Dubai, Abu Dhabi now more affordable for expats as cost of living eases


Dubai and Abu Dhabi became even more affordable cities for expats in 2020 as the cost of living dropped in both the emirates.

According to Mercer’s 2020 Cost of Living survey of 209 cities released on Tuesday, Dubai’s ranking slipped from 21st to 23rd while Abu Dhabi fell from 33rd place to 39th.

Dubai remains the most expensive city in the Arab world, but Riyadh overtook Abu Dhabi to take the second place in the latest ranking. The Saudi capital is ranked 31st as compared to 35th last year. Cairo, ranked 126th, remains the least expensive city in the region despite rising 40 places in the ranking.

“Since the beginning of 2019 we have been witnessing a continuous deflation across Dubai and Abu Dhabi. Expatriate accommodation is cheaper. This deflation reflects the drop in ranking of both Dubai and Abu Dhabi, making them cheaper than the years before,” said Vladimir Vrzhovski, Global Mobility Practice Lead, Middle East and Africa at Mercer.

“Attracting highly skilled talent is going to play a crucial role supporting the road to recovery and accelerating the economic diversification of the local economies. The balance between an affordable cost of living, high quality of living and competitive salary packages, will support the aim of the governments to develop their city attractiveness proposition and keep their brand as highly attractive cities for expatriates and businesses in the region as well as globally,” he added.

The UAE continues to diversify the economy, subsequently reducing the impact of oil industry on GDP. With this ongoing process, there has been negative price movement in both Dubai and Abu Dhabi. Just like UAE, Saudi Arabia is seeking to limit the impact of oil exports and move to a more diversified economic model. Prices have remained stable over the course of the last six months; however, with the upcoming value-added tax increase, there is an expectation to see prices change.

Global rankings

According to Mercer’s 2020 Cost of Living Survey, Hong Kong tops the list of most expensive cities for expatriates, followed by Ashgabat, Turkmenistan in second position. Tokyo and Zurich remain in third and fourth positions, respectively, whereas Singapore is in fifth, down two places from last year.

New York City ranked sixth, moving up from ninth place. Mercer’s data was collected in March; price variances in many locations were not significant due to the pandemic.

Other cities appearing in the top 10 of Mercer’s costliest cities for expatriates are Shanghai (7), Bern (8), Geneva (9), and Beijing (10). The world’s least expensive cities for expatriates, according to Mercer’s survey, are Tunis (209), Windhoek (208), Tashkent and Bishkek, which tied to rank 206.

“Border closings, flight interruptions, mandatory confinements, and other short-term disruptions have affected not only the cost of goods and services, but also the quality of living of assignees,” said Ilya Bonic, Career President and Head of Mercer Strategy.

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