Ministry of Overseas Pakistanis & Human Resource Development Government Of Pakistan

Dubai market attracts overseas Pakistanis

16-10-2017 By: Webmaster

Dubai property market has become a major investment destination for oversees Pakistanis, particularly after the imposition of withholding tax on banking transactions and new property evaluation system introduced in the federal budget 2016-17. Real estate market agents have said they thought the UAE property market was costlier than that of Pakistan, but its high rental profit yield is attracting Pakistan’s undocumented real estate sector.

On the other hand, the UAE dirham, which is pegged to the greenback, is another incentive for the investors, as any rise in the dollar’s value will automatically increase the worth of dirham therefore the investment in dirhams will be more profitable than one in rupees, attracting oversees Pakistanis towards Dubai real estate sector.

Pakistan real estate market banked on money sent by overseas Pakistanis, particularly those residing in UAE; however, this trend has been reversing for the last two years after imposition of the WHT on banking transactions. Majority of the businessmen, perturbed by the imposition of 0.06pc withholding tax on banking transactions, pulled their money out from the banks and invested it in the real estate of both Dubai and Pakistan. The upcoming Expo Dubai 2020 may drive up the apartments’ rents, attracting the businessmen to invest more.

According to the real estate experts the investment in Dubai comes to Pakistan in the form of remittances earned through sales or rental income of properties owned by Pakistanis. The major portion of remittances from the UAE is contributed by expats residing in Dubai. Pakistan’s real estate sector seems to be more attractive for expats as they invest primarily in houses, residential and commercial plots.

Karachi, Lahore and Islamabad are the prime focus of overseas Pakistanis, who prefer to invest in Karachi due to stability in the security situation. Sector’s insiders say a lot of Pakistanis invest in properties abroad, especially in Dubai, while on the other side, a major portion of income generated in foreign lands finds its way back to various economic sectors, including property. According to a research report, more than 90 percent of Pakistani expatriates in the UAE spend their income to purchase properties back home in Pakistan.