As the world-famous Burj Khalifa marks its 14th anniversary, significant changes occur in the Dubai real estate market. A recent analysis by global property consultant Knight Frank reveals that the number of homes available for sale near the Burj Khalifa witnessed a 52% decline throughout 2023, signalling a shift in investor sentiment.
Rising Demand Amidst Falling Inventory
Despite the decrease in available homes, the total number of deals within the Burj Khalifa during 2023 experienced a remarkable 22% surge, reaching 117 sales. Knight Frank’s analysis suggests that the world’s tallest building continues to attract strong demand, mirroring the broader trends in Dubai’s real estate market.
Burj Khalifa’s Contribution to Downtown Dubai
The Burj Khalifa contributed significantly to Downtown Dubai’s real estate landscape in 2023, with 117 apartment and branded residence sales totalling over $288.6 million (AED 1.06 billion). This accounted for 7% of all sales in Downtown Dubai, which amounted to an impressive $3.97 billion (AED 14.6 billion).
Long-term Investors Taking Center Stage
Faisal Durrani, head of research at Knight Frank’s MENA division, noted that Dubai’s emergence as a second home hub and the world’s busiest market for homes priced at $10 million or more has attracted a wave of international buyers. This influx of demand has driven a 38% increase in average city-wide prices since March 2021. The Burj Khalifa has outperformed the rest of the city, with prices surging by 55.4% over the same period.
Durrani emphasized that Dubai’s property market is still evolving. Still, the 52% decline in available homes for sale underscores the city’s repositioning as a hub for second-home buyers and genuine end users.
Sustaining Price Growth
The trend of homeowners holding onto their properties for longer periods has helped sustain price growth in the Burj Khalifa. The most expensive home sold in 2023 traded for 140% more than in 2022. Knight Frank’s analysis also revealed that the most expensive apartment sold this year in the Burj Khalifa was priced at $1,321 (AED 4,852) per square foot, representing a 20% increase compared to the priciest sale in 2022.
Burj Khalifa’s Historical Impact
Since its grand opening 14 years ago, the Burj Khalifa has accounted for $2.66 billion (AED 9.8 billion) in home sales, constituting 8% of the total value of all sales in Downtown Dubai since 2010.
Dubai’s Prime Residential Market
Beyond the Burj Khalifa, prime residential values in Dubai, including neighbourhoods like Palm Jumeirah, Emirates Hills, and Jumeirah Bay Island, experienced record growth in 2023. Knight Frank’s 2024 global prime residential markets forecast ranked Dubai in third place, with a 5% increase, following an estimated 16% rise in prime residential prices in 2023.
However, despite this growth, prime prices in Dubai remain relatively affordable at approximately $1,018 (AED 3,740) per square foot, making it one of the world’s “affordable” luxury home markets.
High Demand in Downtown Dubai
While Downtown Dubai may not be classified as a prime neighbourhood by Knight Frank, it registered four home sales above the exclusive $10 million mark in 2023, two of which were in Emaar’s The Address Residence Sky Views. Will McKintosh, head of Knight Frank’s MENA residential section, highlighted that Downtown Dubai is the most sought-after location for residential real estate in Dubai among international high-net-worth individuals.
Growth in Business Bay and DIFC
Branded residential operators offering unique homes are clustering in Business Bay, further enhancing Dubai’s status as the city with the highest concentration of branded residential operators. The DIFC (Dubai International Financial Centre) is also experiencing record levels of demand, with the recent launch of the DIFC Living project, which saw all 164 homes sold out in minutes.
