The Gulf war has disrupted the flow of undeclared funds from Pakistan to Dubai, with some Pakistani investors now seeking to repatriate money already invested there and redirect it into the domestic property market, according to sources in the property and currency markets.
Thousands of Pakistanis have invested hundreds of millions of dollars in Dubai, particularly in real estate. Pakistan has twice ranked as the second-largest foreign investor in Dubai’s property market, while Dubai was widely viewed as a safe haven for wealth generated through Pakistan’s informal and illicit economy.
All Pakistan Builders Association Chairman Hassan Bakhshi estimates that around $60 million in black money is generated in Pakistan each month and has historically been invested in Dubai. He said that flow has now largely stopped as the conflict has made it difficult for investors to access or recover funds held there.
Currency dealers said the trend has reversed, with higher remittances from Dubai indicating that Pakistanis are bringing liquid assets back home. The shift has also coincided with rising property prices and trading activity in Pakistan.
In Karachi’s Defence area, property prices have reportedly risen by 50–60 per cent since the Gulf war began, with investors favouring properties considered relatively secure from fraudulent or disputed transactions. Dealers said prices in other parts of Karachi have also increased by around 20–25 per cent.
Dubai had also attracted Pakistani technology companies and businesses seeking a more predictable, business-friendly environment. Many used the emirate as a base for conducting legal trade with countries including India and Bangladesh. The conflict has disrupted these operations, leaving some investors struggling to recover their funds.
Property and currency market sources expect more money to flow back to Pakistan if conditions in the Gulf deteriorate further, arguing that the conflict has weakened Dubai’s appeal as an investment and tourism destination. Meanwhile, increased liquidity and government measures to support construction are contributing to renewed activity in Pakistan’s property market.
