Karachi: A number of Pakistani investors, considering the ongoing crises in the region, have begun selling their properties in Dubai and allocating part of the proceeds to purchase luxury homes in Karachi. This change in investor behavior indicates a reduced attractiveness of Dubai as a safe haven.
Decrease in Property Transactions in Dubai
Since the onset of the crisis, the Dubai real estate market has witnessed a significant decline in transaction volume. Assessments indicate that the volume of real estate transactions in the United Arab Emirates has decreased by 37 percent in the first 12 days of March compared to last year and has dropped by 49 percent compared to February. Some properties in Dubai are being sold at discounts of 12 to 15 percent.
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In May, property sales in Dubai decreased by another 19 percent compared to April. Analysts believe that this war has disheartened investors who were attracted to the city due to its tax-free status and political stability.
Return of Investments to Pakistan
Mohammad Hassan Bakshi, head of the Pakistan Builders and Developers Association, stated: "Money is no longer going to Dubai. People are worried due to the war and instability in the region. The funds that were previously available are returning to Pakistan." This crisis, which began on February 28, has disrupted trade and energy flow and has overshadowed perceptions of Dubai's isolation from regional instabilities.
Some Pakistani investors are waiting to sell or liquidate their assets in Dubai and transfer part of their capital to luxury projects in Karachi, especially in the Defense area. Bakshi acknowledged: "People are waiting to cash out their investments, particularly communities that consider themselves vulnerable in the current situation in Dubai."
Meanwhile, a Pakistani investor based in Dubai who advises wealthy clients has also witnessed a decline in investments in Dubai and a transfer of funds to Karachi. He said: "In Dubai, people are selling to move their assets to what they now consider a safer haven, namely DHA in Karachi."
Significant Growth in Remittances from the Emirates
Official data from Pakistan shows that remittances from the Emirates have surged significantly during this crisis. Worker remittances from the Emirates rose by 13 percent from February to August compared to last year, reaching $5.55 billion. In May, remittances from the Emirates reached $1.01 billion, marking a 36 percent increase.
Overall, Pakistan received $3.66 billion in remittances in August, which is 16.5 percent more than last year. Additionally, inflows through digital accounts, which allow overseas Pakistanis to hold and invest their funds, increased by 52.2 percent during the same period.
Bakshi noted that some of the proceeds from the sale of foreign assets may be transferred to Pakistan through remittance channels or digital accounts, but official data does not identify the source of these funds.
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