Dubai has risen three places to become the world’s 15th most expensive city for international employees, according to the latest survey released by Mercer.
The increase in the cost of living in the regional financial capital is mainly attributed to an increase in property rentals, which have been on the rise after the pandemic.
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According to the 2024 Cost of Living City Ranking by Mercer, three-bedroom properties recorded a 15 per cent increase in rents year-on-year while rents increased by 21 per cent from 2023 to 2024, which is among the highest among the major cities.
“Rising housing costs in many cities around the world have made talent mobility a challenge for employers. Volatile inflation trends are also eroding the purchasing power of international assignees and putting additional strain on their compensation packages. These factors can make it difficult for employers to attract and retain top talent and can increase compensation and benefits expenses, limit talent mobility, and raise operational costs,” Mercer said in its latest study.
“High living costs may cause assignees to adjust their lifestyle, cut back on discretionary spending or even struggle to meet their basic needs,” said Yvonne Traber, Mercer’s global mobility leader.
According to real estate consultancy Asteco’s figures, rents have increased dramatically after the pandemic due to the inflow of foreign workers, rising by 100 per cent in some of the popular areas such as Jumeirah Islands, Palm Jumeirah, Dubai Sports City, Dubai Hills Estate, and Damac Hills.
The survey covered 226 cities across five continents. It assessed the comparative costs of over 200 items in each location — from housing and transportation to food, clothing, household goods, and entertainment. New York City was utilised as the base city and currency movements were measured against the US dollar.
The other factors that contributed to the increase in the cost of living in Dubai were groceries and personal care items.
The study showed that the prices of eggs, olive oil, and cup of coffee increased in the emirate while the prices of petrol, haircut, and blue jeans dropped between March 2023 and March this year.
Regionally, the next most expensive city in the Middle East region was Tel Aviv, which has dropped by eight places to rank 16th, followed by Abu Dhabi (43), Riyadh (90), Jeddah (97), Amman (108), Manama (110), Kuwait City (119), Doha (121) and Muscat (122).
Globally, Hong Kong retained the top spot in this year’s ranking, followed by Singapore. Swiss cities Zurich, Geneva, and Basel round out the top five most expensive cities.
Meanwhile, two Nigerian cities Abuja and Lagos and Pakistan’s capital Islamabad were ranked the least expensive cities for international employees by Mercer.