Real estate consulting firm, JLL, has released its 2017 Investment Review of the South African property market with analysis highlighting a decline in overall capital invested (excluding new developments) to R13.3 billion from R28.7 billion in 2016. The report reviews investment activity in the South African commercial real

Brexit Affect Begins To Be Felt in Dubai

The UK has already been feeling the heat of its vote to leave the European Union. Earlier this month London woke up to the news that the forecasters at EY Item Club have indicated that the UK will have to pay quite a bigger price than predicted or assumed so far by any analyst.

Item Club has cut its growth forecast from 2.3 per cent to 1.9 per cent for 2016, and from 2.6 per cent to just 0.4 per cent for 2017 saying the Brexit will have severe confidence effects on spending and business investment.

The effects, meanwhile, have started to be felt nearly five thousand miles away in Dubai, as new reports suggest.

Real estate consultancy JLL recently suggested that rent values in Dubai’s office and residential sectors witnessed a downward slope in the second quarter as Brexit brought slight uncertainty into the market.

In its Dubai Real Estate Q2 Overview report, which evaluates the impact of Britain’s exit from the EU on the emirate’s real estate market across office, residential, retail and hotel sectors, the consultancy said the decision has seen an adverse effect on the retail and hotel sector. Due to the devaluation of GBP, Dubai and the MENA region as a whole has become an increasingly expensive destination for European visitors, it noted.

Also this month, real estate portal Propertyfinder revealed that just 30 per cent of the residents have owned properties in the UAE while a staggering 70 per cent, half of whom have lived in the here for at least five years, continue to rent citing affordability concerns.

Propertyfinder believe that Brexit will mean that British expats will be even further enticed to stay put here in the UAE and will attract further of their fellow countrymen to the Emirates over the next five years to avoid the turmoil that many feel they will be subjected to.

JLL meanwhile say that Dubai residential market will easily recover in early 2017 if external factors stabilize over the rest of this year.

Meanwhile in the UK, the supply of homes dropped at its sharpest rate to date and buyer demand fell to an eight-year low in June after 52 per cent of the citizens voted to leave in the referendum, according to the Royal Institution of Chartered Surveyors (Rics).

DUBAI EVALUATES BREXIT EFFECT

JLL said that Dubai has become an increasingly expensive travel destination for many European tourists with the 4 per cent fall in the Euro so far in 2016 and more recent falls in the value of the British pound.

Saif Mohammed Al Suwaidi, the director-general of the General Civil Aviation Authority of the UAE, has remarked that the cheap pound and slowdown in the UK’s economy could result in drop of passengers from the country, which he said was a key market for UAE carriers.

Ahead of the vote, Reuters reported that Tim Clark, president of Dubai-based airline Emirates has expressed concerns about the impact on travel across Europe.

JLL also expects that several hotels announced for 2016 in Dubai may be postponed for opening to 2017, partly due to delays in construction and funding and the overly ambitious timelines initially set by some developers.