Globally, Hong Kong retained the top spot in this year’s ranking, followed by Singapore. Dubai has climbed three places to become the 15th most expensive city in the world for international employees, according to the latest survey by Mercer.
The rising cost of living in Dubai, the regional financial capital, is largely due to increasing property rentals, which have surged post-pandemic.
According to Mercer’s 2024 Cost of Living City Ranking, rents for three-bedroom properties increased by 15% year-on-year, and overall rents rose by 21% from 2023 to 2024. This rise is among the highest seen in major cities globally.
“Rising housing costs in many cities worldwide have posed challenges for talent mobility. Volatile inflation trends are eroding the purchasing power of international assignees and putting additional strain on their compensation packages. These factors can make it difficult for employers to attract and retain top talent, increase compensation and benefits expenses, limit talent mobility, and raise operational costs,”
Mercer stated in its latest study.
"High living costs may cause assignees to adjust their lifestyle, cut back on discretionary spending, or even struggle to meet their basic needs,"
said Yvonne Traber, Mercer’s global mobility leader.
Real estate consultancy Asteco reported that rents have dramatically increased post-pandemic due to the influx of foreign workers, rising by 100% in popular areas such as Jumeirah Islands, Palm Jumeirah, Dubai Sports City, Dubai Hills Estate, and Damac Hills.
Mercer’s survey covered 226 cities across five continents, assessing the comparative costs of over 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment. New York City was used as the base city, and currency movements were measured against the US dollar.
Additional factors contributing to the increased cost of living in Dubai include the prices of groceries and personal care items. The study found that prices for eggs, olive oil, and coffee rose, while the costs of petrol, haircuts, and blue jeans decreased between March 2023 and March 2024.
Regionally, the next most expensive city in the Middle East was Tel Aviv, which dropped eight places to 16th. Other cities in the region include Abu Dhabi (43), Riyadh (90), Jeddah (97), Amman (108), Manama (110), Kuwait City (119), Doha (121), and Muscat (122).
Globally, the top spots were held by Hong Kong and Singapore, with Swiss cities Zurich, Geneva, and Basel rounding out the top five. On the other end of the spectrum, Abuja and Lagos in Nigeria and Islamabad in Pakistan were ranked the least expensive cities for international employees by Mercer.
News Source: Khaleej Times
