Gulf tensions slow Pakistani investment in Dubai property market: report

Rising tensions in the Gulf have led to a slowdown in Pakistani investment in Dubai’s real estate market, as concerns grow that a possible US strike on Iran could unsettle property prices, Dawn reported, citing property dealers in Dubai and Karachi.

Pakistan has traditionally ranked among the leading investors in Dubai property. In 2023, it was the second-largest source of investment in the emirate’s real estate sector, but by 2025 it had slipped to fourth position, according to market data.

Property brokers said uncertainty in the region has prompted caution among investors from Pakistan, India and other Gulf countries who hold substantial assets in Dubai.

The report quoted a Dubai-based property dealer as saying that while concerns over regional tensions exist, there has been no immediate impact on property prices or market confidence. Dealers in Karachi who facilitate Dubai real estate transactions echoed the cautious tone, noting that prices have not declined so far.

Some market participants pointed out that Dubai has long attracted global capital during times of geopolitical uncertainty. They said investors from countries affected by conflicts, including the Russia-Ukraine war, have shifted funds to the emirate. Chinese and Iranian investors, including members of the Iranian diaspora, have also been active in the market.

However, a Pakistani businessman expressed concern that any escalation could affect a large number of affluent Pakistanis with investments in Dubai. He recalled that during the 2007-08 global financial crisis, Dubai’s property market experienced a sharp downturn, resulting in losses for overseas investors.

According to Dubai’s Real Estate Market data released in September 2025, India ranked first among foreign investors in the property sector, followed by the United Kingdom, Saudi Arabia, Pakistan, Iran, Turkiye, Germany, Russia, China and the United States.

The United Arab Emirates remains Pakistan’s second-largest trading partner after China and hosts a significant Pakistani workforce. The UAE is also the second-largest source of remittances to Pakistan.

Analysts say that any escalation involving Iran and the United States could have broader economic implications for the region, including potential effects on real estate markets.