By Shane McGinley
Several units put on sale at record prices; experts says sellers want to inflate market
Apartment sellers in the Armani Residences have listed a number of two bed room units for AED30m ($8.1m) each.
Several units were put on sale in the past week, and the prices equate to AED13,500 ($3675) per square foot – nearly 20% higher than during the peak of the property boom in Dubai.
The residences are managed and furnished by the Armani Hotel, within the Burj Khalifa, the world’s tallest tower.
The news comes just days after Arabian Business reported sale prices on the luxury Palm Jumeirah development have sunk to a four-year low, with apartments being offered for as little as AED650 ($176) per sq ft.
In October last year, real estate consultancy Colliers International reported the Burj Khalifa’s 144 luxury Armani Residences were valued at AED4-5,000 per sq ft; at their minimum, almost double the AED2,800 per sq ft commanded by the remainder of the skyscraper’s 900 apartments.
In 2008, before the property crash, Colliers reported that Armani units in the tower were valued at around AED11,000 per square foot.
However, agents contacted by Arabian Business suggested the extravagant sale prices may be an attempt to “boost” the flagging property market.
One agent said: “A lot of properties have been listed recently and generally around AED29m to AED31m for a 2 bed. However, even overseas investors from Russia and Iran are unlikely to pay more than AED15m, what is more likely going on is a number of owners are now trying to artificially lift the market.”
The agents are correct, no savvy investor is going to invest in an apartment at a price that will immediately put them in massive negative equity.
To be honest even AED 15 million might not be that appealing from a Russian investor perspective, given that Russia's government has just had to bail out a Moscow Bank to the tune of $17 billion, the biggest rescue in Russian banking history.
There is no way that you can artificially prop up the market for a particular branded apartment series, it is only worth what a buyer is prepared to pay for it.
Wow!...thats a steal...i am going to Q up at $ am tomorow morning....i hope there is something left for me...
If it sells, good on him.
PLEASE keep us updated if there is a sale?
Good luck to Iranian & Russian. No one in their right mind pay their hard earn cash. UAE has rigid immigration and business rules. This makes it difficult for people to immigrate and make UAE their home.
this is a marketing tactic. if you have 10 apt to sell. you will peg the prices high for 2 of them so that becomes like the new benchmark, slowly there will be more out there, which will be pegged at 30% less than that price. Which to the new buyer will seem like a steal. These tactics don't work any more. Try something new.
And I want world peace....ain't happening.
I am very sure that by Sunday morning there will be no flats left.. Thats the way the agents and owners operate in dubai.. has been going on since the last 5 years.
The local filling stations can't supply gasoline because they ran out of money, but let's buy a $30 million TWO (TWO!!!!) bedroom apartment in Dubai. Delusional, that's what the Real Estate agent are. And if somebody buys it at that price the authorities should check the provenance of the money.....because it can only be stolen. One can buy a massive villa in the nicest spots on earth for this type of money.
Yes, as some people has pointed this is an attempt to create an anchoring price for future sales.
Quite crude, quite obvious, but quite effective as many people will read just the headline. Cheaper than other forms of advertising and as (in)effective as them. Overall not a bad choice.
A 12 year old bought 40 million $ worth of properties over the last few years in Dubai. He is the son of the President of Azerbaijan, a country where poverty and unemployment exists widely and where the Presidents salary is less than 300,000 US$ a year. Similarly many Afghan govt officials have bought villas on Palm Jumeirah by diverting aid money.