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Tue 29 Jun 2010 11:03 AM

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House price fall makes UAE cities more affordable

Jeddah named the cheapest place to live for expats in Mideast region - Mercer.

House price fall makes UAE cities more affordable
PRICE CHECK: House prices and rents in Dubai have plummeted as a result of the global economic downturn. (Getty Images)

Falling house prices and rents are helping Dubai and Abu Dhabi remain relatively affordable cities in which to live while Jeddah in Saudi Arabia is among the cheapest in the world for expats, according to a new global study by the HR consulting firm Mercer.

Mercer’s 2010 Cost of Living Survey, published on Tuesday, showed that Dubai was ranked the 55th most expensive city for expats, tying with Los Angeles, California.

Abu Dhabi was ranked 50th, tying with Frankfurt, Germany, and was ranked the most expensive city in the Middle East.

However, Jeddah was shown to be one of the cheapest places to live for expats in the world list, ranked 181st out of 214.

Housing costs in the UAE, and especially Dubai, have plummeted during the global economic crisis, with prices down more than 50 percent in some parts of the emirates.

Other cities across the GCC were ranked as follows: Manama (139), Riyadh (144), Doha (146), Kuwait City (152), and Muscat (176).

Dr Markus Wiesner, who heads the Dubai office, said: “While across the UAE the cost of living has remained relatively stable, we are seeing that accommodation costs have continued to decrease in Abu Dhabi and Dubai, driving down the cost of living for expats.”

Luanda in Angola was the world’s most expensive city for expatriates, while Tokyo was in second position, with Ndjamena in Chad in third place.

Moscow was in fourth position followed by Geneva in fifth while Karachi was ranked as the world’s least expensive city.

The survey found that Luanda is three times as costly as Karachi.

The survey covered 214 cities across five continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment.

All cities were compared against New York as the base city for the index while currency movements were measured against the US dollar.

For the first time, the ranking of the world’s top 10 most expensive cities included three African urban centres: Luanda (1) in Angola, Ndjamena (3) in Chad and Libreville (7) in Gabon.

The top 10 also included three Asian cities; Tokyo (2), Osaka (6) and Hong Kong (jointly ranked 8). Moscow (4), Geneva (5) and Zurich (joint 8) are the most expensive European cities, followed by Copenhagen (10).

Wiesner added: “In the past couple of years, corporate assignments have become truly global, with expatriates and ‘global assignees’ being transferred across all parts of the world.

"However, global mobility is still an expensive undertaking for companies, so selection of the right candidates and a real understanding of the costs involved in relocating staff to other countries are essential - especially in today’s economic environment.”

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