Pakistanis third biggest foreign investors in Dubai property

[ghazi52]

Pakistanis third biggest foreign investors in Dubai property

An ariel view shows the Burj Khalifa, the world's tallest tower, dominating the Dubai skyline on April 10, 2016. PHOTO: AFP

DUBAI: For more than 10 years Dubai property prices have been on a roller coaster, creating and wiping out fortunes, but recently they appear to have run out of steam.

The Gulf emirate shot to prominence as an attractive real estate market after opening up special freehold zones for foreign buyers in 2002.

Prices peaked in 2008, driven mainly by speculative investments, but later nosedived as finances dried up because of the global financial crisis, shedding half the sector’s value.

Renewed demand boosted values and rents at breakneck speed between 2012 and 2014, stirring fears of yet another bubble until prices headed south again, though more slowly this time.

Last year prices fell by an average of 12 per cent, according to Craig Plumb, head of MENA research at property consultancy Jones Lang LaSalle.

“The market is having something of a soft landing at the moment, so the prices have been now falling for over a year… We think the market will continue to drop a little bit more, but not as much as it already has,” he said.

“We think that most of the decline we’ve already seen.”

An ariel view shows a golf course and residential compounds in Dubai on April 10, 2016. PHOTO: AFP

Dana Salbak, head of MENA research at Knight Frank property consultancy, put the 2015 drop in residential prices at 10 per cent.

“We saw a slowdown in the residential sector. We saw prices dip about 10 per cent over 2015. Not so much in the first quarter of the year,” she said.

Dubai’s market is driven by overseas demand which has fallen as currencies weakened against the US dollar to which the UAE dirham is pegged, pushing up prices, Plumb said.

An ariel view shows the Burj Khalifa, the world’s tallest tower, dominating the Dubai skyline on April 10, 2016. PHOTO: AFP

“Real estate in Dubai is now more expensive for buyers holding other currencies,” Knight Frank said in its 2015 report.

Indians top the list of foreign investors in Dubai property. In 2015, they spent more than 20 billion dirhams ($5.4 billion) out of a total of 135 billion dirhams.

British and Pakistani buyers followed with 10.8 billion dirhams and 8.4 billion dirhams respectively. Iranians spent 4.6 billion dirhams, Canadians 3.7 billion dirhams and Russians 2.7 billion dirhams.

A general view taken on April 1, 2016 shows the shows Dubai Marina. PHOTO: AFP

The Indian rupee, the euro and the Russian ruble have all dropped significantly against the dollar.

Dubai property has also been affected by a slowing economy that has created fewer jobs, which in turn means not as many people arriving to demand housing, Plumb said.

And although its economy does not rely on Dubai’s dwindling resources of oil, the plunge in oil revenues for the UAE and other Gulf states has exerted indirect pressure.

The drop in oil prices and the economic slowdown have “impacted investors’ sentiment, their willingness and appetite to invest”, said Salbak. “They adopted a cautionary approach.”

But a collapse like the 2009 crash is probably not on the cards.

“We don’t think there is very much likelihood of the market collapsing in a spectacular sense. Our forecast is for another decline of between five and 10 per cent in 2016,” said Plumb.

 

[Khan_21]

I went to dubai around 2013 . Went to palm jumeirah and all their elite housing societies . Most of the houses were either owned by Indians or Pakistani's . Few of them were also owned by rich afghan drug lords .

 

[Zaneesh852]

Pura mulq he offshore hay

 

[Asian.Century]

ISLAMABAD: In what reads like a script from the dark side, Pakistan’s super rich have made merry in one of the world’s luxury capitals away from the prying eyes of their compatriots. The physical distance has long seemed to work.

For the first time, Geo News can disclose that Pakistanis have bought properties worth an estimated Rs1.1 trillion in the heart of Dubai in the past one-and-a half-decade. Interestingly, the majority of them did not disclose these properties in their annual returns and were said to be moving their assets out of the country to avert getting caught in the event of a serious crackdown on this unaccounted-for money.

According to a confidential document available with Geo News, around 7,000 plus super rich Pakistanis bought luxury residential villas/flats/estates in 12 renowned localities in the Emirati capital. The documents contain particulars of some 34,000 rich families from 118 countries in all.

Such is the spending spree of these wealthy Pakistanis that they have become the biggest overseas property buyers in Dubai — leaving behind even investors from India, the United States, Britain and the rest of the world thanks to the Rs1.1 trillion they shelled out for these properties.

This list of the who’s who includes politicians, some of whom are members of parliament, retired generals, former judges, real estate tycoons, businessmen, bureaucrats, lawyers, actors, singers, and some media personalities.

Startling revelations came at a time when the country’s top court directed the SBP, SECP, IB, ISI, MI, Foreign Office and FIA to share their information about foreign bank accounts and foreign assets held by the Pakistani citizens.

The story of these wealthy ladies would not have been a great bone of contention had financial propriety been in the all clear for all buyers, most of them luckily attached with their billionaire husbands. However, according to the Federal Board of Revenue (FBR) officials, hardly 2 per cent of these buyers disclosed any foreign properties in their annual returns. An overwhelming majority never disclosed their foreign offshore wealth, thus violating declaration laws governing foreign assets.

The authorities admit that a now-dormant investigation by FIA was able to trace only 100 investors in the past two and a half years. The regulators — FBR, FIA, SECP and SBP — failed to question the legitimacy of the transfer of funds to buy those properties and no action had been taken yet.

Based on investigations over the past four months both in Pakistan and Dubai by this correspondent for Geo News (Aaj Shahzaib Khanzada Ke Sath), an estimated 5,000 Pakistanis bought properties in their names since 2002 while around 2,000 Pakistani nationals owned properties as ‘benamis’. Nearly 5,600 Indians, 887 Canadians, 799 Americans, 400 Britons, 194 Afghans, 332 Australians and 83 New Zealanders also splurged on the high-end property market. The rest came from the 113 countries.

Pakistanis bought over 967 villas/residential properties in luxury areas of Greens; 75 precious flats in Emirates Hills; 165 properties in Discovery Garden (residential and commercial); 167 flats in Jumeirah Island; 123 residential properties in Jumeirah Park; 245 plush flats in Jumeirah Village; 10 properties in Palm Deira; 160 in Palm Jabel Ali; 25 properties in Palm Juemirah Shorelines; 234 properties in International City; and 230 in Dubai Cilicon.

The rest of properties were bought elsewhere in Dubai. Around 200 Pakistanis, who hold Canadian citizenship; 50 with Australian nationality; and four Pakistanis holding New Zealand citizenship own residential properties in Dubai.

The base price (lowest value units) of a property in Dubai market was AED1,000,000 and upper end properties were worth as much as AED15,000,000, according to some recognised property consultants in Dubai. They claim the estimated value of 7,000 properties owned by Pakistanis in Dubai, UAE, totaled: AED35,000,000,000 (approximately, US$9,529,000,000 or Pakistani Rs1,004,663,897,187).

For evaluation purposes, the properties were broadly divided into four categories. Understanding that upper end properties are lesser in number, the valuation estimates were calculated as 10% high end properties (700 units) @ AED15,000,000 each; 20% upper-mid-level properties (1,400 units) @ AED10,000,000 each; 20% mid-level value properties (1,400 units) @ AED5,000,000 each, and 50% lowest value properties (3,500 units) @ AED1,000,000 each.

Despite repeated requests officially delivered to them by Geo News, the FBR, SBP and FIA chose to remain silent on the issue. This correspondent made repeated requests via emails, WhatsApp and text messages to 1,200 prominent Pakistanis who own properties in Dubai, out of which only eight buyers responded in the past three weeks.

Similarly, neither the Pakistan mission in the UAE nor the Dubai Land Department responded to the queries made by Geo News. This correspondent met more than two dozen officials concerned of the FBR, SPB and FIA in Pakistan and a number of Pakistanis and property consultants in Dubai.

The said authorities, however, admitted that a large number of Pakistani citizens were found in possession of properties such as luxurious flats, apartments and other valuable properties worth billions of rupees and the funds were transferred to the UAE through illegal channels in violation of the Foreign Assets’ Declaration Regulations 1972 and the rules and regulations of SBP.

“The FIA wrote to (the) Pakistani Mission in Dubai on Aug 17, 2015 but no response (has been) received yet. A letter was also written to Dubai authorities through the Ministry of Foreign Affairs but no response was received. FIA sought details of Pakistani citizens who purchased properties in foreign countries and declared the same before the SBP w.e.f 1990 till to 2017. The SBP officially informed the FIA through a letter written on Sep 23, 2015 that no Pakistani citizen intimated about his/her belongings of immoveable properties outside Pakistan under the provision of foreign assets (declaration),” revealed a senior official of FIA overseeing progress into this case.

He conjectured that funds invested in properties in the UAE and other countries had mostly been transferred through ‘hundi’ and ‘hawala’ network and thus no money trail can be found for such transactions. Foreign tax administrations were also not cooperating in furnishing full particulars of Pakistani owners of properties within their territorial jurisdiction to Pakistani tax authorities, he added.

All such persons or individuals who have acquired properties abroad and have not reported those in their wealth statements filed with the FBR can be prosecuted criminally under Sections 192 and 192-A of the Income Tax Ordinance 2001 in addition to other penal provisions of the said ordinance.

They are also in violation of the provisions of Anti Money Laundering Act for having reportedly channeled their (mostly ill gotten) money abroad through illegal instruments such as ‘hundi’ and ‘hawala’.

The Foreign Assets’ Declaration Law reads: “Any person who owns any moveable or immoveable properties, not being foreign exchange, in any country other than Pakistan, shall declare before SBP its description and value and the income derived from it. It [Law] shall all apply to all citizens of Pakistan i.e. any person employed in any capacity in foreign country or a wage earner residing in a foreign country.”

Apparently, the buyers couldn’t care less.

Speaking in the Geo News programme 'Aaj Shahzeb Khanzada kay Sath', Adviser to the Prime Minister on Finance Miftah Ismail said a person bringing dollars to Pakistan neither paid any tax nor could be questioned by the FBR.

According to Miftah, people first send money abroad Hawala and later whiten that through amnesty scheme. But the government wants to bring a new scheme through the practice.

Miftah said the government wanted to introduce an amnesty scheme during the current tenure. Actually, it would be wrong to describe it an amnesty scheme as they were going to end the amnesty scheme, Miftah said.

He said their objective was to bring a scheme to encourage the Pakistanis to invest in the country and give a chance for regularising the money to those having assets in or outside the country.

Tax expert Shabbar Zaidi said no amnesty scheme for foreign assets had ever been given in Pakistan, adding that the new initiative would be different from the previous ones because of being comprehensive to settle the international issues.

He said given the changes at international level, it was essential for the Pakistanis to declare their foreign assets to protect themselves and their wealth. People must understand that it was an international issue, not local, Zaidi stressed.

https://www.thenews.com.pk/print/277433-7-000-pakistanis-own-rs1-100-bn-properties-in-dubai#_