Dubai and Abu Dhabi have been ranked as the 23rd and 33rd most expensive cities to live in (respectively) according to Mercer’s 2015 Cost of Living Survey.
The two cities have experienced a significant jump compared to 2014, with Dubai soaring 44 places from last year’s position at 67 and Abu Dhabi going up 35 places 68th in 2014.
Steep increases for expatriate rental accommodations in both cities partly drove this rise up the list, Mercer said.
Dubai and Abu Dhabi are the most expensive cities in the Middle East for expatriates, as Jeddah (151) continues to be the least expensive city in the region despite rising 24 places.
Significant increase in the cost of living ranking is seen among almost all major Middle East cities, with both Manama (91) and Doha (99) moving up 59 places, Amman (54) moving up 49 places, Riyadh (71) moving up 40 places, Kuwait City (117) moving up 30 places, and Beirut (44), the most expensive Middle Eastern city after Dubai and Abu Dhabi, moving up 19 places.
“Many currencies in the Middle East are pegged to the US dollar, which pushed the cities up in the ranking. Global currency fluctuations was a key factor influencing the significant changes observed in the overall raking in 2015,” said Nuno Gomes, information solutions leader for ME at Mercer.
“Steep increase for expatriate rental accommodations, particularly in Abu Dhabi and Dubai, has also contributed to the increase of the cities in the ranking,” added Gomes.
Although these increases in the ranking do not have a direct impact on employees currently working and living in the UAE and other countries in the region, the cost for multinationals to move staff to Middle East countries has greatly increased over the last year, potentially reducing the attractiveness of the region for such assignments, he said.
According to Mercer’s 2015 Cost of Living Survey, Asian and European cities – particularly Hong Kong (2), Zurich (3), Singapore (4), and Geneva (5) – top the list of most expensive cities for expatriates.
The costliest city for the third consecutive year is Luanda, the capital of Angola. Despite being recognized as a relatively inexpensive city, the cost of imported goods and safe living conditions in this country are available at a steep price.
Other cities appearing in the top 10 of Mercer’s costliest cities for expatriates are Shanghai (6), Beijing (7), and Seoul (8) in Asia, Bern (9) and N’Djamena (10).
The world’s least expensive cities for expatriates, according to Mercer’s survey, are Bishkek (207), Windhoek (206), and Karachi (205).
The survey includes 207 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.