Cost of Living

How much does living in Dubai cost?

Housing prices and inflation running on average at 2.5% means that living in Dubai has become a lot more expensive over the last few years.

The general lack of taxation has a significant impact on the cost of certain items, e.g. cars. On the other hand, the cost of accommodation is high, as is that of certain food items, particularly imported foods. If you buy internationally recognised branded foods and household goods, you might pay higher prices than in your home country, but there are usually plenty of cheaper locally and regionally produced alternatives that are of excellent quality. Clothing can also be expensive if you favour designer labels – this isn’t peculiar to Dubai – although there’s little need for winter clothing.

However, after a high increase of rental prices in 2008, a radical decline could be observed towards the end of 2009, with rental prices decreasing up to 50%.

The price of wines and spirits, where these are permitted, is slightly lower than in the UK but higher than average European prices. Electronic goods, such as televisions, hi-fis, DVD players, photographic equipment and computer hardware and software, are generally less expensive than in Europe, mainly because of lower import duties.

Utilities, such as electricity, water and gas, are subsidised to some extent by the region’s governments, which own the services (except for bottled gas supplies) in order to provide inexpensive electricity and water, mainly for the benefit of the local population. Utilities are therefore cheaper than in most European countries. However, at the height of summer, air-conditioning costs will escalate, rather as the cost of heating increases in winter in colder climates. Newcomers sometimes make the expensive mistake of keeping their air-conditioning on even when they’re out, but this is unnecessary, as air-conditioning systems reduce the temperature in your accommodation quickly when activated on your return home.

You should also allow for the cost of international telephone calls, although these are kept low by Dubai’s government, who wants to encourage international business and investment in the region.

Your cost of living will obviously depend on your lifestyle. When you’re negotiating a work contract, it’s usual for your prospective employer to produce detailed cost of living figures for his country, which are useful in helping you to decide whether the proposed job is financially attractive or not.

Average major expenses for a couple with two children are shown below:

  • Housing: A 2bedroom flat in a decent neighbourhood costs between AED100,000 and AED140,000 per annum.
  • Schooling: High school costs about AED40,000 (depending on school fees can be up to AED90,000) per annum, while primary school costs between 20,000 to 28,000 AED per child at schools where the UK, US or European curriculum ist taught by teachers from those countries.
  • Utilities: Depending on the size of your home electricity and water can cost between AED1,200 and AED 5,000 and a full time maid costs at least12,000 AED per annum.
  • Car rental: cars can be leased for AED1,500 per month which would mean an annual cost of AED18,000.
  • Telephone: local calls are free, local calls from mobile phones are 15-30 fils per minute. Internet flat rate costs approximately AED250 per month.
  • Insurance: car insurance is 4-7% of the vehicle value, home insurance starts at AED190 for a coverage of AED50,000.

Further reading

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Other comments

  • Tiina Ansell, 29 July 2008 Reply

    Updating the living costs

    Some of the costs currently published in this article are old. You should update following:

    Rent: A villa annual rent is between 120,000 to 300,000 AED depending on the location and the number of the bedrooms. Appartments are between 50,000 - 200,000 AED, same criteria as above. Studios are between 50,000 to 70,000 AED.

    Utilities: Water and electricity bill amount varies a lot between an appartment and a villa. It can be anything between 7,000 to 24,000 AED per annum. Full time maid between 12,000 to 18,000 AED + sponsorship + mobile + annual return flight ticket to home country + deposit to Goverment.

    Insurance: Car insurance costs is according to your car purchase value. For exsample: car of 80,000 AED has insurance cost of 4,000 AED per annum. Household insurace is also according to the value of the insured items.

    Schools: Costs has gone up this year and schools have got a permission to increase their fees by/up to 30%. American School of Dubai has published their tuition and school fees on their website; grades 1 - 12 is 54,800 AED.

    Salik: A road toll. Every time you pass one Salik you are charged 4.00 AED. Eventually, there will be 15 Salik gates on Dubai roads.

    Inflation: in 2006 and 2007 inflation rate was around 11%, forecast for 2008 is over 12%. Grocery items forecasted inflation rate is around 40%. Due to the oil price increase many imported items price is increased by 20% during the first half 2008.

    Pension: There is no pension system in UAE (for expats) and you need to pay your own pension plan should you be thinking of retirement days, too.

    When you rent your home you pay the agent 5% commission of the rent. Rent has to be paid in advance either by 1, 2 or 3 cheques. Tenancy contract is valid for 12 months. If you want to terminate it in the middle of the renting period you pay one to three months rent to Landlord as a compensation for doing it.

    • Ana 19 Jan 2009, 08:46

      One Bedroom apartment in Dubai 2009

      Believe me a one bedroom apartment in a normal neighborhood cost 100.000 AED per annum. I agree the cost that are in the webpage are nor the reality of the high cost of living in Dubai.

    • Shohruh 24 Jul 2010, 08:12

      Living cost in Dubai

      2000 dirhams per month is more than enought Accomodation, food, Transportation. i am living in dubai 2 years.

  • Ana, 19 January 2009 Reply

    Housing in Dubai 2009

    Hi, the real prices for a One Bedroom apartament in a normal neighborhood in Dubai is 100.000 AED per annum.
    I am a person who lives now in Dubai for 18 months, believe me.

    • new coming 12 Mar 2009, 10:13

      Housing

      Currently I'm negotiating a contract in dubai, how much cost a 2BR flat in Dubai, and is it more cleaver to serach an appartment in a cheapest city near dubai like sharijah or ajman

    • Sudhir 11 Dec 2009, 09:29

      Recession in Dubai

      Compare all living costs prevailing now in December 2009 and a year ago. Rent has fallen down majorly to 50% of previous. Foods price is not that reduced due to inflation numbers increasing. Traffic is abnormally reduced after metro is introduced and annormous number people migrated back to their home country.

  • denise wilcox, 27 April 2011 Reply

    inflation in dubai

    hi there

    for the last quarter inflation in dubai was 1%. if you want to have information that can help people , make sure its accurate and do not mislead.