- City Fajr Shuruq Duhr Asr Magrib Isha
- Dubai 05:23 06:36 12:34 15:53 18:25 19:39
The total value of residential sales at the Burj Khalifa rose by 16% during 2022, according to the latest analysis carried out by global property consultant Knight Frank to mark the 13th anniversary of Dubai’s sky-piercing 828-meter-tall tower.
Knight Frank says the world’s tallest building continues to enjoy robust demand, mirroring the rest of Dubai. Indeed, with 94 apartment sales in 2022, totaling over AED 477 million, the Burj Khalifa accounted for 3% of all sales in Downtown, which amounted to AED 15.6 billion.
As has been the case for the last 18-24 months, house prices in Dubai’s most exclusive neighborhoods have experienced the strongest growth, and apartments in Downtown rank third in the city for 2022, recording an average increase of 16.7%, just behind the Palm Jumeirah (17.3%) and Dubai Hills (19%).
Faisal Durrani, Partner - Head of Middle East Research, Knight Frank, explained: “What’s impressive about the Burj Khalifa is that since opening 13 years ago, the tower has accounted for AED 7.9 billion of home sales, or 7% of the value of all sales in Downtown and 0.25% of all homes sold in Dubai since 2010.
Separately, our analysis shows that apartments in Downtown have seen prices increase by 27.6% since the onset of the pandemic, making it the second-best performing submarket in the city behind the Palm Jumeirah (36.6%). High-end homes in completed communities remain highly sought after amongst both second-home buyers and buy-to-let investors. For the latter, with apartment yields standing at c. 6%, Dubai remains one of the world’s most attractive residential investment markets, albeit the overwhelming majority of buyers in this property cycle appear to be second-home, or holiday-home hunters, rather than speculative purchasers.”
Prime residential values in Dubai, which encompass the neighborhoods of the Palm Jumeirah, Emirates Hills and Jumeirah Bay Island, have experienced record growth during 2022, albeit this has been from a low base, Knight Frank says. Furthermore, Knight Frank’s 2023 global prime residential markets forecast positions Dubai in first place at 13.5%. This comes hot on the heels of an estimated 50% rise in prime residential prices in 2022.
Despite this, prime prices stand at approximately AED 3,200 per square foot, or around US$ 850 per square foot, making Dubai one of the world’s most ‘affordable’ luxury homes markets. The most expensive apartment sold at the Burj Khalifa in 2022 transacted for around AED 4,000 per square foot (c. US$ 1,100 per square foot).
Durrani added, “The persistent upward trajectory in home values in Dubai against a backdrop of unimpressive global macroeconomic indicators clearly shines a spotlight on the relative resilience and outperformance of the emirate’s residential market. We have assessed a range of property market KPIs, including Dubai’s relative affordability for domestic buyers. And despite the substantive residential price growth over the last 18 months, submarkets like Downtown Dubai remain squarely in the ‘affordable’ bracket, with average apartment prices averaging around six times annual household incomes. A reading of over six usually begins to signal growing affordability issues.
“There are of course a range of downside risks we are closely monitoring ranging from contagion linked to global economic malaise, rising mortgage costs as interest rates climb and the impact of the strong dollar to which the UAE dirham retains a fixed peg. For now, the key driver of our outlook for the prime market is linked to the shortage of luxury homes in the pipeline.”
Knight Frank also references the global appeal of Downtown Dubai and the Burj Khalifa as a reason for its continued strong price growth.
Andrew Cummings, Partner - Head of Prime Residential, Knight Frank, said: “Despite the city’s continuing expansion, the Burj Khalifa remains a focal point for global real estate investors and end users alike. The iconic view of the Burj is something that attracts not just holiday makers, but residents who want to own or rent the most premium properties. Downtown properties have increased in value by nearly 30% in the last 12 months and as we move into 2023, we are going to see further interest in some of the newer buildings such as Il Primo, Grande and more”.
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