Dubai retains spot as most expensive city for expats in Middle East

Dubai has retained its place as the most expensive city in the Middle East for expatriates, but is getting cheaper according to Mercer’s 2020 Cost of Living Survey.

The emirate is positioned 23rd in the latest rankings, which is up considerably from the 90th spot it occupied in 2013, but down two places from last year, largely down to a decline in rents as the real estate sector suffered from over-supply.

The UAE capital, Abu Dhabi, also dropped from 33rd place in 2019, to 39th spot.

Vladimir Vrzhovski, global mobility practice lead, Middle East and Africa, said: “Since the beginning of 2019 we have been witnessing a continuous deflation across Dubai and Abu Dhabi primarily driven by the slump in the real estate sector which has made expatriate accommodation cheaper reaching back at the levels of 2013/2014.

“This deflation reflects the drop in ranking of both Dubai and Abu Dhabi making them cheaper than the years before.”

According to the survey, Riyadh came in 31st place, with the Saudi capital gaining four spots from last year; while Beirut climbed from 53rd place 12 months ago, to sit at 45th place this year; Manama went from 57th to 52nd; Muscat dropped into the top 100, rising from 103rd to 96th; Jeddah, however, dropped from 100th to 104th; and Kuwait City increased from 119th to 113th.

Countries in the Middle East are suffering heavily from the impacts of the Covid-19 pandemic, coupled with lower oil prices. Although governments have taken measures to mitigate the economic impact, there have still been reports of widespread redundancies.

Emirates Group on Tuesday confirmed over 1,000 job losses, while Etihad Airways, Air Arabia and a number of other carriers have announced plans to reduce head count.

Uber’s Middle East ride-hailing unit Careem eliminated nearly a third of jobs in May but said this week business was recovering.

Road to recovery

Vrzhovski added: “Attracting highly skilled talent is going to play a crucial role supporting the road to recovery and accelerating the economic diversification of the local economies. The balance between an affordable cost of living, high quality of living and competitive salary packages, will support the aim of the governments to develop their 'City Attractiveness' proposition and keep their brand as highly attractive cities for expatriates and businesses in the region as well as globally.”

Hong Kong topped the list of most expensive cities for expatriates, followed by Ashgabat, Turkmenistan in second position. Tokyo and Zurich remain in third and fourth positions, respectively, whereas Singapore is in fifth, down two places from last year. New York City ranked sixth, moving up from ninth place.

Other cities appearing in the top 10 of Mercer’s costliest cities for expatriates are Shanghai (7), Bern (8), Geneva (9), and Beijing (10).

The world’s least expensive cities for expatriates, according to Mercer’s survey, are Tunis (209), Windhoek (208), Tashkent and Bishkek, which tied to rank 206.

Mercer’s survey includes over 400 cities throughout the world; this year’s ranking includes 209 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.