Gulf war slows Pakistani black money outflows to Dubai, redirects funds to local property market: report

Illicit money flows from Pakistan to Dubai have slowed because of the Gulf war, according to Dawn, which drew on contacts in property and currency markets. Around $60 million a month was previously estimated to move from Pakistan into Dubai investments, but that movement has largely stopped. Some investors are now repatriating money from the UAE and putting it into domestic real estate.

Pakistanis had put hundreds of millions of dollars into Dubai, mainly property, and the country has been named on two occasions as the second-biggest overseas investor in the emirate's property market. Currency dealers say the trend has reversed because the conflict makes it hard to get funds out of Dubai. Rising remittances from the emirate suggest investors are sending liquid assets home, and some are trying to recover money from property there where prices have weakened.

In Karachi, the Defence area has seen property values rise 50 to 60% since the war began, while other districts recorded increases of 20 to 25%, according to dealers. Trading has picked up as buying and selling both increase with better liquidity. Currency dealers also anticipate that a sum in the hundreds of millions of dollars may flow back from the Gulf once stability returns.