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| Introduction |
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In previous reports, we have portrayed Dubai ’s massive expansion as a series of paradigm shifts – from Arab diving village to expat town, and more recently from expat town to international city. As we commented in last year’s introduction, the period 2005-2007 marked the real emergence of Dubai on the international stage, and in the context of these Cost of Living Reports we found our research for the report increasingly drawing us to international cost comparisons – comparing taxi rides with Singapore or schooling with Dublin , for example. Just twelve months ago, the thought was quite shocking.
Now we find ourselves being forced to change the way we view the city again – and to re-frame the context of this Cost of Living Report once more. Is it possible that Dubai is now aiming at something bigger than just international city - more of a ‘mega-city’ perhaps? If proof were needed, look around: the world’s largest airport, the world’s largest metro system, and artificial offshore islands the size of entire European cities….
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| Lifestyle |
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As we wrote last year, lifestyle is a matter of choice and how people wish to spend their spare time (and money) tends to vary quite widely. This is particularly so in a city like Dubai , which is home to such a wide range of nationalities and incomes.
On the whole, continuing the trend we began to see last year, there is little change among lower-priced activities, but significant increases at the higher end. The cost of eating out has not varied much, and one can continue to eat inexpensively or extravagantly much as before. Likewise, there is no change to the price of parks or cinemas – and a day at the mall is always free, or at least until the shopping starts.
At the higher end of the scale, though, price rises are quite staggering. For example...
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| The Job Market |
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As new businesses continue to move into the region – and above all into Dubai – the need for quality staff continues to rise. Kershaw Leonard has once again seen an increase in the number of candidates interviewed within the last twelve months, rising to a new all time high.
We’ve seen some interesting trends begin to emerge. One of the most interesting, and welcome, trends has been the start of a move away from salary differentiation based upon nationality in certain sectors. Across Sales & Marketing, Construction and Financial Services, our consultants are noticing how Dubai’s increasingly international companies (and the local companies that aspire to compete with them) are setting salaries according to skill sets and experience, with lesser, or no, differences in salary on account of nationality.
Similarly, we continue to see...
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| Concluding remarks |
In its drive to be a world city, no one will deny that Dubai has achieved remarkable success - evidence of this is all around. But there are clouds on the horizon. Annual increases in the cost of living between --% and --% for three years running can’t be healthy for any economy, and certainly not for a city made up of expatriates, who are by definition free to come and go as they wish.
Of course, official figures may not agree. Inflation and cost of living data tends to vary a lot in Dubai because the population itself varies so much: it’s hard to pin down one “average” consumer, given the wide range of cultures, incomes and lifestyles in the city. Moreover, UAE Nationals benefit from subsidised or free healthcare, education, utilities and housing, so an official “inflation” rate of --% may be true for Nationals, but wholly inaccurate for the remaining 85 per cent of the population....
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| Accommodation |
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As we wrote last year, it seems appropriate to start a review of the cost of living in Dubai with the actual cost of living in the city – whether renting or owning. And particularly appropriate, given the degree to which accommodation costs continue to drive the city’s overall cost of living increases. In short, the year-on-year increases in the prices of renting or buying since May 2006, and the absolute cost of accommodation in Dubai , are now pretty staggering by any global standard....
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| Education |
Second only in price inflation to accommodation, the rising cost of education in Dubai continues to cause difficulty for the city’s residents. And whereas private education may be a luxury or privilege in many home countries, it is the only choice for the majority expatriate population in Dubai , since free schooling remains the sole preserve of national families. Education, as with much else in the city, is a business – and a booming one at that.
Historically, up until 2007, schools were only permitted to raise their fees up to a maximum of 20 percent over a three-year period. This helped keep increases to a manageable average of around 8% a year even if, in practice, the actual increases came all at once rather than rising steadily each year.
But the cap proved inadequate for the schools themselves, facing pressure from rising accommodation costs for their staff. As we reported last year... |
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