Short-term impact of Brexit hits Dubai property market

The short-term impact of the United Kingdom’s vote to leave the European Union has hit Dubai’s property market, according to a new survey.

Local property site propertyfinder.ae said it spoke to several real estate agencies in the emirate regarding the impact of Brexit, with respondents noting two distinct effects being felt in Dubai.

The first was a “small but noticeable” number of UK owners with property for sale in the emirate reducing asking prices to take advantage of the weak pound against the dollar-linked dirham.

While the second has seen a number of UK investors that had expressed interest in the emirate holding back.

Propertyfinder.ae said it recorded an 8 per cent drop in traffic from the UK immediately after the announcement, although this had begun to reverse in recent weeks.

“We always keep close tabs on the performance of the local market, so post-Brexit we have been putting out feelers with the leading agencies to see what the mood is – and they have reported these parallel trends, which were to be expected,” said propertyfinder.ae CCO Lukman Hajje.

“But we would predict that this UK seller/buyer shift is temporary – it is yet to be seen what the true effect of Brexit will be on the Dubai real estate market, indeed we could be in for a few surprises.”

Read: What does Brexit mean for people in the Gulf?

UK citizens were the second largest investors in the Dubai property market last year, with Dhs10bn ($2.72bn) of transactions, according to Dubai Land Department.

Recent reports by real estate agencies have suggested the Dubai market faces challenging conditions following the Brexit vote.

In July, JLL said the devaluation of the British pound may weigh on rental values in the emirate.

Read: Dubai office, residential rents face ‘downward slope’ following Brexit