According to newspaper reports, Pakistanis injected $490 million in the real estate market of the United Arab Emirates during the last two and half years, out of which an amount of around $81 million was spent during the last six months alone. Dubai real estate market has emerged as attractive destination for investors from all over the world, including for Britons and Indians who are also making heavy investment in this sector. However, they are far behind Pakistan in terms of the volume of investment. The question is why Dubai has attracted the world investors when it has very odd geographical location and hot and arid land with hostile climate. On another note, Karachi and Gwadar are on the edge of the Arabian Sea with better air, land and sea access for the visitors from all over the world. Pakistanis are friendly peoples and hospital than arrogant locals in Dubai but no one wants to invest in this country. Rather, investors from the country are taking interest in the Dubai real estate market and elsewhere.
In 2015, Indians ranked first by investing around $550 million in Dubai market, next were the Britons with $250 million investment and Pakistanis ranked third with $76 million investment. The bureaucrats, politicians and businessmen remained major investors from Pakistan who lifted the Dubai real estate market. The trend of investment started when the government introduced withholding tax on filers and non-filers on banking transactions, leaving little option for the public to keep their money in Pakistan. Billions of dollars have been sent abroad so far, particularly during the last three years. Now the latest move by the government to arrest the real estate market has added insult to injury. The property prices in Pakistan have started falling with change in the rules of business in the real estate sector. The future of the real estate sector seems to be bleak in Pakistan and even brand names are in crisis for one reason or the other. This will further boost real estate market not only in Dubai but also Kuala Lumpur.
One fails to understand why the government takes such step which always brings the business activities in the negative zones in the country. Finance Minister Ishaq Dar and Prime Minister Nawaz Sharif must give a second thought to the advice they receive from their aides. Pakistan is now emerging market, it should not take such step which frighten investors. The property markets in Karachi, Lahore and Islamabad are facing slump as there is no buyer and the entire real estate sector is about to collapse. No doubt the government is correct on moral grounds, but it is practically wrong because the tax system of Pakistan is almost in its initial stage. Let it improve gradually and there is a need to avoid any shortcut in the given circumstances.
