Thursday, October 23, 2014
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Living in Dubai

Cost of Living in Dubai

Dubai currently holds the 89th position overall based on the latest cost of living index, as the most expensive place in the world for expatriate living, out of 300 international locations. This means that living in Dubai is fairly expensive, but not as much as many other cities. If you are planning to relocate to Dubai, it is helpful to gain a rough estimate of what it might cost to live here.

Expect to wheel and deal for your salary. There is no minimum wage, so should you land an interview, be prepared to answer the question of how much you expect to be paid. Set a bottom limit so that you don’t slip under it. Once you've landed that job, the three factors that will determine your quality of living will be: your living expenses, your purchasing power and your lifestyle. Without having lived in Dubai, knowing how much of a salary you will need is difficult to determine, but the three most important factors are: transportation, accommodations and food. Let’s take a brief look at each one of these.

Cost of Living in Dubai

Transportation cost in Dubai

Transportation is definitely a consideration in Dubai. Business centres have been designed to be situated away from residential districts, and traffic is usually heavy especially during peak hours, with massive vehicle volume seen in Dubai’s prime locations, particularly on Sheikh Zayed Street.

The Dubai bus system and taxis are good options for transportation. A Dubai bus costs around Dh.2.00 to Dh.6.00 for less than 3kms (Dh.4.80 for one-way ticket), while monthly pass can cost Dh.200.Taxis go for around Dh.3 for first 0km as minimum fare, and thereafter Dh.1.6 is charged per kilometer within Dubai. There are also abras, or water taxis, and car lifts. Some residents will even choose to rent a car paying a monthly average, while also saving money to buy a car. Usually, those who own cars help to transport friends and officemates to and from work.

Gasoline is fairly cheap in Dubai, so those who can afford to buy a car and can obtain a driver's license will do well to buy a vehicle. Ordinary second-hand cars go for around Dh.15,000 to Dh.50,000 and a brand new car will range anywhere from Dh.40,000 to Dh.300,000. Despite the work-hour commute, owning a car is definitely an advantage in Dubai. A car is the fastest, cheapest and simplest way to get around town.

For those of us in the UAE complaining about the rising cost of vehicle ownership thanks to two new tollgates coming up in mid-April, here’s some news.

The UAE boasts of the fifth cheapest petrol prices in the whole wide world – The price of 1 litre (1/4 gallon) of gas in Dubai is Dh.1.75.

Dubai ranks a modest 230 out of 300 international locations in terms of cost of transportation for public transport, vehicle costs, vehicle insurance, vehicle fuel and maintenance including hire/purchase/lease of vehicle/ public transport service maintenance, petrol/diesel, and vehicle purchase.

Accommodation cost in Dubai

This is possibly the largest single expenditure to be considered, as real estate in Dubai is a booming business, and because Dubai has a high demand for accommodation, villas and flats and residing quarters have become a scarce resource. As a result, rents and costs related to housing have gone up considerably in recent years, given the surge in businesses, the expatriate influx and the increased demand for accommodation.

Many share a flat for practical reasons. Sharing rent certainly helps in coughing up the required payment of deposits and advance rentals, as it is shared between individuals. Flats are fairly common among single individuals.

Expatriates with families, or singles who can afford to pay the rental of a flat/villa/apartment, or those entitled to housing allowance, have a range of options to choose from, including studios, single, double, triple bedroom apartments, and villas, depending on the budget allocated. Housing rentals, of course, will vary depending on the location, be it Deira, or Bur Dubai or Jumeirah.

House Rental Costs

The average rentals are in the following ranges (these are approximate figures):

  • Average rental for single bedroom unit in prime location – Dh.50,000 to Dh.100,000 (location based)
  • Average rental for double bedroom unit in prime location – Dh.70,000 to Dh.150,000 (location based)
  • Average rental for studios – Dh.30,000 to Dh.70,000 p.a. (depending on location)
  • Average rental for villa – Dh.130,000 to Dh.400,000 per annum depending on location

Food Cost in Dubai

Despite inflation and the bad state of affairs of the world’s economy, the cost of food is relatively inexpensive in Dubai. In fact, food is a wonderful experience in Dubai. Not only is it inexpensive, but because of Dubai's international population, a wide variety of authentic dishes from all over the globe can be found - everything from Indian Biryani to Italian pasta. At the same time, expatriates can find often find many of their favourite dishes from their home countries.

Dining out at Dubai’s premium restaurants is expensive as expected, but there are many restaurants that offer delicious dishes for a reasonable Dh.35 to Dh.95 per person. Still, if you want to eat on a smaller budget, cook at home during the week and reserve eating out for the weekends.

Education Cost in Dubai

The costs of education are high in Dubai. Relocating to Dubai with children of school age may prove to be a challenge if salaries are insufficient to meet educational needs, while also meeting demands of a cosmopolitan lifestyle. Typically, private schools that are run by American and British nationals usually have high fees while a few other schools, operated by Asians, are comparatively more affordable.

The directories and profiles of several private schools in Dubai are available online, and it would be good to research few private schools in Dubai before relocation. Further, be aware that a hike in tuition fees can be expected at any time.

In general, grade school tuition fees range from Dh.10,000 to Dh.100,000 for a full school year. Children are expected to learn conversational Arab language as to communicate with other kids and to become familiar with the culture of Middle East. Therefore, it may be necessary to hire a part-time tutor as well. The standard rates are not set so this expense will depend on one-on-one negotiations between parents and tutors.

Though seemingly high, the cost of education: pre-school fees, crèche, high-school and college and tertiary study fees in Dubai is still comparatively lower to several other cities, ranking 259 out of 300 international locations in the cost of living index.

Communication Expenses

Dubai has a modern communications infrastructure. The cost of home telephone rental, call charges, service provider fees, internet connection, mobile/cellular phone contract, in comparison to other cities is moderately expensive. Dubai is ranked 167 out of 300 international locations in the cost of living index 2012. Within the Emirates, calls are either free and calls outside of the Emirates have very low fees. Monthly telephone calls, including a mobile or a landline, could range anywhere from Dh.100 to Dh.1000 within UAE, depending on usage.

Groceries and Utilities Expenses

The costs of food, non-alcoholic beverages and cleaning material items, including baby consumables, canned foods, baking, baked goods, cleaning products, cheese, dairy, fresh fruits, vegetables, pet food, ready-made meals, snacks, seafood, spices and herbs are expensive in Dubai, in comparison to other cities and ranks 92 out of 300 in cost of living index.

The majority of goods in Dubai are imported from the country of manufacture, so expect to pay 20 to 50 percent more for goods that you would normally find on the grocery shelves of your home country, to offset the small amount of Dubai import duty that is levied on these goods.

As for household costs, water, electricity, household gas, household fuels, residential taxes on house/flat mortgage, house/flat rental, and local property taxes, these are more expensive than other cities, ranking 33 out of 300 in the cost of living index.

Clothing

Though duty-free, the costs of clothing and footwear including business suits, casual clothing, children clothing, hats, evening wear, inner wear and accessories is comparatively expensive, ranking 11 out of 300 in the cost of living index. Dubai is a modern city; expect to find a wide range of fashions and accessories including Western styles.

Healthcare

Dubai is focusing its resources to develop a world class healthcare infrastructure. Currently, the cost of healthcare in Dubai is quite high but it is hoped to become less expensive in future. 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 relatively more expensive in comparison to other cities.

Furniture and Appliances

The cost of household items and equipment rank 175 of 300 on the cost of living index. Expect to find all of the modern amenities of a big international city: furniture, household appliances including iron, freezer, fridge, toaster, kettle, light bulbs, television, vacuum cleaner and a washing machine, but also expect to pay more than you might be used to.

Recreation

Expenses related to leisure and socializing are expensive, as Dubai is an international business, entertainment and sports hub for the region. Businessmen and professionals often dine out after work, or have drinks, continuing to network and solidify dealings. Also, the cost of books, cinema tickets, DVD, CDs, sporting events, and theatre tickets for example, are comparatively more expensive than elsewhere. Dubai is geared toward the young and energetic, and like any major city, the finer things of life will come at a premium.

Miscellaneous

Miscellaneous costs pertaining to general goods and services, including domestic help, linens, dry cleaning, office supplies, postage, newspapers and magazines are all quite high in Dubai. Also, the cost of personal care products including hair care, cosmetics, sun block, moisturizers, over-the-counter medicines, toothpaste, and shampoo and such products are all equally expensive on an average in comparison to other cities, ranking 128 out of 300 in the cost of living index.

Hopefully, this will give you a general idea of the costs for relocation to Dubai. Dubai is an exciting modern metropolis, where just about everything that is available, if you can afford it.

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