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 destination for expatriates. There is no tax on salaries and valude 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 2014 by Mercer, reveals that Dubai ranks 67th, which is 23 places higher than its 90th rank last year. Dubai is considered as the third most expensive city in the Middle East, after Tel Aviv (18th) and Beirut (63rd) positions. This increase in ranking is largely due to huge rental costs in the city.
According to the Dubai Statistics Centre figures, prices in October last year grew by 4.4 percent, the highest rise since May 2009. The price hikes are particularly evident in ‘rent’ and ‘food’ sectors. Housing and utility accounts for about 44 percent of average consumer expense in Dubai. This has grown by 6.7 percent last year, while the food and drink prices have grown by 4.7 percent. According to Reuters, this may continue into 2015, and overall inflation is likely to grow another 3 percent.
Therefore, 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.