Dubai has made significant leaps on the list of the most expensive cities for international employees, now ranking 15th globally according to Mercer’s latest survey. The increase in the cost of living in Dubai is primarily attributed to rising property rentals, especially after the pandemic hit. The survey revealed that rents for three-bedroom properties increased by 15 percent year-on-year and by 21 percent from 2023 to 2024, making Dubai one of the most expensive cities for housing costs.
Mercer’s study highlighted the challenges faced by employers due to rising living costs in major cities worldwide. The volatile inflation trends are affecting the purchasing power of international assignees, making it challenging for companies to attract and retain top talent. This situation may lead to increased compensation and benefits expenses, limit talent mobility, and raise operational costs, as pointed out by Mercer’s global mobility leader, Yvonne Traber.
Asteco’s real estate consultancy data shows a significant increase in rents in Dubai, particularly in popular areas like Jumeirah Islands, Palm Jumeirah, Dubai Sports City, Dubai Hills Estate, and Damac Hills. This surge in rents is attributed to an influx of foreign workers post-pandemic. The survey encompassed 226 cities across five continents, assessing the costs of over 200 items in each location, including housing, transportation, food, clothing, and entertainment, with New York City as the base city.
Apart from housing costs, groceries and personal care items also contributed to Dubai’s increased cost of living. Prices of items like eggs, olive oil, and a cup of coffee saw upticks, while prices of other items like petrol, haircuts, and blue jeans decreased between March 2023 and March 2024. Regionally, Tel Aviv followed Dubai as the next most expensive city in the Middle East, dropping eight places to rank 16th, with Abu Dhabi, Riyadh, Jeddah, and other cities in the region also featuring on the list.
Globally, Hong Kong retained its top spot as the most expensive city, with Singapore closely behind. Swiss cities Zurich, Geneva, and Basel rounded out the top five most expensive cities. At the other end of the spectrum, Abuja, Lagos in Nigeria, and Islamabad in Pakistan were ranked the least expensive cities for international employees by Mercer. The survey provides valuable insights for companies and employees navigating the complexities of global talent mobility and cost of living considerations.
