Cost of living in the UAE
Cost of Living in Dubai and Abu Dhabi
One of the most topical subjects regarding the UAE concerns the cost of living. The Economist Intelligence Unit placed Dubai and Abu Dhabi in the
top twenty most expensive cities in the world to live and Mercer HR Consulting placed them at
at a similar level respectively. The cost of living in Dubai has increased
rapidly, and the same has occurred in Abu Dhabi more recently. There used to a point in time where Dubai was a lot more expensive to live than in Abu Dhabi, but that is probably different and what you could say about Abu Dhabi is that it is less easy to live as cheap as you potentially could do in Dubai, predominatly due to location and where you can live. That said, living in Dubai is now out in "new Dubai" where all the sky high towers require you to have a car to drive into town. So, it's less easy to live without a car, for example, in Dubai. But with Abu Dhabi spreading out pass Khalifa A and B and onto the expensive luxury islands, whether Abu Dhabi or Dubai is more expensive really depends on who you are.
The cost of living may have reached a level with regard to goods but will continue to increase over the coming years, even with rental dropping in Dubai. A lot depends on demand by the expatriate community and how much landlords are able to charge. While rent, on its own, should account for at least 50% of your cost of living (though official cpi figures place it at between 30% and 40%), we felt it important to look at other goods and services available. We have thus put together a spreadsheet of data so that you are able to pick out your own cost of living, should you come to the UAE.
There are numerous cost of living indicators available, including those of the Economist and Mercer which are notable for providing cost of living comparisons between baskets of goods internationally. Although this is particularly useful, we have gone out on the street to find out actual prices of certain goods and services, so that you are able to compare against actual products in your home countries. These providers, although far superior in their offering, charge an arm and a leg for their information. While most cost of living surveys charge for such data, we at Grapeshisha have provided all the relevant information that we have obtained in a spreadsheet and offer it to you for free to help you make your decisions. We provide this data with a disclaimer that the information is intended to assist you in making your decisions, but that you should not base all your decisions on any sole resource. Ask around, and come and check out the cost of living yourself before making life changing decisions.
The cost of living in Dubai and Abu Dhabi is relatively expensive and can be equated to other large cities in the world. That being said, it it possible to make smart choices on some elements of goods and choices of lifestyle to reduce your overall cost of living. The cost of living in Abu Dhabi, as mentioned earlier, is similar to that of Dubai, but seems to skew at different points, especially if you look at rental prices. If the Dubai cost of living is a big factor for you moving here, you really need to factor in inflationary factors, across the board of at least 5% to understand how much life will be over a period of time. Some say that percentage is low, and you really need to look higher to be safe to understand how much it will actually cost. Think about your lifestyle, and the lifestyle that you aspire to. Will you be able to afford to live here on the salary that you may be offered. Are you in Dubai to save money? Are you in Abu Dhabi for a lifestyle that doesn't yet exist? Or are you moving for the long term? All of these questions are ones that you really need to ask yourself, prior to making the jump. It is possible to get rich in this part of the world, though it is probably a little more difficult than it was! That said, if you want to be in with a chance of finding that opportunity with your new service based startup or your niche re-export business, you need to be able to stay in the game.
Our fieldwork was carried out during 2009 and 2010 with additions ongoing from that point on. This involved obtaining actual prices from a number of institutions and calculating a simple average. Where price from only one establishment was available, this price was provided. We have been especially careful to obtain actual prices which are indicative, and can thus be used as a comparison. Where highly skewed data with a differential of more than 50% from the other data was obtained, it was discounted and removed from the overall average.
With regard to consumables and groceries that were obtained from the supermarkets, the following, in general, applies: Spinneys and Abela are considered high end and provide like for like products available at supermarkets in the UK. In general, these products are more expensive, but some argue that their quality warrants the price; Carrefour, Geant, Choithram and the Co-operatives offer a wide choice at a reasonable price
Prices were gathered from a variety of institutions including those listed above. We chose a variety in our selection of institution, including smaller street shops, only in the instance when the price did not unduly affect the overall average significantly, so that the reader can make the decision on product choice, and opt for the higher or lower price when comparing. This differs from other cost of living comparisons since, typically, they only use retailers who provide all of the products in one outlet. We believe that this is non indicative and this is where our methodology differs. Further, we aim to provide additional comparisons in the future, by supplying low cost non brand alternatives to the brands that are listed, to give further choices in calculation. It should be noted that there may be instances where low end stores will charge higher than high end store, and there may also be instances where comparisons are not available. Finally, it should also be noted that a large number of goods are imported to the UAE and so these charges may be passed down to the consumers. Despite this, the choice in product is particularly diverse. Goods arrive from Europe, the Far East, the US and the other Gulf Countries to satisfy the different nationalities that live here.
While groceries involved the greater amount of time with regard to data collection, we have provided other indicatory prices for groceries, entertainment, white goods and electrical, utilities, services and transport. These have primarily been provided for data purposes, although in certain cases, the choice may be subjective. In this instance, the prices have been provided to understand at what price it may be possible to purchase. Highly subjective items such as clothing, for example, have not been included as part of this exercise.
Fluctuations occur frequently for a number of reasons, notably: price setting by governmental associations, seasonal fluctuations, shortage and oversupply of goods and the strength of the Dollar. As many goods are imported to the UAE, shortage in a certain product can lead to temporary imbalances. Some products may be banned, which notably happened to Danish products for a period of time, which will affect the price of equivalent products. Further, the UAE Dirham is tied to the US Dollar at a rate of 3.6725, and so any reduction in strength of the dollar reduces the purchasing power of the Dirham directly. For reference, all prices quoted in the spreadsheet are in UAE Dirhams. You chould check your local cuurrency comparison with the Dirham, be it Euro, Pound, Rupee or otherwise.
All data is Dubai and Abu Dhabi specific, although in less than 10% of cases fluctuations occur in groceries that amount to approximately a 5% price reduction in Sharjah, Al Ain, and the other Emirates. Big city prices are obviously more expensive than the outskirts. Dubai is predominatly constant in itself, but prices do vary across Abu Dhabi, due to its scale, and prices elsewhere in the UAE are demand related. These fluctuations should perhaps not be considered worthy as changes are ongoing. If you are going to be conservative, take the high end figure, and maybe add 5%.
How to use the Data
Since we have not indexed the data, it is therefore necessary for the reader to carry out comparisons themselves based on their local data. From speaking to a number of individuals, it seems easiest to note down the groceries consumed on a monthly basis and simply calculate the cost of purchasing the goods at Dirham prices. With regard to start up costs, estimations should be made, based on the data that we have provided. We have not included location specific information, such as initial shipping costs, since they would vary from city to city.
The Cost of Living in Dubai Spreadsheet
The spreadsheet is not intended to assist companies in composing compensation schemes, but is merely an information source for those considering to stay in the UAE for a period of time, to give a general indication of what certain goods and services would cost.
Feel free to spread the word about this Cost of Living spreadsheet with friends and colleagues who are looking at the cost of living in Abu Dhabi or the cost of living in Dubai. If you do have updated that you believe are useful, do get in touch, especially if you believe that the data is wrong. If you wish to share the data on the net or elsewhere, please provide full attribution and a link to http://www.grapeshisha.com. If you wish to use it for commercial purposes, we would require a small license depending on use. If you have any suggestions, additions or corrections please contact us.
Any update to the spreadsheet will be updated to this core data. Click on fullscreen and zoom in, using your right mouse button, to see the detail. Cost of Living in Dubai and Abu Dhabi 2010