Brexit and the ongoing uncertainty in Europe is likely to play into the hands of Asian real estate markets, benefitting cities such as Hong Kong, Sydney and Shanghai, according to Asia-based analysts.

Megan Walters, head of research for Asia Pacific at JLL, said the uncertainty leading up to last week’s EU referendum had already slowed Chinese investment flows into the UK during the first quarter. In contrast, there have been signs of increasing demand for real estate in places like Hong Kong, she said.

In the near future, it is highly likely that Asian investors will continue to opt for real estate within the Asia Pacific region in markets “that are as transparent as London – for example, Sydney – or markets like Shanghai that are becoming considerably more institutional in nature”, Walters wrote in a note.

David Rees, head of Australia research for JLL, also said the Australian real estate market might be become relatively attractive in a post-Brexit environment because of its favourable regulatory environment.

The immediate impact on the Asian markets is likely to be in the form of foreign buyers “unable to bid until volatility passes” and banks that have strong “European connections which are unable to price risk in current volatile markets,” Walters said.

“It is possible that real estate investment deal flow may slow while this period of financial volatility continues,” she said.

However, “there will be winners”, Walters added, most notably the Japanese yen. Strong appreciation of the Japanese currency could also lead the Bank of Japan to engage in further quantitative easing, which could benefit the Japanese real estate market.

On the whole, however, the Asian real estate markets such as China’s are domestic-driven and, hence, relatively insulated from the current turmoil.

Asian investors that are most likely to suffer losses are those – such as Chinese and Taiwanese insurers – that have been investing billions of dollars in the UK property lured by London’s reputation as the financial services hub for Europe.

Those previously optimistic insurers are likely to suffer currency losses in their investments, Walters said.

In addition, analysts believe that that post-Brexit volatility in the financial – especially, the currency – markets are likely to lead to a pause on investment decisions by investors that might otherwise be planning to invest in the Asia Pacific region. This is particularly true for those investment funds with high concentration of EU investors.

Furthermore, JLL research shows the latest depreciation in pound is likely to have a significant impact on the real estate returns in Asia. So far in the first quarter, real estate investors would have made positive gains in all major Asian markets, with the exception of Singapore, according to JLL research.

Thanks to last week’s depreciation, a sterling-denominated investor that bought a Japanese real estate asset a year ago, would have locked in a gain of nearly 50% compared to 18% for a yen investor, the research showed.

Susheela Rivers, a partner at DLA Piper, also said that the post-Brexit jitters in the real estate market would probably lead to “a short-term negative on the property in the UK”.

But any weakness in real estate would likely attract bargain hunters, she said, adding that the real estate sector is ”not known for the effective pricing of political risk”.

Rivers continued: “That said, Hong Kong investors who invest in the UK property market should be aware of a possible depreciation of the pound and a decrease in property value”, adding that a weaker pound might attract foreign investors in the UK.

Peter Churchouse, a Hong Kong-based property analyst, said London’s property market was already showing signs of correction before Friday’s vote and that Brexit would accelerate the decline in property prices.

He also said that it might attract some investors from Asia who might be interested in looking for good entry point to access property in UK, adding, however, that biggest gainers would be real estate prices in Scotland, Dublin, Frankfurt, and to some extent, Paris.