Burj Khalifa Residential Values Show 'Sustainable Growth'

Burj Khalifa Residential Values Show 'Sustainable Growth'

Residential News » Middle East and Africa Residential News Edition | By WPJ Staff | December 30, 2013 9:20 AM ET

Almost four years after its completion, residential values in the world's tallest building, the Burj Khalifa, are proof of sustainable market growth, according to consulting firm Cluttons. 

Since 2010, values in the Dubai building have grown 13.6 percent, and a whopping 87.5 percent since units first launched in 2006. 

Throughout the city, more and more buy-to-lease investors, both domestic and international, combined with an increasing number of owner occupiers, are helping to sustain the steady growth in the market, according to Cluttons. Buyers are fueled by affordable mortgage rates and enhanced property regulation. 

Over the past four years, the value of apartments in the Burj Khalifa has endured a roller coaster of price fluctuations. Values reached a high of AED 9,000 per square foot in August 2008, before dropping to a low of AED 2,500 per square foot in February 2009, Cluttons found. The calculations made by Cluttons does not include the Armani apartments in the Burj Khalifa. 

Since sales for units in the building began in 2006, values were up 44 percent in the second quarter of 2008.

"In 2013, prices for apartments in the tower have risen by 25 percent, which has been supported in part by continued optimism surrounding Dubai's economic buoyancy and also by on-going growth in investor interest in our city's real estate market," Steve Morgan, head of Cluttons Middle East said in the report. "Furthermore, residential value performance in the Burj Khalifa mirrors the performance of Dubai's broader residential landscape."

Currently, apartment values in the tower stand at AED 3,750 per square foot, which is 50 percent higher than in 2009, Cluttons reports. Across Dubai, average property prices are AED 1,359 per square foot. 

A separate report from Cluttons found average capital values of Dubai residential property increased by 53 percent during the third quarter, compared to last year. 

According to a global forecast from Knight Frank last week, Dubai's prime residential property is expected to record the world's highest growth in prices in 2014.

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