| dbxsoul |
| What is the cost of living in Dubai? How long is a piece of string? This is a topic that comes up regularly, and perhaps needs some discussion. There are two ways of measuring “cost of living”; one is a purely financial analysis of the situation, comparing the prices of various items to similar or the same items around the world, in effect comparing apples with apples. The second way to look at it, and which should possibly be looked at in conjunction with the financial analysis is the personal lifestyle/ standard of living comparison. In order to do that, you need to establish a “standard of living” baseline; obviously there are a million variables that one could compare, which would simply bog down any form of useful comparison and be far to a lengthy process to keep up to date. What I have done is draft 4 rough, general profiles, these are by no means perfect or even indicative of all walks of life, but they do address the issues of the “hierarchy of needs” in varying degrees. This gives four cross sections through a typical society; you may not fit into any one exactly, but I would say that if three quarters of a Category applied, then you would into that group. There is one obvious flaw (perhaps more) in the system I am proposing, which is people come to Dubai to earn money to ultimately improve there standard of living and that of their families. In this respect your current personal circumstance may put you into Category C, but you are actually looking to move to Category B (in a short space of time), and ultimately Category A. A person wanting to save frantically to buy a house in their home country for example, may currently be in Category C, but may have to move down to Category D to achieve their immediate goal. Category A i) I have a good, stable, long-term job with a steady income; I am well educated and feel successful ii) I have little or no debt iii) I own my own home, and perhaps even a holiday home iv) I own my own vehicle or number of family vehicles v) I have sufficient savings and have provided for my retirement vi) I eat out on a regular basis and enjoy outings to the movies, theatre etc. vii) I can afford the luxuries in life viii) I have a good, healthy family and family life and plenty of friends ix) My children attend private schools Category B i) I have a good, stable job with a steady income ii) I have a small or medium sized mortgage on the property I live in iii) I own my own car or have only a small loan outstanding on it iv) I have little or manageable debt, a credit card and some store accounts v) I have some savings and have started making provision for my retirement vi) I eat out sometimes and enjoy outings to the movies, theatre etc. when I can afford it vii) Can afford the luxuries in life on odd occasions, but sometimes have to make compromises viii) I have a good family life and a number of close friends ix) My children attend private or good public schools Category C i) I have an “okay” job, perhaps not as good as I would like, but it pays the bills ii) I have a large mortgage on a property, don’t own a property and rent iii) I don’t own a vehicle and make use of public transport iv) I have a fair bit of debt, sometimes my earnings aren’t sufficient to get me though the month comfortably and have to compromise on the things I would really like to buy v) I have no savings and have made little or no provision for my retirement vi) I can’t afford any luxury items vii) My children attend public schools Category D i) I don’t have permanent employment, sometimes I take part-time work to make ends meet, or I may have to work two jobs to get through the month ii) I have little or no credit rating iii) I rent or stay with family and am sometimes behind in paying my rent iv) I only use public transport, walk or get a lift with friends v) I have no savings what-so-ever vi) I never eat out vii) The only luxury items I see are in magazines viii) My children attend public schools Assumptions: • Largely based on “Maslow’s Hierarchy of needs”, that a happy, motivated person will strive to fulfil the 5 basic needs in life (physiological, safety, social, esteem and self-actualization). • Meeting these needs contributes the social well-being of an individual and therefore is a measure of their “lifestyle” and social standing; supporting this comes at a financial cost. This “socio-economic” group influences where you can afford to stay, what schools you can afford to send your children to, what you can afford to drive etc. • The persons I am trying to profile fall into the highly educated, educated or highly skilled definitions of employment only, this does not include people who, by Dubai standards would be considered “unskilled”! • The table below (and where applicable) is based on a married couple with a single child. Some of the figures can be extrapolated on the basis of a single person or married couple with no children (or more than one child). • My opinion only, although figures are based on actual market figures What you can expect to spend/ pay to maintain the same standard of living per Category indicators above: Category A Housing/ rental 180,000 – 250,000 p.a. (villa) Housing – levy 24,000 – 36,000 p.a. Vehicle (Purchase price) 120,000 + Vehicle (Financed price) 8,000 p.m. Electricity/ water 10,000 – 24,000 p.a. Schooling Kindergarten 10,000 – 12,000 p.a. Schooling Grade 1 – 6 (1 child) 18,000 p.a. Schooling Grade 7 – 12 (1 child) 24,000 p.a. Food 4,000 p.m. + Entertainment 3,000 p.m. + Clothing Per month – family of 3 1,500 – 3,500 p.m. Cost of having a child at a hospital in the UAE 25,000 – 35,000 Category B Housing/ rental 120,000 – 180,000 p.a. (villa) Housing – levy 18,000 – 24,000 p.a. Vehicle (Purchase price) 65,000 – 120,000 Vehicle (Financed price) per month 2,300 – 4,300 p.m. Electricity/ water 8,000 – 12,000 p.a. Schooling Kindergarten 10,000 – 12,000 p.a. Schooling Grade 1 – 6 (1 child) 16,000 – 17,000 p.a. Schooling Grade 7 – 12 (1 child) 20,000 – 24,000 p.a. Food 2,500 – 4,000 p.m. Entertainment 1,500 – 3,000 p.m. Clothing Per month – family of 3 1,000 – 2,000 p.m. Cost of having a child at a hospital in the UAE 25,000 – 30,000 Category C Housing/ rental 80,000 – 120,000 p.a. (small villa, but more likily an apartment) Housing – levy 12,000 – 18,000 p.a. Vehicle (Purchase price) 50,000 – 65,000 Vehicle (Financed price) per month 1,800 – 2,300 p.m. Electricity/ water 6,000 – 7,000 p.a. Schooling Kindergarten 10,000 – 12,000 p.a. Schooling Grade 1 – 6 (1 child) 16,000 – 17,000 p.a. Schooling Grade 7 – 12 (1 child) 20,000 – 24,000 p.a. Food 1,500 – 2,500 p.m. Entertainment 1,000 – 1,500 p.m. Clothing Per month – family of 3 500 – 1,200 p.m. Cost of having a child at a hospital in the UAE 9,000 – 15,000 Category D Housing/ rental < 80,000 - possibly shared accommodation (normally apartments only) Housing – levy 500 – 1,000 – possibly included in rent Vehicle (Purchase price) < 50,000 or public transport Vehicle (Financed price) Depending on age of vehicle no finance may be available Electricity/ water 1,000 – 5,000 possibly shared Schooling Kindergarten < 6,000 state schools Arabic medium Schooling Grade 1 – 6 (1 child) < 8,000 state schools Arabic medium Schooling Grade 7 – 12 (1 child) < 12,000 state schools Arabic medium Food < 1,500 Entertainment < 1,000 Clothing Per month – family of 3 300 – 1,000 Cost of having a child at a hospital in the UAE < 9,000 government hosp. only Scenario/ comparative example Category A family of 3, starting out in Dubai, rents a property (levy included in price), gets a company vehicle and purchases on terms a second for his wife. The child attends a good school in grade 6. They find out that they are pregnant and deliver a new daughter at the end of the year. The costs associated are: Property 180k, financed vehicle 2.3 x 12 = 27.6k, schooling 18k, new baby 25k, electricity/ water 8k, food 48k, entertainment 26k = 332.6k Category C family of 3, starting out in Dubai, rents a property (levy included in price), gets a company vehicle and purchases on terms a second for his wife. The child attends a good school in grade 6. They find out that they are pregnant and deliver a new daughter at the end of the year. The costs associated are: Property 100k, financed vehicle 1.8 x 12 = 21.6k, schooling 17k, new baby 15k, electricity/ water 5k, food 2.0 x 12 = 24k, entertainment 12k = 194.6 A Real Budget! I looked through some old files and found a copy of my old budget which I used to try and work to. This is on the premise that I have a wife and young daughter; I had the normal "company perks" vehicle, phone, fuel, maintenance etc. The second vehicle was my wife’s. My wife did not work at that point. I also had accounts to service "back home". My company did not provide air tickets for my wife and daughter each year. I know the rental has increased by about 15% since I used this budget. Typical monthly overheads [percentage figure on the right denotes % expenditure of earnings] Salary 30,000 Rental 8,000 (26.67 %) Apartment levy/ service fee 600 (2.00 %) Water & Electricity 800 (2.67 %) Telephone (pre-paid) subscription (p.m) 17 (0.06 %) Telephone (pre-paid) airtime 200 (0.67 %) Vehicle repayments 1,800 (6.00%) Vehicle insurance & license (p.m) 150 (0.50%) Fuel 150 (0.50%) Showtime 150 (0.50%) Food 4,500 (15.00%) Clothes 400 (1.33%) Baby - food, nappies etc. 500 (1.67%) Baby - play and activity groups 500 (1.67%) Eating out 300 (1.00%) Entertainment 2,000 (6.67%) Luxury items 1,500 (5.00%) Holiday savings (provision) 2,000 (6.67%) Holiday ticket money (provision) 500 (1.67%) Bills back home (transfers out) 2,000 (6.67%) Total 26,067 (86.89% percent of earning) Balance 3,933 (13.11% percent of earning) Savings & Policies The balance of may salary (above) went into two policies which I took out while in Dubai; I had originally intended these for savings and as back-up for my pension. Now, herein lays a moral. When I took the policies out, I hadn’t given much thought to how long I was intending on staying in Dubai (which of course I can see in hindsight), after moving from Dubai I took up a similar position but in another country, here again the salary and benefits were pretty much the same. However, the crunch came when I decided to finish my current contract, and return home for a few months. I thought naively I could en-cash the policies and use them as a down payment on a house. Not so simple, all the small print in the policies then comes out, which after a long, frustrating storey boils down to me only receiving about a quarter of the money that I have paid in over the past few years – and basically loosing the rest. Without the tax-free benefits in Dubai and the favourable exchange rate; there is no way on earth I could take up a position in my home country and continue to pay the instalments on the policies. A sad storey, but hopefully you may learn something from it a) be careful when committing to long-term polices b) read the small print c) if you do take out a policy, make sure that it is for the minimum term, you can always extend it once you have completed the first portion d) check the penalty clauses out in the policies e) remember working in Dubai is a temporary assignment at best – I would have earned and retained more money by simply putting it into a bank savings account! |
| studstar |
| excellent post and good baseline info to have when considering relocating to the UAE, dubai in particular... if anyone can add stuff like school bus, nanny/househelp costs, among others would be great :) thanks dbxsoul |
| Aeliya |
| I will always remain you fan. You seem to be a Human Dubai Encyclopedia for what I know if you so far. |
| Aeliya |
| I will always remain your fan. You seem to be a Human Dubai Encyclopaedia for what I know of you so far. :D |
| Y u c c a |
| Thank you dbxsoul again. This kind of information is exact what I am looking from here. Helps a lot when planning a job from Dubai. |
| TonyK |
| Great info! Thanks a lot, I am sure you could charge for this!! As a newbie, now considering a move to the UAE, this has been a great site. Thanks Tony |