Tensions slow Pakistani investment in Dubai real estate - Business

Rising tensions in the Gulf and fears that US military strikes on Iran could spark wider conflict have put the brakes on Pakistani investment in Dubai’s property market, property dealers in Dubai and Karachi told Dawn. Pakistan, long one of the emirate’s largest investor communities, fell from the second-largest investor in Dubai real estate in 2023 to fourth place in 2025, and dealers say growing geopolitical uncertainty has clouded appetite even as prices have not yet shown a correction.

"There is definitely concern about tensions in the Gulf, but things are apparently normal. There is no report shaking confidence in Dubai properties. We are in good shape," Dubai-based property dealer Asif Chakwal told Dawn.

Dealers and investors interviewed by Dawn — in reporting by Shahid Iqbal published February 27, 2026 — described a market caught between long-term structural demand and near-term geopolitical risk. Imran Memon, a Karachi-based dealer with extensive experience in Dubai, said he did not expect a collapse in demand, arguing Dubai remains "the best shelter for the rich of the world, like Switzerland." He added: "Not only are Indians and Pakistanis investing in Dubai properties, but the Russia-Ukraine war has also pushed wealthy individuals to buy properties there," pointing to a broader shift of capital into the emirate from Eastern Europe, China and Iran.

Yet caution persists. An unnamed Pakistani businessman told Dawn he was concerned because "a large number of affluent Pakistanis had investments in Dubai" and recalled the 2007-08 global financial crisis when Dubai’s property market "suffered a steep downturn and Pakistanis lost billions of rupees as prices plunged." That memory underpins current anxiety that a military escalation involving the United States, Israel and Iran could trigger a sharp correction.

There are also longstanding questions about the origins of some capital flowing into the UAE. Dawn noted it is "widely believed that a substantial amount of illicit money from Pakistan has flowed into Dubai," even as legitimate businesses and technology companies have relocated to the emirate to avoid corruption and bureaucratic hurdles at home.

Market footprint and regional ties

• Dubai Real Estate Market list (Sept 24, 2025) ranked the top overseas investor countries as: India, United Kingdom, Saudi Arabia, Pakistan, Iran, Türkiye, Germany, Russia, China and the United States.
• The United Arab Emirates is Pakistan’s second-largest trading partner after China and is also the second-largest source of remittances to Pakistan.

So far, dealers in Karachi and Dubai reported prices had not declined despite the risk-off mood. But political analysts in Pakistan warned that an attack on Iran by Israel with US support could "potentially trigger a regional conflict with serious economic consequences," a scenario that dealers say would likely cut both investor confidence and capital flows into Dubai real estate.

Looking ahead, market participants expect a period of muted transactions as buyers and sellers reassess risk. For now, Dubai’s pull as a destination for wealthy investors and expatriates remains intact, but the legacy of the 2007-08 crash and the prospect of a sudden regional escalation mean Pakistani investors are watching developments in the Gulf closely.