Pak­istan prop­erty mar­ket basks in Dubai slow­down

The Pak Banker - - NATIONAL -

A flow of money from a slow­ing Dubai prop­erty mar­ket to Pak­istan has pushed up prices, as much as dou­ble in some ar­eas.

Prop­erty deal­ers and de­vel­op­ers said higher de­mand, es­pe­cially in Karachi and Is­lam­abad, was driv­ing prices higher on a daily ba­sis. In con­trast, in­vestors said Dubai mar­ket had lost at­trac­tion, fall­ing by 15 to 20 per cent in re­cent months.

Ac­cord­ing to Dubai An­nual Mar­ket Up­date Re­port is­sued in mid-De­cem­ber, av­er­age res­i­den­tial prop­erty rates have fallen 16pc and 14pc year-on-year for apart­ments and vil­las, re­spec­tively, while over­all unit trans­ac­tions de­clined by 33pc. How­ever, it was also noted that money laun­der­ing was checked by the lawen­force­ment au­thor­i­ties, par­tic­u­larly in the wake of op­er­a­tions against ter­ror­ism and its abet­tors. Re­cently, some money chang­ers were grilled in this re­gard by the au­thor­i­ties while a big money changer is al­ready in cus­tody over charges of money laun­der­ing.

"Am­ple liq­uid­ity for prop­erty in­vest­ment is push­ing prices ev­ery­where, par­tic­u­larly in Karachi and Is­lam­abad," said Ashraf Hameed, the di­rec­tor of prop­erty de­vel­oper Value Hous­ing. He cited closer mon­i­tor­ing of cross- bor­der money move­ment and im­proved law and or­der sit­u­a­tion in Pak­istan as rea­sons be­hind the up­trend. "We have no prob­lem of law and or­der in Is­lam­abad while sit­u­a­tion in Karachi has also im­proved sig­nif­i­cantly."

M. An­war, a pri­vate in­vestor re­sid­ing in Karachi, said: "Prop­erty prices in Dubai have dropped 15 to 20pc in com­mer­cial and semi-com­mer­cial ar­eas, and 5 to 10pc in posh ar­eas." Pak­ista­nis have been lead­ing in­vestors in Dubai prop­er­ties and achieved top po­si­tion a year ago. Most of them were busi­ness­men, politi­cians, govern­ment of­fi­cials and those who mi­grated to other coun­tries and shifted their prop­erty in Dubai for bet­ter re­turns.

It is also be­lieved that il­le­gal money earned through cor­rup­tion found Dubai as safe haven. The bal­ance of trade has been in favour of the United Arab Emi­rates. In FY15, im­ports from the UAE were $7.4 bil­lion while ex­ports were just $1.3bn. Im­bal­ances due to il­le­gal trad­ing could be much higher. Since the money laun­der­ing has sub­stan­tially re­duced th­ese days, the ex­change rate, par­tic­u­larly in the open mar­ket, is sta­ble for more than a cou­ple of months with slight fluc­tu­a­tions.

De­fence Min­is­ter Khawaja Asif lis­ten­ing to the prob­lem of a lady dur­ing Open Kutchary.

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