The road ahead

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If only it were possible to look into a crystal ball and predict what the future held for your finances. You could find out whether 2008 was the year when you would make that elusive million or end up with less money in the bank than you started with, whether you'd acquire a home or splash the deposit money on the stock market instead. While it may be impossible to make accurate predictions experts can, based on the previous year's trends, give some indication of what the next 12 months hold for the country's economy and how this will affect your bank balance. We gathered together a team of experts, including a professor of economics, HR professionals and property and financial gurus, and asked them to give us their predictions for 2008.And the results may surprise you.

Mike Hynes is managing partner of UK based recruitment agency Kershaw Leonard which recruits candidates in several sectors including construction, finance and banking, human resources and training, legal, logistics and supply chain management. His company publishes the annual Cost of Living Dubai Report covering everything from school fees and medical costs to the price of Friday brunch.

How different do you think the 2008 to 2009 Cost of Living Dubai Report will be compared to this year's report?

In the 2007 report there were three main drivers of rising costs - housing, education and healthcare.

And I don't think those drivers of rising costs are actually going to change. There is no sign of school fees suddenly dropping down and everything we read in the papers indicates that at least for the next couple of years the pressure is on for rents to increase significantly as they have done in the past. Maybe 2008 will just be more of the same and it will be 2009 when we start to see changes - particularly when demand starts to be satisfied in the housing market.

Do you think Dubai's rent and property prices will continue to rise?

As far as I'm aware the rules for rent increases in 2008 are not out yet and if the cap, which has been imposed is removed this could have a significant impact on inflation.

There was some talk in the papers about just going back to a complete free market depending on what part of the city properties are located in. If they go with that we could see some enormous rent increases.

I think there will still be pressure on house prices to rise and there will not be enough accommodation for people that need it.

One impact of the rising rental and property costs could be that more and more people move out to other parts of the UAE. And as soon as rumours of a metro link between the emirates and maybe even a full blown railway system come to fruition, we'll see the other emirates increasing in prosperity as more and more people choose to live there.

School fees were identified as a major driver of inflation in your 2007 report. Do you think parents will face further hikes in the cost of education this year?

There is a cap on local schools increasing their fees over 16% and international schools increasing them over 20%. But what's happening is that new schools are coming in and new schools are not subject to the cap. So there are some enormous fees. One new school I know of is charging AED80,000 a year.

Existing schools, to get around the rules, are doing things like increasing the cost of transportation for children and charging more for books and entrance fees.

Will medical costs rise with the influx of new healthcare providers into Healthcare City?

I heard that there are 26,000 new people a month coming into Dubai and if all those people need to be given private healthcare then clearly the demand is enormous. It's a very buoyant market and prices seldom drop in such a buoyant market.

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