KARACHI: While Pakistani real estate agents made a fortune in the sale and purchase of properties in Dubai in 2016, the magnitude of investments made by Pakistanis in the commercial capital of the UAE has dropped significantly in the corresponding period, it emerged on Friday.
According to figures released recently by the Dubai Land Department (DLD), the share of Pakistani investors in the Dubai property market in 2016 stood at AED 4.4 billion ($1.2bn as of today) — a 42.8 per cent decline compared to the previous year. With the AED 4.4bn investment in 2016, the investment of Pakistanis in Dubai property market since 2013 reached AED 28.4bn ($7.73bn) or Rs810bn.
“The year 2016 saw foreign investment in the Dubai real estate market approaching AED 44 billion, from 22,834 investors of 136 nationalities,” said the DLD report posted on its website.
“Indian nationals rank highest in terms of both volume and value, making AED 12bn worth of property transactions across 6,263 investors. Pakistan contributed AED 4.4bn worth of property transactions across 3,372 investors, while British investment totalled AED 5.8bn from 3,372 investors.
In 2015, Pakistanis had bought 6,106 properties worth around AED 8bn ($2.1bn) in Dubai.
Real estate brokers here believed that a major reason behind a decline in the investment of Pakistani citizens was a fear that the UAE government would share their bank details with the Pakistani government.
“[Pakistani] investors feared that the UAE government will share their investment details with the government… so they moved, and are moving, their capital from Dubai to Pakistan,” said property dealer Maaz Liaquat.
Banks in the UAE had communicated to their foreign customers about implementation of a new global transparency policy from Jan 1 under which details regarding their bank accounts, interest, dividends or incomes earned outside their home country would be exchanged with their home country in a move to fight cross-border tax evasion.
Mr Liaquat, who also deals in the UAE’s real estate market and is member of the Defence & Clifton Association of Real Estate Agents, said that Pakistani economy was improving and the investors were showing confidence in their own country. “People now prefer to work in Pakistan because of good returns.”
He said that even the real estate crisis over valuation of properties by the Federal Board of Revenue did not see movement of capital from Pakistan to overseas.
He said that the Pakistani investment in the UAE would reduce further in the days to come.
However, it is also a fact that tough regulations made it very difficult for Pakistani investors to send money abroad through informal banking channels.
Top earning brokers
The DLD figures said that in 2016 the total value of real estate brokers’ commissions totalled over AED 1.5bn from 32,932 transactions.
“UAE citizens ranked first in terms of the number of brokers in the market, followed by Indian nationals and Pakistani nationals, who have also achieved excellence in this field,” said the latest DLD report posted on its website.
It said that Dubai’s real estate market attracted 5,933 active brokers and 2,285 registered brokerage offices. “The AED 1.5bn figure describes the amount of commission earned by property brokers registered in the Real Estate Regulatory Agency (RERA), DLD’s regulatory arm, with the sum representing two per cent of the total value of recorded deals,” it added.