Dubai third most expensive expatriate city in the world, new study says

Dubai is the third most expensive expat destination in the world out of 13 countries and the most pricey in the GCC, according to a new report from Swiss bank UBS.

The city took third position on the ranking with expat families spending $5,857 a month in Dubai – with $1,311 going on basic expenses and $4,546 going on expat extras, according to the bank’s latest Prices and Earnings report.

Steve Cronin, the founder of, said Dubai’s high ranking is “mainly due to the impact of expensive rents here”. Of the $4,546 spent on expat extras, $2,746 was just for accommodation.

“Other expenses in Dubai are on par with Hong Kong, Amsterdam, Brussels, Toronto and Frankfurt,” said Mr Cronin.

Geneva took the top spot in the ranking of 13 cities with expat families there spending $6,327, while Brussels came in second at $6,159. The least expensive city for expats to live in was Mumbai at $2,338.

The study analysed how much a family with children would spend during one month abroad, rounding up local “basic expenses” such as food, household goods and clothing. Local “expat extras” include rent in a two-bedroom furnished apartment, school tuition, household help twice a month and a language course.

The study comes at a time when UAE residents are struggling with the rising cost of living. Data released in April by the Statistics Centre – Abu Dhabi found that consumer prices rose by 2.7 per cent in the first quarter of 2018 compared to the same period the previous year. Drivers are facing another rise in the cost of petrol in June after Enoc announced the cost of Special 98, Special 95 and diesel will all rise by almost 6 per cent, a similar figure to May.

Despite being an expensive expat destination, Dubai came in 14th position on UBS’s purchasing power index – a separate ranking of 77 cities around the world. The index compared 128 prices of various goods and services with the average earnings of 15 professions across all nationalities, such as a bus driver, a construction worker, a sales assistant and a doctor. All cities are benchmarked against New York, which is indexed at 100.

The higher up the ranking of earnings versus prices a city is, the more people living there can afford.

Los Angeles boasts the world’s best buying power for the average worker’s salary, with residents there able to afford almost a quarter more than New Yorkers. Zurich took second position, while Miami came in third.

In the GCC, Dubai rose 12 places to achieve its 14th position, while Bahrain’s capital Manama took eighth position and Riyadh, which was added to the index for the first time, came in at 24th position.

“People living in the UAE may be shocked to see Dubai climb up the rankings so fast, given every year here feels more expensive. But Dubai has risen in the index from 27th in 2015 to 14th in 2018, because the cost of goods in other cities has risen far faster while Dubai salaries have increased,” said Mr Cronin.

Daniel Kalt, chief economist and chief investment officer for Switzerland at UBS Global Investment Wealth said GCC cities’ favourable buying power was because of the low taxation levels for residents.

“If you look at net wages, cities in the region make a pretty steep jump up the ranking because income taxes and social security contributions are much lower compared to many developed or industrial cities,” he said. “For some European cities such as Belgium or France, you can see that wages are cut in half if you look at them on a net basis and that of course leads to cities with low taxation making a big move up in the ranking.”

Dubai is slightly more affordable when it comes to millennial must-haves. While Netflix will only cost you $7.99 in Dubai, it will set you back $11.90 in Switzerland. An iPhone will cost $1,212 in Dubai, but it shoots up to $2,242 in South Africa.

“Being a millennial in Dubai actually turns out to be less expensive than other major cities, primarily due to the lower cost of electronic goods and clothes, especially if you stay away from designer brands. Even avocados are quite reasonable – just cut down on coffee, which is the most expensive in Dubai at $5.70 compared to $1.49 in South Africa,” said Mr Cronin.

And if you want a bargain haircut in Dubai forget it, he said.

“Dubai is a terrible place to get a high-end haircut, especially for women, with the time worked to pay for a women’s haircut being ranked 71 out of 77 cities studied,” he said. “This may not reflect the stratifications in Dubai’s wages and cost of goods and services – if you want a bargain haircut in Dubai you can certainly get one, though you may not necessarily get what you wanted.”


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