Dubai’s appeal as an investment destination appears to be changing for some Pakistani investors amid the Gulf war. According to property and currency market sources, money previously moving toward Dubai has slowed considerably.
At the same time, some funds already invested in Dubai are reportedly returning to Pakistan.
These funds are increasingly finding their way into local property markets, particularly in Karachi.
Gulf War Changes Investment Flows
Thousands of Pakistanis have invested hundreds of millions of dollars in Dubai, especially in its property market.
Pakistan has twice ranked as the second-largest foreign investor in Dubai property, according to the supplied report.
Dubai had also gained a reputation among some Pakistani investors as a destination for undeclared wealth.
However, market sources now say the conflict has disrupted those investment flows.
All Pakistan Builders Association Chairman Hassan Bakhshi said the movement of such funds had stopped.
“About $60 million in illegal (or black) money is created in Pakistan per month and has been invested in Dubai, but this has now stopped,” said All Pakistan Builders Association Chairman Hassan Bakhshi.
Currency dealers also described a reversal in the flow of funds between Dubai and Pakistan.
They said some money held in Dubai has become difficult to recover because of the ongoing conflict.
Higher Remittances Signal a Shift
Currency dealers have linked higher remittances from Dubai with the return of liquid assets to Pakistan.
“The higher remittances from Dubai reflect that Pakistanis are sending back their liquid assets to Pakistan,” said a currency dealer.
As a result, Dubai’s appeal for investment and tourism has reportedly weakened among some Pakistani investors.
Meanwhile, funds returning to Pakistan are finding new opportunities in the domestic property market.
Market participants say the shift has contributed to increased liquidity within Karachi’s real estate sector.
Defence Property Sees Sharp Price Increase
Defence has emerged as one of the areas attracting greater property investment in Karachi.
Bakhshi said property prices in Defence had increased substantially since the Gulf war began.
“Property prices in Defence went up 50-60 per cent after the Gulf war started. Since the title of the Defence property is safe (meaning no double filing or fake dealing), most of the money is going towards the area,” said Mr Bakhshi.
He attributed the movement partly to investor confidence in property titles within the area.
Consequently, more funds are reportedly moving toward Defence as investors seek domestic property options.
Pakistani Businesses Also Face Disruption
The investment shift extends beyond property, as some Pakistani technology companies had previously established operations in Dubai.
The report said these companies had moved there because of Dubai’s business environment.
Some businesses had also considered moving abroad because of internet connectivity problems and interference from tax authorities.
Additionally, thousands of Pakistanis used Dubai as a third country for conducting business with India, Bangladesh and other markets.
However, the continuing war-like situation has complicated those arrangements for some investors and businesses.
Some are now reportedly trying to recover investments held in Dubai.
Investors Look Towards Karachi
Currency dealers expect more funds could return to Pakistan if the regional situation continues affecting investor confidence.
They said hundreds of millions of dollars could eventually return from the Gulf once conditions normalise.
Bakhshi also supported reports that Pakistani investors were attempting to recover investments from Dubai.
According to property dealers, prices in Dubai have fallen significantly in areas affected by the conflict.
Meanwhile, Pakistan’s property market has recorded stronger activity since the war began.
Property dealers reported increases in both buying and selling as liquidity improved.
Karachi Property Market Gains Momentum
Karim Dad, a property dealer, linked the increase partly to government measures aimed at supporting the construction sector.
“The government is also taking measures to boost the construction industry, and the rebound in property prices was the result of this effort. The property prices in other areas of Karachi have increased in the range of 20 to 25pc,” said Karim Dad, a property dealer.
The reported movement suggests that investment patterns are shifting as uncertainty affects Dubai.
For Pakistani investors, local property has consequently become a more attractive destination for some returning funds.
However, the longer-term direction of these flows will depend on how the regional situation develops.
For now, market sources point to a notable change: money that once moved toward Dubai is increasingly circulating within Pakistan.
