Built to inform

Sign up for the daily newsletters

No, Thank you

Brexit to impact UK investments in UAE real estate

Despite the pound's sharp decline following the UK's exit, industry experts expect the impact to be short-lived and unlikely to affect prices

Brexit likely to impact UK investments in UAE real estate in the 'short-term'.
Brexit likely to impact UK investments in UAE real estate in the 'short-term'.

The UAE real estate market is likely to face an immediate decline in UK investments following Britain's decision to exit the European Union (EU).

Despite the pound's sharp decline since the result, industry experts expect the impact to be short-lived and unlikely to affect prices.

Decaln McNaughton, MD UAE, Chestertons MENA, was quoted by Zawya Projects, as saying: "In the short term, the weakening of the pound means it is more expensive for UK investors to purchase property and therefore people may decide to hold off on investing."

The drop in the volume of investors from the UK is unlikely to affect UAE property sales overall due to significant interest from other countries in the region, McNaughton added.

He said: "We don't expect this to have serious implications on the real estate industry in the UAE as the market is still buoyant with Middle East investors, particularly those with funds to purchase."

Last week, real estate consultancy Cluttons said said that for those invested in the property market from the Gulf, the deterioration in the value of sterling overnight will have erased any gains in recent years, whose currencies retain a fixed peg to the US dollar.

Faisal Durrani, head of research at Cluttons, said: "Any US dollar or UAE dirham investors will find the price of an average prime Central London residential asset $96,000 (AED350,000) less than it was on 20 June.

"Conversely of course, London residential property is now $96,000 cheaper for international buyers looking to enter the market.

He also added: “A silver lining is that those from the Gulf eyeing up a London residential asset will find it 31% cheaper than it was during the last market peak in Q3 2007, suggesting that we may be on the cusp of seeing a significant resumption in property investment activity in the British capital, particularly as global investors seek out safe haven assets such as gold and London’s bricks and mortar, which we expect will retain its appeal.

“The longer term implications are too early to assess, but we may start to see the unlocking of London’s stalled residential property market, with investors both exiting and entering the market as we head towards a period of demand volatility.”

 

 

Most popular

Awards

New category open for consultancies at CW Awards 2019 in Dubai
Sub-Consultancy of the Year to be crowned for the first time at the gala ceremony

Conferences

Leaders UAE 2019: Pinsent Masons confirmed as Gold Sponsor
Law firm is among the major construction industry players confirmed as sponsors for Leaders UAE's
Leaders in Construction UAE Summit returns in Sept 2019
Dubai conference to see top officials discuss the people, trends, and challenges that will power

Latest Issue

Construction Week - Issue 746
Jul 20, 2019