KARACHI: The ongoing Gulf war has significantly disrupted the long-standing flow of undocumented Pakistani wealth into Dubai’s real estate sector, with market sources reporting that funds once considered secure abroad are now being channelled back into property investments within Pakistan.
For years, Pakistan ranked among the top foreign investors in Dubai property, and the emirate was widely regarded as a reliable destination for capital of questionable origin. That dynamic appears to be reversing.
Hassan Bakhshi, Chairman of the All Pakistan Builders Association, estimated that approximately $60 million in undocumented funds had previously left Pakistan for Dubai each month an outflow that has now halted entirely.
Currency market sources describe a similar shift, noting that assets already parked in Dubai have become difficult to liquidate amid the instability caused by the conflict. Rising remittance inflows from the UAE are being interpreted as evidence that Pakistanis are repatriating liquid holdings rather than expanding them abroad.
This capital redirection has had a visible effect on Karachi’s property market. According to Bakhshi, prices in the city’s Defence Housing Authority area have surged by 50 to 60 percent since the war began, driven partly by the area’s reputation for secure property titles.
Other parts of Karachi have seen more moderate gains of 20 to 25 percent, according to property dealer Karim Dad, who attributed the rebound to improved liquidity and government efforts to stimulate the construction sector.
The disruption extends beyond real estate. Several technology firms that previously relocated to Dubai, citing a favourable regulatory climate and frustration with Pakistan’s internet connectivity and tax administration, are now among those seeking to recover stalled investments as the regional situation remains unresolved.
Analysts caution that any large-scale return of capital will likely depend on how quickly stability returns to the Gulf region.
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