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 latest cost of living survey by Mercer concludes that UAE is now more affordable for expats as it solidifies its proposition to attract top global talent. With the pandemic having shaken up Mercer’s 2021 Cost of Living City ranking, Abu Dhabi and Dubai are now becoming less expensive in comparison to global peers.
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.
As per Mercer’s 2021 Cost of Living survey, Dubai ranks 42nd and Abu Dhabi 56th as they move significantly in their rankings in comparison to previous year, by increasing attractiveness and affordability of the UAE for global talent.
The results indicate the commitment by the UAE implementing policies that support in mitigating the impact of Covid-19 pandemic, together with its eagerness to draw in top global talent into the country.
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.
Here’s the average cost of living in Dubai, arrived at by deep diving into four main categories: housing, transportation, education and healthcare.
Dubai has become more affordable in 2021 owing to consistent decline in rentals, property prices, educational expenses, transportation and dining out. The Numbeo data shows that average cost of living for a single individual fell by 89.2 percent in 2021 in comparison to 2020, while for a family of four, the estimated cost of living reduced by 32.6 percent.
The cost of living for a single person as estimated in 2021 is Dh.3435.71, while for a family of four it is Dh.16,478.
Housing / Rental Cost in Dubai
The residential cost will depend on where you prefer to live, and will also depend on where you do your business.
The residential rent for a single bedroom apartment in City Centre is Dh.5,528.50 (USD 1505.28), while that for a single bedroom outside City Centre is Dh.3687.32 (USD 1003.95).
The average rental for three-bedroom apartment in City Centre is Dh.10,799.55 (USD2940.41), while that for outside centre is around Dh.7490.97 (USD2039.58).
The Jumeirah Lakes Tower (JLT) is one of the most popular residences in Dubai, especially among expats, followed by Dubai Marina, Dubai’s Old Town, Jumeirah Beach Residence etc., with comparatively similar rental prices.
Rentals in these locations are however comparatively expensive in comparison to rest of Dubai, with average rental price for a single bedroom apartment in JLT being around Dh.66,236 (USD18032.23) annually or Dh.5,519.66 (USD1502.68) per month. Still, expats prefer to live here, as it suits their needs.
Another expense that would fall into the housing category is the service of domestic help, which would average at Dh.2700 (USD735) per month, or a part-time domestic help may charge around Dh.390 (USD106) for a three-hour service per month.
Cost of Education
Although expat kids are allowed to attend public and private schools in the UAE, they should pay fee irrespective of which type they select, as free government school is available for only Emirati nationals.
The average fee for a single child when joining a full day private kindergarten could be in the range Dh.1200 to Dh.4000 monthly.
For expats in public schools the annual tuition fee has been capped at Dh.6000 (USD1635) annually.
Dubai has more than 200 private schools servicing about 300,000 Emirati and expat students. However, Dubai has implemented annual tuition caps forbidding schools from increasing rates unreasonably every year. On an average, international school fee ranges from Dh.12,723 to Dh.64,093 annually.
The school fee can vary depending on location of the school and other such aspects.
As for universities, Dubai has over 65 colleges catering to both national and expat students. But, public universities in Dubai use Arabic as medium of teaching, while private universities use English to converse.
The average cost for an undergraduate degree is Dh.173,400 or Dh.54,800 to 82,200 (USD14919-22,379) respectively.
Transportation cost in Dubai
Driving is the easiest way to get around in Dubai, thanks to cheap, fuel prices. However, traffic congestion levels in Dubai are very high, and hence wading through traffic during peak hours of the day may seem difficult.
The cost of purchasing a car depends on the condition. For instance, the 2018 Toyota Corolla is the most commonly driven car in the UAE, and is worth Dh.70,900. When buying a used car, depreciation takes 20 to 40 percent off the total price of the car.
As for the price of gasoline in Dubai, it costs Dh.1.79 per litre, while the worldwide average is Dh.4.33 per litre.
Average transportation fares / prices in Dubai are Taxi fare Dh.2.44 (USD0.66) per km, Bus fares Dh.5 (USD1.4) for single ticket, for buses (monthly pass) Dh. 300 (USD81.67) and Average price of 1 litre petrol is Dh.2 (USD0.54).
Public transportation is probably the best thing to opt for if you have to commute daily to and from work. The two Dubai Metro stations make it very easy for employees, visitors and residents to access areas in the premium district, DMCC. There is a bus service that travels around the community with stops throughout.
Dubai Healthcare expenses
The Dubai Health Authority has introduced new rule, wherein all residents, including expats are required to have medical insurance. While locals can be covered under the government-funded scheme, expats will be covered under private health insurance schemes, generally purchased through their employers.
Among the seven emirates in the UAE, Dubai is considered to have the best healthcare system. As an expat, you are eligible to avail public or private healthcare facilities.
Majority of expats living in Dubai, opt for private healthcare facilities primarily because of English being spoken commonly here, as majority here are foreign doctors. While Dubai offers free medical public facilities for locals, expats can avail a discount of 50 percent through their health card.
The fee for healthcard is Dh.120 (expat fee upto 10 years), Dh.320 (USD87.12) is expat fee for 18 years and above, Dh.25 (USD6.81) is fee for nationals up to 10 years and Dh.120 (USD32.67) is fee for nationals 18years and above.
The said fees are one-time payments for obtaining a health card.
Although the entertainment expenses do not categorize as major contributor when considering cost of living in Dubai, it would be helpful to be aware of cost involved in basic entertainment.
For instance, basic dinner out for two in neighbourhood pub averages around Dh.170, Tickets to the movies for two (Dh.85), 2 tickets to the theatre for best available seats (Dh.544), dinner (incl. appetizers, main course, wine, dessert) for two at an Italian restaurant in expat area (Dh.324). However, not all entertainment come with a price. While in Dubai, you can also enjoy several free attractions such as beaches, parks, malls and historical areas.
To conclude, Dubai is among top contenders for cities to live-in for expats, but is also one of the most affordable good destinations.