Capital counts cost of property prices
High rents and strong dollar fire Abu Dhabi up cost-of-living rankings
Abu Dhabi has been ranked in the world’s 25 most expensive cities as a strong dollar and rising rents saw it climb eight places in 12 months.
The annual cost of living survey by HR consultants Mercer charted the priciest global hubs for expats, with Hong Kong clinching first place. Singapore, Zurich, Shanghai and the African oil hub of Luanda were also among the top 10.
Dubai, which was 23rd last year, climbed two places to 21st.
The study’s authors said the overall rankings were affected by “volatile markets and stunted economic growth in many parts of the world”.
Abu Dhabi saw inflation rise 3.2 per cent in the first three months of this year, compared to the same period in 2015. Dubai saw a headline rise of 1.6 per cent in the same period, although within that the figure was a 5 per cent hike in education costs.
But experts yesterday said the two cities still offer better value for money than many other global hubs, including on rent. In Hong Kong, a two-bedroom flat in a good neighbourhood is about Dhs300,000 per year, compared to Dhs140,000 in Abu Dhabi.
Hamzah Shalchi, from Guardian Wealth Management in Dubai, said: “Rent is becoming a lot more reasonable compared to other cities around the world.”
Hong Kong has been named the most expensive city in the world for expat residents, while Abu Dhabi moved up eight places into the top 25.
The Asian metropolis - where the cost of a typical two-bedroom apartment is Dhs300,000 per year - overtook Luanda in Angola, which has seen a dramatic oil boom in recent years, to clinch the top spot.
Zurich, Singapore and Tokyo completed the top five.
Dubai rose by two places to the 21st most expensive, while Abu Dhabi leaped eight places from last year to be in 25th in Mercer’s 2016 Cost of Living Survey. The strong American dollar, to which the dirham is pegged, was partly responsible, although Nathalie ConstantinMétral, who compiles the survey for Mercer, said rising rents was also a factor.
Property portal Bayut.com calculates the average rent for a two-bed apartment in Abu Dhabi is Dhs139,000. A separate report by Dubizzle earlier said it had seen increases of between 5 and 11 in the first quarter of this year, compared with the same period in 2015.
Constantin-Métral said: “The strong increase for expatriate rental accommodation costs, particularly in Abu Dhabi and Jeddah (ranked 121), is leading several cities in the Middle East to experience a jump in the ranking.”
Despite that, Hamza Shalchi, a regional manager for Guardian Wealth Management, said a large retail market and dozens of malls and restaurants ensures competition is high and prices remain lower than other expat cities.
He said: “With the current accommodation situation in Dubai, where supply is higher than demand, rent is becoming a lot more reasonable compared to other cities around the world.
“It is also very large in area - Dubai can keep spreading, compared to a place like Singapore, which is an island.
“In terms of clothing and food, there is so much more competition, all the best brands and restaurant chains from across the world want to come to Dubai, which gives residents more choice and in turn the providers will price themselves competitively too.”
HONG KONG - 1ST