Dubai property no longer safe haven for Pakistani investors

Dawn reported that the Gulf war has reduced the flow of black money from Pakistan into Dubai, while funds already held there are being brought back and redirected into property at home. Sources in the property and currency markets said the trend has reversed. Thousands of Pakistanis had put hundreds of millions of dollars into Dubai real estate, and Pakistan was twice named the second-largest foreign investor in the emirate's property market.

Black money was widely believed to have found a safe haven in Dubai and to have pushed up property prices there. All Pakistan Builders Association chairman Hassan Bakhshi said about $60 million of illegal money was being created in Pakistan each month and placed in Dubai, but that flow has now stopped. Currency dealers added that funds parked in Dubai are stuck, and recovering them is difficult while the conflict continues.

A currency dealer linked higher remittances from Dubai to Pakistanis sending liquid assets home. Mr Bakhshi said Defence property prices rose 50 to 60 per cent after the Gulf war started, as titles there are considered safe with no double filing or fake dealing. Property dealer Karim Dad said prices in other parts of Karachi had risen 20 to 25 per cent, and trading volumes have also risen, with buyers and sellers both more active amid better liquidity.