Is Dubai expensive? – an expat perspective

Is Dubai expensive?
Is Dubai expensive?

Is Dubai expensive? This is a question I’m asked constantly. It’s certainly a loaded question for people thinking of making an expat move to the United Arab Emirates. Getting your sums and finances right is incredibly important because getting it wrong will cost you dearly. This article is an open view based on a potential expat wishing to live a moderately comfortable life in Dubai. There are essential things you need to be aware of.

The highs and lows

During my 28 years in Dubai, I’ve seen the highs and lows of the Dubai economy and therefore will share these insights with you. A positive aspect of the local currency (United Arab Emirates Dirham or AED) is that it is pegged to the dollar. Expats going on holiday will find this works in their favour (depending on the destination). Using cost of living comparison tools such as bankrate and numbeo will give you more updated information. Some seasoned expats are a little disgruntled with the new 5% VAT rules introduced in January 2018. Hopefully, this may give you more clarity on the question ‘is Dubai expensive’? According to numbeo, Dubai ranks as 35th in the cost of living in index.

The most expensive outgoings

Let’s take a look at accommodation costs. Firstly, it is vital that you know that your expat package is enough to cover the costs of your accommodation. Living in Dubai is expensive and renting a home there will cost you much more than at home. Some great information and tips can be found on the Money – 9 good habits for a new expat blog.

Is Dubai expensive?

Average housing costs will help you decide if Dubai is too expensive

Depending on the area, an average three bedroom villa will cost approximately Dhs.125,000 upwards a year. Converting this to pounds works out at £26,291 a year or £2,190 per month. My villa in a popular area in Dubai was around £28,000 per year, £2,333 per month. Apartment rentals are cheaper. Once again this depends on the area that you live. Apartments in Karama are far cheaper than in Jumeirah. Flats range from Dhs.75,000 upwards (£15,768.57) today’s exchange rate). Above all, do your sums accurately to factor in the costs of accommodation. Get it wrong and you will have big regrets later.

Is Dubai expensive

Private Schools

Expats send their children to private schools in Dubai. In addition, there is generally a waiting list for the most popular. Remember to include this into your moving timeline. School fees are high in Dubai. If you are stuck paying these yourself then money may be tight. Years ago it was common for companies to cover the full costs of school fees, this is not always the case now. Companies may provide an attractive financial package inclusive of school fees, however, make sure it is enough.

School fees example – an important consideration in deciding if Dubai is too expensive for you

Choosing a school for your child can be quite stressful because of waiting lists and limited places. My daughter attended Dubai College and the fees were approximately Dhs.30,501 per term (approx £6,400). This works out at £19,200 per year or £1,600 per month. Fees are generally payable in advance, if these are not paid in time, the student may not be allowed to attend. In addition, it is common for a personal debenture to be paid for new students. The amount payable varies between schools and costs around Dhs.25,000 (£5,250) depending on the exchange rate. This amount is returned when the child leaves school.

Is Dubai expensive?

Due diligence

Hopefully, you can see the importance of calculating your incomings and outgoings carefully. Ultimately this will help you decide if Dubai is expensive for you. Above all, carrying out due diligence can save you from making a big fat pricey mistake. In addition to the above, I would like to highlight there are cheaper school options available.

Families, couples and solos

Living in Dubai as a family is more expensive than a couple or solo expats. Sharing accommodation is common with solos because this reduces costs substantially. Couples with no children may have cheaper accommodation options. Honestly, it all depends on how you want to live, your budget and where you choose to spend your money. Some accommodation will have swimming pools and sports facilities, while others are more basic.

Food costs

Just like home, you can choose to shop in an expensive supermarket or you can go for a cheaper option. Imported foods from home are more expensive. Getting into the habit of shopping for local produce and cooking in the local style is not just fun but good for your pocket too.

Buy local produce

Middle Eastern food is delicious, tasty and all ingredients can be bought at a cheaper price than the ‘pricier’ supermarkets’. Costs of eating out at restaurants can vary wildly. From eating a delicious shwarma street for a few dirhams to fine dining, it’s your choice. Eat and drink all you want evenings has become popular. Ideal if you want to keep a ceiling on your expenditure.

Is dubai expensive?

Utilities

Summer is the time when air conditioning units are switched on. Temperatures reach the 40s and it is incredibly hot. The months between October to May are a lot cooler and ACs are not used as often. It, therefore, makes sense that in the summer months utility bills skyrocket, especially if you have a garden. Factor in the costs of a connection fee from Dubai Electricity & Water Authority (DEWA) when you move into a property. This is approximately Dhs.1000 for an apartment and Dhs.2000 for a villa. Prices vary according to the size of the property. Bills can be anywhere from Dhs.1,200 up to Dhs.6,000. Watering a garden can make a big difference so think twice about a villa with a huge beautiful garden.

Transport

Many expats can’t wait to buy the car of their dreams when they arrive. Fuel is cheap compared to their home country and cars are cheaper. All budgets are catered for with many opting for cheaper modes of transport such as the Metro, taxis and water taxis. The disadvantage of not owning a car in Dubai is that there is so much to see outside Dubai, it makes sense to go exploring.

Is Dubai expensive?

Insurance

Companies generally provide health insurance for employees, however, some expats prefer to choose their own. Remember to check that the policy also includes family. Although you can use government health care, there is more choice at the many excellent private hospitals. Personal choice and circumstances prevail in this case. Car insurance costs approximately 4-7% of the value of the car you choose to drive.

Big decisions

Hopefully, now that you have more information you can decide if Dubai is too expensive for you. It is possible to live in Dubai and still save money as long as you budget and sensible with your income. As with everything only you can make your spending choices. It is very tempting to fall into the false assumption that you’ll be there for years, however, situations change and you can find yourself out of a job and out of the country very quickly. Bear this in mind in your long term financial goals.

I hope you have enjoyed this ‘is Dubai expensive’ article. Feel free to get in touch, reach out for more information, or read other expat information on the site.

If you are an expat, what has your experience been like?

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