The Brexit vote will ‘delay’ the Dubai housing market’s recovering by six months, UAE daily The National reported, citing property broker JLL.
JLL had previously predicted that the residential market in the UAE would recover soon.
Yet, since the UK’s vote to leave the European Union, the value of the pound has gone down more than 10 percent, making it difficult for British nationals to invest in Dubai property the report added.
British nationals are the third-largest group of foreign investors in Dubai.
“Provided there are no major external shocks over the rest of the year, we expect the Dubai residential market to recover in early 2017," JLL said.
“Even though it is too early to predict the long-term implications, overall there is a slight probability of British investors being negatively affected by the devaluation of the British pound following Britain’s decision to exit the European Union," Craig Plumb, the head of research at JLL’s Dubai office said.
“Expatriates in Dubai are most likely to continue renting their homes instead of switching to ownership, resulting in sales being more negatively affected than the rental sector," he stated.
While property analyst Unitas Consultancy disagreed with JLL and said ‘it did not expect the Brexit decision to affect the Dubai property market.’
Unitas said the value of the pound had not fallen too much over the last year and a half, and that British investors had bought more property over in that time span.
Unitas, which uses Reidin data said: “The total amount of money spent by British buyers of Dubai property had increased to Dh10.8 billion last year – or 8.6 per cent of total transactions – from Dh5bn in 2012, or 3 per cent of total transactions.”
Unitas said: “The effect of the Brexit event will be played out over the next few years on a global stage that will continue to push markets in unexpected ways.
“However, the fear of a weakening currency and its effect on foreign property markets is likely exaggerated and in point of fact, there might well be a positive effect on markets such as Dubai, as foreign flows continue to gather pace, especially in light of the ensuing uncertainty that has been created as a result of the referendum."SHOW MORE