Dubai was long considered as an expatriate’s paradise, where high salaries without personal taxes had become a life saver for many a family in the developing countries. But off late Dubai is losing this status as the high cost of living is forcing many to leave this city for greener pastures. The Economist Intelligence Unit placed Dubai and Abu Dhabi in the top twenty most expensive cities in the world to live. Dubai currently holds the 89th position on the cost of living index, as the most expensive place in the world for expatriate living, out of 300 international locations.
The quality of life you would have in Dubai is largely a factor of three things: your cost of living, lifestyle and your purchasing power. Living costs depends on one’s lifestyle and preferences.
Accommodation
Competing with commercial development, costs of residential buildings have gone up considerably in recent years. With the surge of businesses, the influx of foreign workers in Dubai has raised the demand for living spaces. Flats, villas and living quarters have become a scarce resource in Dubai because of the surge in demand. During 2008, property rental and purchase prices soared in Dubai. As 2008 ended, the effects of the global credit crunch contributed to a freezing up of property sales in Dubai, with property prices declining. A radical decline was observed towards the end of 2009, with rental prices decreasing up to 50%.
- Rent: The annual rent for a villa could be between 120,000 to 300,000 AED depending on the location and the number of the bedrooms, while apartments are rented out between 50,000 – 200,000 AED. Studios are between 50,000 to 70,000 AED. Depending on location, there are studio-type flats in Dubai that rent for under AED 3,500 a month, in Deira or at Bur Dubai and in similar places. The high-end living options available at places like the Dubai Marina or Jumeirah start at AED 8,000 a month.
Utilities
Household costs, water, electricity, household gas, household fuels, residential taxes on house/ flat mortgage, and local property taxes are more expensive than in other cities, ranking Dubai as 33 out of 300 in the cost of living index. Water and electricity bill varies a lot with respect to an apartment and a villa. The average price for water and power per month per person are Dh.100 to Dh.500.
Transportation
Transportation is an issue in Dubai because many of Dubai’s business centres are located nowhere near residential areas. It is hard to live without a car here as there is almost no convenient transport infrastructure except for taxi. Traffic is usually heavy, making it even more difficult for buses and taxis to turnaround quickly.
Dubai bus fare is Dh.1.00 to Dh.6.00 by metro trip or abra, while taxi fare starts from Dh.10 to Dh.100 for short to long trip within Dubai.
In Dubai, however, having your own car is the cheapest, fastest and the easiest mode of transport, as gasoline is much cheaper here. A second hand car costs around Dh.15,000 to Dh.50,000, while you get a new car for Dh.40,000 to Dh.300,000. While saving for a car purchase, even renting a car at an average monthly cost of Dh.1500 to Dh.3000 is an option.
Car insurance costs are according to your car purchase value. For example: car of 80,000 AED has insurance cost of 4,000 AED per annum.
- Salik: In addition to the increased traffic, there is a road toll levied on the automobiles in Dubai. Every time you pass one Salik you are charged 4.00 AED. Eventually, there will be 15 Salik gates on Dubai roads.
Schools/Cost of Education
Re-locating to Dubai with children of school-going age may prove to be a challenge. The cost of private education is quite high in Dubai, and families with income levels less than Dh.10,000 per month may find their salaries insufficient to meet educational needs. Costs have gone up this year and schools have got a permission to increase their fees by/up to 30%. The most expensive schools are the ones managed by British or Americans. There are cheaper schools managed by Asians. The Grade School tuition fee usually range from Dh.5000 to Dh.90,000 for a full school year, while the high-end counterpart costs around Dh.100,000. However, the cost of education such as pre-school fees, crèche, high-school and college fee and tertiary study fee in Dubai is still comparatively better in comparison to several other cities.
Communication Expenses
Communication will not be a major issue in Dubai. Within the Emirates, the calls are either free or have very low toll charge for outside calls. The cost of various communications including home telephone rental, call charges, service provider fee, internet connection, mobile/cellular phone contract, and calls are equally expensive on average, in comparison to other cities. Monthly telephone calls including mobile or landline could range from Dh.100 to Dh.1000 within UAE, depending on usage.
Inflation
In 2006 and 2007 inflation rate was around 11%, in 2008 it is over 12% and has come down to 10% in 2009. Grocery items forecasted inflation rate is around 40%. Due to the oil price increase many imported items price is increased by 20% during the first half of 2008.
Food
This is probably the least of your concerns. Despite the inflation and the state of the world’s economy, food has remained affordable in Dubai across all salary levels. Eating out is an experience even labourers at construction sites in the industrial areas in Al Quoz can afford from time to time.
Food is a wonderful, cultural experience in Dubai. All sorts of exotic and delectable options are available and everyone can afford to eat anything they fancy. The best part is that there are also restaurants that offer food at Dh.35 to Dh.95 per person. The cost of dining in a cheap restaurant without alcohol for a single person will not exceed maximum of Dh.80.
It should also be noted that a large number of goods are imported to the UAE and so these charges may be passed down to the consumers. Despite this, the choice in product is diverse since goods arrive from Europe, the Far East, the US and the other Gulf Countries.
Clothing
Cost of clothing and footwear including business suits, casual clothing, children clothing, hats, evening wear, inner wear and accessories are comparatively expensive in Dubai. Clothing is comparable to the west, except that they may be a little cheaper due to Dubai’s tariff and taxation laws.
Healthcare
The cost of healthcare in Dubai is quite high, and is now in the process of establishing a solid healthcare infrastructure. It is the most important focus for Dubai at present, and is hoped to improve and get cheaper in future. Therefore, the cost of living index rates Dubai’s healthcare as 76 out of 300 international locations, with cost of general healthcare, medical and medical insurance, consultation rates, hospital private ward daily rate, non-prescription medicine, private medical insurance, medical aid contributions, all are relatively more expensive in comparison to other cities.
Furniture and Appliances
The cost of household equipment, furniture and household appliance, including iron, freezer, fridge, toaster, kettle, light bulbs, television, vacuum cleaner, and washing machine are all quite expensive on an average in comparison to other cities.
Recreation
Wine and dine time and leisure and socializing expenses rank highest next to rents, when it comes to cost of living in Dubai. Also, cost of books, camera film, cinema ticket, DVD, CDs, sports commodities, and theatre tickets are comparatively more expensive here.
Alcohol
Alcohol is available in hotels, as well as bars and restaurants with a link to hotels and a handful of private members clubs. To buy alcohol in a shop you will require a license. You will require a NOC from your employer and proof of residency and income. Your purchasing limit is linked to your salary. Muslims cannot get alcohol licenses, no matter where they are from. There is a 30% tax on alcohol in Dubai.
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