Dubai Beats Abu Dhabi To Become The UAE’s Most Expensive City – Mercer

Dubai has beaten Abu Dhabi to rank as the most expensive city in the UAE for expatriates, according to a new survey by HR consultancy Mercer.

Dubai ranked 67 on Mercer’s 2014 Cost of Living Survey, up 23 spots compared to its 90th position last year, while Abu Dhabi ranked 68 this year, up 11 positions from 79 in 2013.

Nuno Gomes, principal, Information Solutions Leader Middle East, Mercer said: “Dubai is now on a strong economic hub following the global market depression of 2008 and this renewed economic strength is reflected in an increase in accommodation costs, which is the main reason why the city has jumped so many places.

“The steep rise in rental prices is a phenomenon witnessed over the past 18 months and can be traced to a renewed sense of confidence in the city, particularly in the wake of the Expo 2020 build-up and award.

“The situation will stabilise as we start to see more and more of the building projects that have been restarted after being put on hold come on line,” he added.

Most cities from across the Middle East region have gone up in the 2014 ranking, mainly due to global currency fluctuations and other locations’ decline, said Mercer.

Beirut topped the regional index for the highest rates of living expenditure incurred by expatriates, coming in at number 63.

Riyadh ranked 111, up 11 spots from last year, while Jeddah – the only other non-capital city in the ranking apart from Dubai – continues to rank as the least expensive city in the region, at 175.

Mahmoud Ghazi, Information Solutions leader for Saudi Arabia, Mercer said: “Jeddah remains a less explored destination for international assignees and expatriates in general, which makes it very affordable.

“When it comes to Riyadh, despite its rise of 11 places in the ranking, it still remains a relatively cheap location for expatriates. Most consumer-spending is actually quite affordable when comparing to the rest of the region, such as supermarket or food away from home, but the compound type of accommodation keeps Riyadh’s ranking at a higher level.”

Overall, two African cities topped the list of most expensive cities for expatriates, with Luanda in Angola emerging first for the second year in a row, followed by N’Djamena, Chad.

Hong Kong came in third place, followed by Singapore, Zurich, Geneva, Tokyo, Bern, Moscow, and Shanghai.

Karachi, at 211, was ranked the world’s least expensive city for expatriates.

Mercer’s annual survey measures the comparative cost of over 200 items in each location, including housing, transportation, food, clothing, household goods and entertainment. New York is used as the base city, and currency movements are measured against the US dollar.