17 July 2016

Brexit: Much Ado About Nothing

The recent panic of ‘Brexit’ caused global markets to fall by 5%, which included the S&P, FTSE, and the DFM. As fear receded, the markets made a quick recovery, regaining the losses.

The sterling, which fell 10% on the day remained at 30 year lows. Over the last 35 years the pound has systematically devalued against the US dollar.  However, this decline in the currency levels has not hindered the ability of residents to invest in assets abroad, particularly in real estate assets in Dubai.

The above graph reveals the growth of British Investors in the Dubai real estate market in the last four years. In terms of the absolute quantum the investment levels have doubled, but as a percentage of the overall value of transactions it has nearly tripled. In 2007, the level of British Investments in Dubai real estate totaled AED 2.1 Billion, marking a near 5x increase in the last 9 years.

The ‘Brexit’ event will continue to play out over next few years, creating uncertainty and instability in the UK and global markets. However, it is clear that currency fluctuation doesn’t influence overseas buyers to the degree that will drastically effect buying patterns.

To download the full report click here: http://blog.reidin.com/PublicReports/UAE160718.pdf