The cost of living in Dubai is not very much different compared to the United Kingdom. Expenses on housing, commodities and services are high but there is some compensation since there is no personal tax. This has been curbed though by the increasing housing prices in the kingdom as well as inflation running at 10% in 2009.
Dubai is a very rich Middle Eastern country due to the high revenues generated from petroleum and natural gas industries. The economy is estimated to be worth over 40 billion euro due to tourism, business and the Jebel Ali free zone authority or JAFZA.
The booming business areas and job opportunities have attracted people from all over the world. Around 800 immigrants enter the country every day to seek greener pastures and to avail of the many privileges that Dubai offers its citizens. Oil and natural gas may be abundant in the country but it only covers 3% of total sales.
Jebel Ali boasts having the largest harbor in the world that welcomes transactions, trades and business of all types. In the capital city, several zones are categorized according to industries. The Dubai Financial Market or DFM was also established which gave the nation a solid foothold of in marketing and capitalization.
Food and Drinks Costs in Dubai
An individual expatriate will spend around 500 euro on food and other grocery items every month. Costs of food products are especially high especially in downtown areas. Water is generally expensive all across the country. Local wine and other beverages are manufactured or imported from nearby Middle Eastern countries. As for meat products, Dubai exports camel and lamb meat. Agriculture and brewery are not the main strengths of the nation although there are a few of these presently doing business.
Dubai relies mostly on imported food and drinks, which explains why they are also more expensive. Any food item found in the United States, United Kingdom and Australia is usually found in most establishments downtown. Australia alone reported to have generated sales amounting to 130 million dollars due to the export of oyster and other seafood to Dubai.
Seafood is widely popular among the locals and is generally expensive. Canned and pre-packed goods are not usually preferred. Herbs and spices are grown in nearby provinces or traded from Egypt. If acquired locally, fruits and vegetables are affordable. As reported Dubai Expat Forum last 8 July 2009:
Alcohol is available in hotels, as well as bars and restaurants with a link to hotels. Also a handful of private members clubs. To buy alcohol in a shop you will require a licence. An application form can be obtained in any branch of A+E or MMI, the two main outlets that have branches across the city. You will require a NOC from your employer and proof of residency and income. Your purchasing limit is linked to your salary. Married women cannot obtain their own licence, but may use their husband’s.
It is illegal to have alcohol in your home if you do not have a licence. Muslims cannot get alcohol licences, no matter where they are from.
There is a 30% tax on alcohol in Dubai, so many people travel to other emirates to shops where this tax is not charged. Take care though, as it is illegal to transport alcohol across Sharjah (the only route) without a license.
Many medicines that are freely available in other countries (codeine for example) are banned or restricted. DO NOT attempt to bring in any banned medicine as the penalty can be severe
Clothing and Accessories Costs in Dubai
Dubai also exports clothing and textiles like wool and cotton. There are several fabrics, materials and accessories sold by local makers that cost fairly average. Buying in malls and department stores typically amounts to around 200 euro per individual every month.
Designer labels are also rampant and almost all of the major brands are available in most downtown areas. Dubai invests so much in foreign clothes and accessories to boost its tourism status. Expatriates will most likely find prices very much the same as the ones in the UK or slightly more expensive. It is a shopper’s paradise with over fifty shopping centers and a great number of shops for many items at tax free prices.
People spend so much on footwear in Dubai. In the past three years, over 50 million euro was attributed mainly to footwear sales. In terms of accessories, foreigners and locals also spend a lot on jewelry and precious stones. The materials for jewelry are imported but manufacturing is done locally. All across the country, expatriates will find several multi-branded boutiques, jewelry stores, designer shops and department stores with various labels. The bottom line is, clothing and accessories do not come cheap in Dubai.
Housing Costs in Dubai
It is quite difficult to independently own land in Dubai. Expatriates need to invest almost one million euro in order to legally own decent property with full documentation. The government is very stringent when it comes to land ownership and it can take a very long time before ownership is finalized. Most people will prefer apartment rentals instead since these are less expensive and easier to maintain.
Prices will inflate or deflate depending on the quality and condition of the place. A single bedroom apartment will have a rental fee of around 800 euro every month. Bigger villas cost around 2,500 euro every month. If the place is furnished, tenants will have to add another 25% to the total.
All of these include utilities, home maintenance services and laundry. Although personal tax is nonexistent, refuse collection and road maintenance charges can be asked. Gas consumption rates are typically low due to the abundance of petroleum. On some occasions, the landlord pays for refuse collection and road maintenance fees. One of the main issues in Dubai is the lack of low-cost housing that has triggered a price bubble on existing properties and prices can double overnight.
Services Costs in Dubai
Dubai gives a lot of financial support to healthcare and house helper services. Full or partial rehabilitative and medical care expenses are subsidized by the government. Several of the locals also have at least one housemaid. Several millions of euro every year goes to the workforce fund. Most house helpers are of Southeast Asian descent.
As for transportation services, Dubai boasts of having several of the world’s best services. Dubai International Airport serves almost 30 million passengers each year. A lot of funding is allocated to the construction of the new Dubai World Central International Airport and the Dubai Metro that caters to downtown travelers and tourists.
Dubai also cares a lot about the education of its citizens. There are 88 public schools and 132 private schools in the area. Some of these are affiliated with major Western universities like Harvard providing further educational opportunities and post-graduate studies for scholars. Around 10% of the population holds degrees. Expatriates usually send their children back to the UK for university.
On the other hand, Dubai still ranks as on of the highest services cost in the world with among the priciest restaurants and meals in hotels as surveys indicate. This is due to the inflation that has put a higher price tag on living in Dubai.
Employment Costs in Dubai
Dubai reportedly has the highest employment rate in the world. At 97.4%, the workforce is at an all-time high. One-third of the population earns around 6,000 euro every month. 20% of the population earns less than 2,000 euro every month while only 5% earns over 120,000 euro every month. Health insurance is provided to every worker by the government in addition to other benefits like gas consumption, home maintenance and children’s education.
Some of the jobs in demand at present cover engineering, mining, oiling, health care, construction and architecture. Household helpers continue to stabilize in their numbers. Working contracts are maintained by employers for at least two years. There are several job openings provided for foreigners including other benefits like traveling allowance and transportation. The current financial crisis as well as the current policy of Emiratisation has put pressure on the labor force in Dubai. As shared by an expat in August 8, 2009 at the Dubai Expat Forum:
Everyone’s experience is different. Some adjust to life here easily and enjoy it, others never settle and are unhappy. Ideally, everyone would come over for a few days orientation to get a feel for Dubai before making a decision.
In the current climate do NOT move here without having a job secured. Without a job you cannot obtain a residency visa, rent a home etc. There are IT jobs but for a ‘Western’ salary your husband will have to be senior management level or above. Radio/music is probably one of the hardest areas to get into so be warned. Stations are run on a shoestring and music is a fledgling industry compared to many places.
Whilst construction & property have been the worse hit, there have been knock on effects in many areas. The UAE has been hit by the global recession as has just about everywhere else.