CUTTING BACK AS COSTS GO UP
Residents looking to reduce expenditure
Nearly two-thirds of people in a 7DAYS poll said they were considering some form of downsizing due to the rising cost of living in the UAE.
The poll was carried out after figures showed a rise in essential expenditures such as food and education in the first quarter of 2016.
We asked readers if they were planning to downsize and, if so, how. More than 700 people responded to the poll, with one in six saying they were going to downsize from a villa to an apartment.
Although one third of people said they had no plans to downsize, five per cent of respondents said they were going to change their children’s school while 15 per cent said they were moving to a cheaper part of their city. Nearly 30 per cent of people said they were considering moving to another emirate.
As part of the survey, 7DAYS also spoke to a number of families, who were candid about their struggle with rising costs.
One expat in Dubai, Kanika Sood, said: “Everything here is getting more expensive, and salaries don’t rise in proportion to inflation, so that puts a lot of pressure on my husband.”
Sood (pictured right with her husband, sixyear-old son and 21-month-old twins) added: “I came here 15 years ago and I’ve seen the value of money go down. It’s amazing to see how prices have risen.
“Dhs500 used to go a long way, now it doesn’t even get you through the week.”
Sood said many of her friends who came to Dubai to save have returned to their home countries because they can no longer put any money away.
“A lot of our friends have actually returned to their home countries because they simply can’t cope with the kind of inflation you’re seeing now and they’re not able to save,” she said. “When you have rents and grocery bills increasing it all adds up at the end of the month.
“They can probably save about five per cent of their salaries but that’s not really enough. “People come here to save but if you’re not saving then what’s the point.”
According to the Dubai Statistics Centre, the inflation rate in Dubai was 1.61 per cent in the first quarter of 2016.
However, housing and utility costs, which make up 43.7 per cent of consumer expenses, rose 4.15 per cent during the period compared with the first quarter of 2015, while the price of food and beverages went up by 2.96 per cent.
The cost of education climbed 4.83 per cent in Dubai in the first three months of 2016, compared with the same period in 2015.
Meanwhile, in Abu Dhabi, the cost of living rose by 3.2 per cent in the first three months of this year when compared to the same period in 2015.
Statistics Centre - Abu Dhabi said housing, water, electricity, gas and other fuels accounted for the largest rise in the Consumer Price Index, going up 7.7 per cent
Indian expat Abdul Haq, 38, who works in sales in Abu Dhabi, believes there is little chance of making savings if your company does not pay for housing and education, since those are the highest outgoings.
“I earn Dhs12,000 per month and have two kids,” he said.
“The most expensive thing here in Abu Dhabi is rent and education both of which are sky high for no reason whatsoever.
“I currently pay approximately Dhs40,000 per year for my kid’s schooling, the younger one is two years and hasn’t started school yet.
“Rent is 80,000 per annum. Imagine when I need to pay for both the kids in a year or two, how will I manage?
“It is like a hand to mouth situation. Whatever comes in the bank is immediately out with all the basic expenses that have to be taken into account.”