Quality of life in Dubai and Abu Dhabi is non-comparable to any city in the Middle East with UAE being the most diversified economy in the GCC attributed to its stable living environment. The great economy has led to population growth and, consequently, rising property prices and cost of living (housing and utility costs).
These emirate cities top the region in the Quality of Living study, but expats are concerned about cost of living, which is one of the country’s drawbacks. Cost of living is now the number one worry for expats in Dubai and Abu Dhabi; while some expats find the cost of living is reasonable, others do not. The high cost of living is forcing these expats to consider leaving the country.
Expats are wondering if the fact that UAE’s two major cities are getting more expensive is making not worth their move. However, UAE’s economy, sustainable development and improved quality of life, in recent time, is continuing to attract expats that are looking into cheaper areas in the region that offer them affordable housing.
According to Mercer’s 2015 Cost of Living Survey, unveiled this month, Dubai is the 23rd most expensive city in the world, while Abu Dhabi is ranked 33rd most expensive city to live in. Both cities are paying for steep increases in rental accommodations since 2014; they are moving up in the chart and worse, they might be potentially reducing their attractiveness to future expats.
Ever since the country was chosen as host for Expo 2020, the housing needs of expatriates and laborers relocating to Dubai have increased, said Dubai’s Department of Tourism and Commerce Marketing (DTCM) director general Helal Almarri. Abu Dhabi, the principal business hub and the capital of the UAE, has also seen an influx of expatriates with aspirations of boosting their earning potential and job prospects. They satisfy the economic and developmental needs for core long-term infrastructure projects in the emirate. However, expats are faced with the challenges of living and expenses related to staying there and rent high-end accommodation.
Despite the rapid economic growth of multinationals that rely on expatriate assignments to address business needs in the country, the impact of the cost of living, according to Mercer’s survey, is having a direct impact on employees currently working and living there today.
Mercer’s Cost of Living survey analyzes accommodation costs (i.e., the expenses towards housing, transport, food, clothing, household goods and entertainment, to name a few) around the world. Such a report, taken in March of each year, provides relevant info on the differences between cities. The detailed report, which is available upon request, assesses significant international quality of living factors and compensation allowances (using factual and objective price information) for expatriate employees assigned or relocated in major cities.
To determine rankings, Mercer looks at a host city from an expatriate perspective and highlights some of its strengths, weaknesses, opportunities, and threats that attract or repel from a location. Furthermore, it provides an overview of conditions and hardships.