Dubai and Abu Dhabi are no longer among the world's most expensive cities

Written by:
Siobhan Downes
28th June 2018

But that doesn’t mean the cost of living has gone down…

Abu Dhabi and Dubai have fallen off the list of the world’s top 25 most expensive cities for expats.

The capital dropped from 22nd place to 40th, while Dubai dropped from 19th to 26th in Mercer’s 2018 Cost of Living Survey.

Taking out the top spot for 2018 was Hong Kong, followed by Tokyo, Japan and Zurich, Switzerland.

This year’s ranking included 209 cities and measured the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods and entertainment.

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At this point you might be thinking, how on earth can the UAE have become more affordable, considering the introduction of VAT in January?

Well, it’s important to note that a drop in ranking doesn’t necessarily mean a drop in the cost of living – it just means it’s less expensive when compared to other cities.

Mercer’s research actually showed that inflation in Dubai and Abu Dhabi has risen by 3.5 to 4 per cent over the last 12 months, The National reported.

So, what has caused both cities to fall down the list? Cheaper rent, according to Mercer.

“On the whole, most Middle Eastern cities have dropped in the ranking, due to decreases in rental accommodation costs throughout the region,” said Yvonne Traber, global mobility product solutions leader at Mercer.