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Expat Life

Cost of Living in Dubai

04 April 2019

A look at the latest cost of living update in Dubai will offer a better understanding for expatriates on the kind of life that awaits them in Dubai, and as an expat, it may help you in planning your finances in a smart and effective manner, taking into consideration not only the present, but also in being prepared for the future.

The tax-free system in Dubai and the extravagant lifestyle that it offers has made Dubai one of the most-attractive destinations for expatriates. There is no tax on salaries and Value Added Tax on commodities is very minimal. But, despite this, living in Dubai may still be a burden on your pockets.

The Cost of Living Survey for 2018 by Mercer reveals that Dubai has dropped in ranking from the 19th to 26th most expensive city, which indicates the decrease in cost of living in Dubai, in comparison to other cities in the world. Mercer is the leading provider of data on cost of living and housing for employees sent to work abroad. 

For instance, a litre of gasoline in Dubai costs USD0.61, while it costs about USD 0.70 in New York and USD 1.65 in London. Similarly, the rental for a double bedroom apartment of international standards costs USD2,995 in Dubai, while it costs an average of USD 5,700 in New York and USD 4,335 in London.

However, despite the drop in ranking, as far as Middle East is concerned, Dubai is still the most expensive city, followed by Abu Dhabi, Riyadh and Beirut.

One reason for the comparatively reduced cost of living is the depreciation of the USD and AED against several major currencies in the past year. Another reason is the constant decrease in rental accommodation. Rental prices generally contribute immensely in determining the cost of living for expats, particularly, the overall cost of living.

The comparatively low cost of living in Dubai, in comparison to other cities, makes it an attractive destination for expat employees. Today, the multinational organizations are realizing the importance of a mobile workforce to effectively deploy talent. Having a fair idea of the cost of living in each city is essential for assessing expat remuneration packages. Give, the low cost of living in comparison to various other major cities, the UAE continues to attract top talent from across the world, allowing scope for better economic growth and innovation.

Without having lived in Dubai, knowing how much of a salary you will need is difficult to determine, but, having a fair idea of the Cost of Living data forms the basis of compensation packages for international assignees. The main factors that affect the cost of living in Dubai are housing, food and transportation. Learn more about the trends and highlights in this year's ranking in Dubai.

Dubai cost of living

Housing / Rental Cost in Dubai

Given the constant high-demand for accommodation, villas and flats and residing quarters in Dubai, which has become a scarce resource, accommodation is possibly the single largest expenditure to be considered, as real estate is a booming business here. Therefore, cost of rentals, particularly housing, have surged in recent years, due to huge expat influx and increased demand for accommodation.

Bachelors mostly share a flat for practical reasons, as sharing helps in coughing up the required payment of deposit and advance rentals. Expats with families, or even bachelors who can afford to pay the rental of a flat/apartment/villa, or those entitled for housing allowance, have plenty of options to choose from, including studios, single, double, triple bedroom apartments and villas, depending on the budget allocated.

This may be the biggest expense to be considered, given the fact that, the real estate market in Dubai, are full of fluctuations, and rentals are rather expensive. With Dubai having witnessed exponential growth in the past few years, the rental prices have also grown considerably. As of 2018, the rentals in popular locations in Dubai are as below:

A single bedroom apartment in Jumeirah Lake Towers – Dh.80,000 to Dh.105,000 per year

Studio in Marina – Dh.70,000 to Dh.80,000 per year

Double bedroom apartment in Downtown Dubai – Dh.130,000 to Dh.160,000 per year

3 bedroom villa in Jumeirah – Dh.200,000 to Dh.300,000 per year

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.

You are free to choose your mode of transport in Dubai. First, determine if you need a car. But, unless you need one for work or if living far away from your workplace, wait for couple of months until you are well settled, before you buy your first car in Dubai. However, if you have a family, or if the car is required for your job, you can also consider renting a car for the initial few months to adapt to Dubai roads and driving habits. If you need to use a car as part of your work, mostly, it will be provided by the employer, and transportation expenses will be part of your package.

Taxis are widespread and are available 24/7. There is a metro card / tram / bus called NOL Card, rechargeable, allowing you affordable public transportation.

The fuel prices including VAT as of 2019 are:
Super 98 - Dh.2.23
Special 95 - Dh.2.11
Diesel price - Dh.249

One-way ticket for local transport Dh.3,00 to Dh.7.50
Monthly pass (regular price) - Dh.170 to Dh.350

Normal Taxi tariff  (starting rates) - Dh.5.25 to Dh.12.00
Normal Taxi tariff (1km) - Dh.1.24 to Dh.2.30
Normal Taxi tariff (one hour waiting) - Dh.12.00 to Dh.30.00

Food Cost in Dubai

The cost of food is comparatively cheap in Dubai. In fact, dining is a wonderful experience in Dubai, as apart from being inexpensive, the international population in Dubai cater to variety of authentic international cuisine from all over the globe, ranging from Indian Biryani to Italian pasta. Therefore, expatriates will not miss their favourite dishes from their home countries while in Dubai.

However, dining out at Dubai's premium restaurants is expensive as expected, but there are many restaurants that offer delicious dishes for a reasonable rate. There are two types of restaurants, one type which is located towards Old Dubai that are affordable and do not serve alcohol. The licensed restaurants located within five-star hotels in Downtown and Dubai Marina can be more expensive. Still, if you want to eat on a smaller budget, cook at home during the week and reserve eating out for the weekends.

If you are used to European and North American style of living, there are plenty of options in Dubai, when it comes to obtaining the basic necessities. Major supermarkets like Carrefour, Spinneys, Waitrose, and Choithrams may be found in major malls throughout Dubai, with prices more or less equivalent to the US or UK prices. But in Dubai, there is the added advantage of minimal value added tax.

Meal at an inexpensive restaurant for single person -Dh.12 to Dh.45
Three-course meal for 2 people at a mid-range restaurant - Dh.95 to Dh.300
McMeal at McDonalds or equivalent - Dh.12 to Dh.30
Domestic Beer (0.5 litre draught) - Dh.25 to Dh.50
Imported Beer (0.33 litre bottle) - Dh.40 to Dh.50
Cappucino (regular) - Dh.10 to Dh.24
Coke/Pepsi (0.33 ltr bottle) - Dh.2 to Dh.8
Water (0.33 ltr bottle) - Dh.1 to Dh.3

Groceries

500gm of boneless chicken breast – Dh.21
1 ltr of whole fat milk – Dh.6
12 eggs large – Dh.14
1 kg of tomatoes – Dh.7
500g local cheese – Dh.29
1kg apples – Dh.10
1 kg potatoes – Dh.4
1 bottle of red table wine – Dh.113
On the whole, expenses on groceries and food will largely depend on your food preference and lifestyle.

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.

One thing to be taken into account when school-hunting in Dubai, is the standard and quality of education. For instance, the most popular school usually has higher tuition fee. Hence, education is one of the heaviest financial burdens for expatriates in Dubai.

Other costs like registration and text books, apart from tuition fee are charged separately and are not taken into consideration here.

Generally, the school tuition fee varies largely depending on whether you want your children to study in a school with CBSE syllabus or an international school with American or British curriculum.

As of 2018, there are about 195 private schools in Dubai. The school fee broadly ranges from Dh.2479 per annum to Dh.130,000 per annum, excluding any other additional fees for admission, uniforms, transportation and books. 

Private Preschool or kindergarten, full day, for a child for one month - Dh.666 to Dh.3,500 per month

International primary school for a child, the fee ranges from - Dh.12,000 to Dh.55,000 per year.

More than half of school students in Dubai pay less than Dh.20,000 towards annual tuition.

Several expats, unable to bear the cost of education here, are even sending their children back to home countries for education.

One way to avoid huge educational expense is to choose schools where your company has a corporate seat, making fee much lower.

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. Within the Emirates, calls are either free and calls outside of the Emirates have very low fees
1 min. prepaid mobile tariff (local, without any discounts or plans) could range anywhere between Dh.0.1 to Dh.1.0.

Internet charges (60 mbps or more, unlimited data, cable/ADSL) Dh.250 to Dh.500. per month.

Grocery and Utilities

Dubai has a modern communication infrastructure. The cost of home telephone rental, call charges, internet connection, service provider fee, mobile phone contract are all moderately expensive in comparison to other cities.

The cost of food, non-alcoholic beverages, cleaning material items, including baby consumables, baked and canned foods, cleaning products, ready-made meals, seafood, spices and herbs are all expensive in Dubai. Majority of the goods in Dubai are imported from the country of manufacture, and hence you may end up paying 20 to 50 percent more for goods, than in your home country.

The Dubai Electricity and Water Authority (DEWA) is the government agency responsible for water and electricity utilities in Dubai, and the fee paid by expats to establish their DEWA in a new place depends on the kind of housing they have.

The basic utilities such as electricity, cooling, heating, water and garbage for 85sqm apartment can cost Dh.300 to Dh.1000 a month.

Clothing & Accessories

Although Dubai is duty-free, the cost of clothing and footwear, including casual clothing, business suits, children clothing, evening wear, innerwear and accessories are expensive in comparison to other cities. However, Dubai has a wide range of fashions and accessories, including western wear.

A pair of Levis 501 jeans or similar may costDh.100 to Dh.380
A summer dress in a chain store (zara, H&M) may cost Dh.60 to Dh.300
A pair of sport shoes like Adidas, Nike or the like will cost Dh.200 to Dh.450
A pair of leather business shoes may cost Dh.130 to Dh.500

When it comes to clothing and accessories, Dubai may be even a little more expensive than its neighbour Abu Dhabi.

Cost of Healthcare

You need to have insurance when in Dubai. While some companies allow you to choose your medical insurer, and offer some amount of contribution, others insist on using their group scheme. The same insurer may have different ranges of policy with different price tags, and you can choose from the. For a reasonably comprehensive medical insurance policy that permits worldwide medical treatment, you can expect it to cost you about Dh.10k annual. But, this should be ideally factored into your salary or paid by your company.

In Dubai, the cost of general healthcare, medical insurance, consultation rates, hospital private ward, daily rates, non-prescription medicine, private medical insurance, medical aid contributions, are all comparatively more expensive.

However, the lack of tax on your personal income, and the lack of need to make any contribution to UAE's social security and pension fund, helps in keeping down cost of living.

However, you may have to save some money for retirement provisions.

A basic consultation with a general practitioner or dentist is quite affordable at Dh.500. However this is exclusive of any other tests or treatment. In case of any serious accident or illness you need to have a good health insurance back up to make use of the private healthcare facilities in Dubai.

Expats living in Dubai can apply for a health card that entitles them to some free medical care, but, it is better to also purchase private health insurance, so that you are covered for all eventualities.

Family doctor check-up without insurance may cost you an average of Dh.270, with costs going up to Dh.400 for night time calls.

The Insurance premiums may range from  Dh.5500 per annum for a thirty year old on a comprehensive plan, while a young family of four on comprehensive plan may have to pay Dh.33,500 per annum, or Dh.17,000 for basic cover.

Furniture and Appliances

For majority of expats who stay in Dubai for short or long periods, there are ample ranges of budget to designer furniture to choose from. There is a huge selection of every type of furniture from household to office to outdoor furniture to suit your budget.

For several visitors who plan to stay here for short period of time, even second-hand furniture are available, which may help you to save money on furniture considerably. There are certain websites like Dubizzle and Souq.com that offers used items, or check the classified section on newspapers for second-hand furniture.

However, if you are planning long-term stay in Dubai, and have the necessary finance to invest in quality furniture, there are several high quality furniture stores, including boutique designer stores, although they come at steep price.

Recreation and Entertainment

Leisure and socializing are expensive in Dubai, as it is an international business, entertainment and sports hub in the region. Businessmen and professionals here often dine out after work. Compared to its other Arab neighbours, Dubai is more lenient on its rules on entertainment and has a better night life.

The average expenses for the following modes of recreation and entertainment in Dubai are:

Monthly fee at a fitness club for 1 adult - Dh.150 to Dh.500
Rental for an hour at Tennis Court on weekend Dh.90 to Dh.200
Dinner for two at an Italian Restaurant in the expat area, including appetisers, main course, wine and dessert - Dh.343
One cocktail drink in downtown club Dh.72
Cappuccino in expat area Dh.22
A beer in neighbourhood pub Dh.43

Miscellaneous

Cost pertaining to general goods and services, including domestic help, dry cleaning, linens, office supplies, postage, magazines, newspapers, are all quite high in Dubai.
Getting help around the house can be a blessing, particularly for working individuals. But, finding the right maid who fits into your household easily can be a challenging task, particularly when understanding the legalities and cost of hiring and sponsoring your own maid or hiring through an agency are involved. The minimum wages set by national embassies have to be followed. Moreover, if you are hiring a maid through agencies, you may have to pay agency fee ranging from Dh.6000 to Dh.10,000.

Also, cost of personal care products including cosmetics, hair care, moisturizers, sun block, over-the-counter medicines, toothpaste and such other products are expensive on an average in comparison to other cities. Hopefully, this will give you a general idea of expenses involves when relocating to Dubai.

To conclude:

Overall, it is not cheap to live in Dubai, but, to a certain extent it depends on your standard of living. The other factor to consider is the amount of support that your company offers you, like medical insurance, housing, children’s education etc. Hence, it is better to be informed of the cost of living when you are offered an employment, so that you can assess the value of your package more accurately. Also, do not forget to take into account a few extras like going out, shopping etc, to get an estimate of the salary you need to live in Dubai.

Robin Vinod

Writer/blogger who writes on topics such as travel, real estate, employment and everyday life on GCC countries

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