The UK’s decision to leave the European Union is expected to have an adverse impact on the Dubai property market in the second half of the year, according to investment and advisory firm JLL.

As the third largest investors in the emirate’s property market, British investors carry a lot of weight. But given recent events in the UK, sentiment has weakened and as a consequence most expatriates are likely to continue renting homes rather than switching to ownership. Therefore, the sales sector is likely to be impacted.

“Even though it is too early to predict the long-term implications, overall there is a slight probability of British investors being negatively impacted by the devaluation of the British pound following Brexit,” said Craig Plumb, head of research, JLL Mena.

However, despite the short-term slowdown, JLL foresees a recovery in the Dubai residential market early next year.

“We believe the effect of the decision will have temporary repercussions as a substantial number of British investors who work and reside in the UAE avoid sourcing their income in sterling,” Plumb added. 

Earlier this week, a report released by ValuStrat, a consultancy company that regularly tracks property prices in key locations across the emirate, suggested that the Dubai housing market is showing signs that it is bottoming.