The price of the cheapest apartments in Dubai's Burj Khalifa has soared to nearly AED5,000 ($1,400) per sqft, according to new research by Arabian Business.
Based on listed sale prices, the lowest-priced residential unit in the world’s tallest building is on sale for AED2.7m – equating to AED4,945 per sqft.
“With prices increasing in Dubai, people will be forced out the market. More people will look to rent in the other emirates like Abu Dhabi and Sharjah,” said Craig Plumb, head of MENA research at real estate services firm Jones Lang LaSalle.
Research published last week by international real estate consultancy Cluttons has found that residential units at the Burj Khalifa have risen in price by13.6 percent since units were first handed over in January 2010. The value of apartments in the Emaar-built skyscraper reached a high of AED9,000 per sqft in August 2008 before dipping to a low of AED2,500 per sqft in February 2009.
“Prices have increased too fast in 2013. 2014 will see a slowdown in the level of increase,” added Plumb.
Since off-plan residential units were first sold for the development in July 2006, overall values have risen by 87.5 percent. Across Dubai, according to Cluttons, average property prices currently stand at AED 1,359 per sqft.
Steve Morgan, head of Cluttons Middle East, said: “Looking back at market data prior to the economic downturn, there have been fluctuations in apartment values at the Burj Khalifa each quarter since its launch. They were up a staggering 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.
Research by Arabian Business has shown that elsewhere in the emirate, even traditionally lower-priced areas have seen prices surge.
The cheapest studio flat in Nakheels' International City, seen as one of Dubai's less desirable developments, is AED810 per sqft, selling at AED320,000.
In Silicon Oasis, the lowest-priced studio is AED380,000 – or AED957 per sqft.
In Motor City, a complex closer to the centre of Dubai, the lowest-priced studio is AED600,000 – which equates to AED986 per sqft.
However, the emirate’s more prestigious areas have no apartments for sale at below AED1,500 per sqft. For example, the cheapest studio apartment in Downtown Dubai is selling for AED 830,000 which is AED1,704 per sqft. Studio apartments on the artificial peninsula Palm Jumeirah are selling for AED1,320,000, or AED2,315 per sqft.
Last week, property indexing website REIDIN.com reported that property prices in Dubai have risen by more than 22 percent in 2013. The report found that apartment prices rose by 2.9 percent on a monthly basis. In November, real estate values rose by 2.44 percent, according to REIDIN.com.