There are one-off cases of selling at lower rates, for a less desirable unit, but they are not market oriented.”
Manish Khatri, Vice-President, Business Development & Investments, SPF Realty, says: “If you look at the figures you will see more of a stability on prices from units with a view going up and units with no great view sliding, but overall there has been a stable price point across the board on the Burj Khalifa.
“The overall price in the Downtown area has gone up which is due to the fact of low stock.”
Units, currently, listed on propertyfinder.ae are high as Dh3,500 per sqft while lowest price is Dh2,500 sqft.
Gafur says prices increases are part of general property cycle dynamics.
“You have a set of clients having sold at a certain price bracket. Now that phase being over, the next lot is selling at the new price predictions.”
He adds: “It’s a global address where investors are now convinced that today’s prices are reasonable for the product and facilities that comes with it.”
In 2011, the largest residential real estate transaction in Dubai was registered in Burj Khalifa with the price topping Dh28 million, according to Reidin.com.
The 11,355 sqft space was sold for Dh28.15 million, or Dh2,479 per sqft, in October 2011.
The second largest transaction was again in the same tower for a Dh7,910 sqft unit, which was sold for Dh28 million.
Should owners sell or lease?
Gafur says it was depends on the nature of the seller.
“At current prices, there are buyers. So most of the times it has been sales that have been suggested. On rentals clients agree that these are 'trophy' investments.The rentals returns could cover up their service charges to certain extent, so owners don’t really get motivated with it,” he says.
Emirates 24|7 reported in March that owners of residential units have to shell out Dh55.01 per sqft in 2012 compared to Dh55 per sqft in 2011 and Dh52.77 per sqft in 2010.
In March, Donald Trump said he was quite “jealous” of the UAE’s achievements that include the world’s tallest tower – the Burj Khalifa.
The 2,717-feet high tower has 900 studio, one, two, three and four bedroom, while the Armani Residences has 144 fully furnished private apartments.
It offers luxurious recreational and leisure facilities including four swimming pools, an exclusive residents’ lounge; health and wellness facilities; At.mosphere, the world’s highest fine dining restaurant at level 122 and At the Top, the world’s highest observatory deck with an outdoor terrace on level 124.