KARACHI: Rising tensions in the Gulf have slowed Pakistani investment in Dubai’s property market amid fears that US military strikes on Iran could trigger a sharp fall in prices, property dealers in Dubai and Karachi said.

Pakistanis have long been among the largest investors in Dubai real estate, with the emirate also regarded as a safe haven for illicit funds. In 2023, Pakistan ranked as the second-largest investor in Dubai properties, while in 2025 it slipped to fourth place.

Growing fears of conflict in the Gulf have created uncertainty across the region, with investors from Pakistan, India and other Gulf countries concerned about the safety of billions of dollars invested in Dubai’s property market.

Dubai-based property dealer Asif Chakwal said he was not overly concerned and did not expect war or any direct threat to Dubai.

Investors fear US-Iran conflict may trigger sharp correction in emirate’s property prices

“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,” Mr Chakwal told Dawn.

However, property dealers in Karachi who trade in Dubai real estate expressed caution, though they said prices had not declined so far.

Discussions with dealers and investors suggested that many still doubted a full-scale war would break out in the region.

Imran Memon, a dealer with extensive experience in Dubai, said there would be no harm to Dubai “as it is the best shelter for the rich of the world, like Switzerland”.

“Not only are Indians and Pakistanis investing in Dubai properties, but the Russia-Ukraine war has also pushed wealthy individuals to buy properties there,” Mr Memon said, adding that the conflict had prompted investors from Eastern Europe to shift capital to Dubai.

He said Chinese and Iranian investors had also invested heavily in the emirate, including overseas Iranians.

A Pakistani businessman, who declined to be named, said he was concerned because a large number of affluent Pakistanis had investments in Dubai. He recalled that during the 2007-08 global financial crisis, Dubai’s property market suffered a steep downturn and Pakistanis lost billions of rupees as prices plunged.

It is widely believed that a substantial amount of illicit money from Pakistan has flowed into Dubai, although many legitimate businesses and technology companies have also relocated there to avoid corruption and bureaucratic hurdles at home.

According to a list issued by Dubai’s Real Estate Market on Sept 24, 2025, India ranked first among the top 10 countries investing in Dubai real estate, followed by the UK, Saudi Arabia, Pakistan, Iran, Turkiye, Germany, Russia, China and the United States.

The United Arab Emirates is Pakis­tan’s second-largest trading partner after China and has substantial investments in Pakistan, particularly in the financial sector.

Hundreds of thousands of Pakistanis work in the UAE, and the country is the second-largest source of remittances to Pakistan.

Political analysts in Pakistan believe Israel could attack Iran with US support, potentially triggering a regional conflict with serious economic consequences.

Published in Dawn, February 27th, 2026