Strong demand for upscale property causes a 23% spike in apartment prices in Burj Khalifa

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The luxury property sector in Dubai was thriving in 2021, with 54 upscale properties sold in the first 9 months of last year. Given the fact that the city, along with the entire UAE, remains one of, if not the safest destination in the world, even with the COVID-19 pandemic, it is not surprising that HNWIs and UHNWIs choose Dubai for living and investing in. As the property market rebounded from the economic downturn, the Burj Khalifa apartments registered a whopping 23% increase, compared to 8% across other Dubai areas, according to Knight Frank. Having turned 14 years old this week, the tallest building in the world holds the record for the highest price per sq. ft ever set for a residential property in the Emirate, at AED 14.6K (USD 3.9K) for an Armani-branded 2-bedroom apartment. With a current price per sq. ft. of AED 2.1K (USD 571), the Burj Khalifa recorded a total of AED 317M (USD 86.3M) in property sales in 2021, as reported by Knight Frank. That being said, Downtown Dubai, where the Burj Khalifa is located, witnessed a price growth of more than 17%, which is attributed to the availability of major amenities and the short-term rental demand in this area.

Meanwhile, Business Bay, which will become the main financial hub in the city, along with Downtown Dubai, as per the 2040 Urban Master Plan, remains one of the best areas to purchase property in Dubai. As the latest DLD data shows, this area sealed 5,687 deals in 2021, following the ever-popular Dubai Marina with a total of 7,968 transactions. The area of Business Bay, last year saw the launch of one of the largest developments called Peninsula. The waterfront project was created by Select Group on a total area of 3.3 million sq. ft and offers studios, 1-2 bedroom apartments and a range of simplexes. To date, the master developer has released 2 phases: Peninsula One and Peninsula Two, which witnessed a tremendous response among investors and end-users. On 5 January 2022, it was reported that Select Group awarded a contract worth AED 629M (USD 171.3M) to China State Construction Engineering Corporation Middle East to build the Peninsula project. That being said, the main construction works of the first phase are scheduled to start in the first quarter of this year, while the entire Peninsula project is due for completion in Q4 2024.

It is worth noting that the property boom in Dubai is expected to continue throughout 2022. As reported by the DLD, during the period of 1-6 January the real estate sector has already seen a total of 1,298 transactions worth AED 2.99B (USD 814M) in sales. The top 5 performing areas are Sobha Hartland, Business Bay, Arjan, Dubai Harbour and the Burj Khalifa. In order to support the growth of the Dubai real estate sector and encourage Emirati’s to construct their own homes, Sheikh Hamdan bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of Dubai Executive Council, approved a total of 600 housing loans worth AED 600M (USD 163.3M) on 3 January 2022. As well as the above, the loan amount for UAE nationals was increased to AED 1M (USD 272K) and the repayment period was extended to 25 years.

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