Dubai is famous as a playground for the wealthy. So when it comes to the cost of living in Dubai, the numbers fully reflect the perception – in 2016 Mercer survey ranked the cost of living in Dubai as 21st most expensive in the world. It is also the second most expensive city in the Middle East, after Tel Aviv.
If you are planning to relocate to Dubai for work (as most expats do), the first thing you should think about is what kind of salary you need to earn in Dubai to maintain your desired lifestyle.
To have an idea of the cost of living in Dubai you need to factor in housing, school fees (if you have children), healthcare costs, transportation, grocery shopping and going out. Knowing the cost of living in Dubai will help you negotiate the salary you need to live well. As there is no minimum wage in Dubai, your prospective salary and other benefits can be very much determined by your negotiation skills. Other benefits are housing, schooling and healthcare insurance for your dependents.
It is crucial to try and negotiate with your employer that school fees, accommodation fees and health cover for your family are included in your package. If you can do it, the cost of living in Dubai will seem very acceptable for you, indeed.
Housing. This is going to set you back the most. Buying property in Dubai will start from about £70,000 for a studio and about £90,000 and up for off-plan, one-bedroom apartments. The more elaborate the property, the higher the prices.
Rentals here are generally comparable with those in affluent Western cities – i.e. they are not cheap either. The latest update from Numbeo says that on average rent prices in Dubai are 4.61% higher than in London. Also expect higher rates on the beaches and in the most upscale of developments.
Don’t panic, however, because on the whole local purchasing power (the number of goods or services that can be purchased with a unit of currency) in Dubai is 36.08% higher than in London. Moreover, average monthly disposable salary in Dubai is 27% higher than in London. So if your employer is helping you with the accommodation costs it will take a huge burden off your bank account.
Schooling. School fees in Dubai can vary from around £600 to £27,000 a year depending on a school. Remember to negotiate the school fees with your employer and you will have nothing to worry about. Otherwise make sure that your salary is high enough to enable you to fund your children’s education.
Healthcare. Healthcare in Dubai is of excellent standard and doesn’t come cheap. A short visit to a private doctor will cost you over £60. The good news is – it’s your employer’s responsibility to give you an appropriate health cover. The bad news – employers are not obliged to insure your dependents, although many do. So do try to negotiate that your family’s health cover is included in your package.
If not, then you have to bite the bullet and insure your dependents yourself. In Dubai every resident has to be insured one way or another. If a private cover is too expensive for you, you can opt for the Essential Benefits Plan – the most affordable health insurance in Dubai.
Food. Purchasing food in Dubai is not very expensive, especially when local or regional products are chosen. International favourites will set you back a bit more. Some expats report that a family of four can get by really well on about £1000 a month for food expenses.
Clothing. Imports, of course, are more expensive – but local alternatives are not that expensive. Considering the lack of need for winter attire, an overall clothing budget here can be much smaller than in most European locations.
Electronics and entertainment items. Everything from television sets to DVD players tend to be a bit less expensive in Dubai. The lower import duties work to keep prices fairly low.
Utilities. These tend to run lower than in many European countries. The only exception is in the summer months when air conditioning bills can rise.
Transportation. The cost of getting around Dubai is generally quite low. About £60 a month for a Monthly Pass will allow you to use all modes of public transport unlimitedly during 30 days. It is a great value for money taking into consideration that public transport in Dubai has improved greatly.
Buying your own car will be abound 14% cheaper than in the UK. If you are planning to buy your own vehicle make sure you know all ins and outs of driving in Dubai before embarking on the adventure.
Petrol is also considerably cheaper, therefore taxi fares are lower. You can also test brand new Tesla taxi vehicles in Dubai – the city has around 200 of them for now.
How to Manage the Cost of Living in Dubai
If you’re wondering whether you can actually afford to live in Dubai, here are some tips on managing the ever increasing cost of living. We’re not going to offer you miracles…just some practical money saving tips, as well as some advice about lifestyle choices. The good news is that life in what’s arguably one of the most exciting destinations on earth needn’t cost the earth
The reason why Dubai is so expensive is because it can be! It’s desirability and exclusivity mean that demand for jobs, housing, school places and residency permits is intense, and anyone who can profit from the demand is doing all they can to indeed profit.
This is how you can afford the cost of living in Dubai:
1) Prepare in advance of your move by connecting with expats already living in Dubai. You can do this via Facebook, forums, Twitter and social media in general. Your employer may even be able to put you in touch with other expats at your new workplace before you relocate. Get practical advice about money saving from those on the ground right now!
2) Also, by connecting with expats already living in Dubai you may be able to find out who’s moving on, who has furniture or a car to sell. The best thing about a destination like Dubai where the expat turnaround time is quite fast is that there is always second-hand stuff to buy to furnish your new life.
3) If you’re already in Dubai and in need of anything from a new sofa to a new school uniform, choose second-hand. Don’t let pride get in the way of a bargain. Check out the Dubai flea market website to find out when the next market is taking place where you will doubtless be able to bag a bargain or two. Alternatively, try the likes of Dubizzle Dubai classifieds for all sorts of bargains.
4) In terms of housing you’re not going to find anything habitable that’s affordable! Housing is the most expensive bill you will have to swallow when living in Dubai. Again, forewarned and pre-prepared is the best approach. And getting your employer to assist practically and financially with your accommodation as an ongoing commitment is important. When negotiating your contract factor in a housing allowance, and assistance with securing and re-securing accommodation as regularly as required.
5) Ask fellow expats for advice about the best locations for accommodation according to your own needs. For example, a bachelor/man will have very different requirements from location/property-type to a family with school places already secured in a set location.
6) If at all possible prepare for your relocation to Dubai with plenty of time to spare. In so doing you will be able to hold out for the most affordable and best school place options for your children, rather than having to panic and grab what’s left. Additionally you will have time to consider housing options, and hopefully view areas and potential properties on one or two reconnaissance trips.
7) Obviously, the further out from the heart of the city you move the cheaper the housing can be (not always, depends on the desirability of the location!!), but remember to factor in travel times/costs as well, and think not only about where you’ll be working but where your children will be in school for example. As you’ll quickly come to see, commuting in Dubai is no fun at all, so the less distance you have to travel the better.
8) Don’t buy into the lifestyle. This is the most obvious statement to make when talking about Dubai – but possibly the hardest consideration to take to heart. In Dubai everyone spends loads on…everything! It’s almost a competition to see who can pay the most for a round of drinks, brunch, school fees and a villa. But stop and think about it – it is stupid to keep spending on a lavish lifestyle when a) you don’t have to and b) you can’t really afford to.
9) There are free activities to enjoy in Dubai, there are cheap places to eat and there are more affordable locations/housing options. Without living an awful, dull, restricted and undesirable life the absolute majority of expats in Dubai could cut back and significantly save. You might be going against the crowd and the trend if you opt for a less luxurious lifestyle! The pros outweigh the cons however – the pros are less financial stress and more money to save for a rainy day.
10) Finally, forget about being an expat for a minute and start thinking more locally. You live in Dubai now so adapt your lifestyle accordingly: buy local, support local, think local and you’ll not only drastically cut your cost of living in Dubai, but expose yourself to new and better products and produce, as well as potentially life enhancing experiences.
You don’t have to buy into the excesses of Dubai, and if you choose not to you will be able to save a veritable fortune.
In conclusion, Dubai is never going to be a cheap option…but living in Dubai needn’t break the bank entirely.