Dubai and Abu Dhabi have become more affordable for expats

Decline in rentals and house prices are considered to be the major reason for increased affordability of the cities.

UAE has become more affordable for expatriates in 2021 as cost of living in the country’s two major cities, Dubai and Abu Dhabi, dropped significantly, states Mercer in its latest report.

Dubai moved from 23^rd to 42^nd place in the list of the most expensive cities in the world, while Abu Dhabi Abu Dhabi moved 17 places from 39^th to 56^th. Decline in rentals and house prices are considered to be the major reason for increased affordability of the cities.

According to Mercer, both Dubai and Abu Dhabi are now more economical for expatriates due to attempt to attract critical talent, more remote workers and freelancers against the backdrop of cheaper property, deflation and dollar movements.

This makes UAE quite attractive from a cost perspective, compared to some of the global hubs for digital and creative talent like London (19), San Francisco (26), Paris (34) or Dublin (40).

'For over two years, we have been witnessing deflation across Dubai and Abu Dhabi. This can be attributed to a range of factors, including a decline in the real estate sector, which has made expatriate accommodation cheaper. Moreover, a drive to enable remote and flexible working is driving mobility and cementing UAE’s reputation as a destination of choice for expatriate workers,' said Vladimir Vrzhovski, Mercer Global Mobility Practice Lead, Middle East and Africa.

In the Middle East and Africa, in the cost of living for expatriates as compared to 2020 increased most notably in Beirut. The city rose 42 places and now ranks as the third most expensive city globally. The hyperinflation in Lebanon has been caused by the currency collapse after political and financial crises.

Ashgabat, the capital of Turkmenistan, was ranked the most expensive city in the world, followed by Hong Kong, Beirut, Tokyo, Zurich, Shanghai, Singapore, Geneva and Beijing.

Mumbai (78) is India’s most expensive city, though it dropped 18 places in this year’s ranking due to a relatively weak Indian rupee in comparison with other cities in the list.

Meanwhile, the most economical cities are Bishkek (Kyrgyzstan), Lusaka (Zambia), Tbilisi (Georgia), Tunis (Tunisia), Brasilia (Brazil), Windhoek (Namibia), Tashkent (Uzbekistan), Gaborone (Botswana), Karachi (Pakistan) and Banjul (Gambia).