Cost of life in Dubai

Check how much you need to afford comfortable life in Dubai

Most people think Dubai will be a crazily expensive place to live. The city has certainly positioned itself as a super-luxe tourist destination, with the "seven-star" Burj al-Arab hotel charging nearly $2,000 for a room. But while Dubai is never going to get top rating on a list of the world's cheapest places to live, it can be quite affordable.

While a high working expat population has pushed up rents, it's a relatively cheap place to buy (as we pointed out in our piece on the best places to buy in Dubai). That's responsible for the interesting wrinkle that according to Numbeo, Shanghai is a third cheaper than Dubai if you rent an apartment - but not if you buy, in which case, Dubai wins out.

According to the Economist Intelligence Unit, Dubai is the 58th most expensive city globally. It's 28% cheaper than New York, for instance. Numbeo, which gives detailed comparisons of living costs, rates it as a third cheaper than Paris.

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What are the daily life expenses in Dubai?

Let's look at a few of the details. First off, services bills can be high. A landline, TV package, and mobile will cost about AED 300 a month each - so that's taking AED 900 out of your budget straight away (more if you have multiple smartphones in the family). Electricity is not going to be cheap if you're running the air conditioning full blast. For a larger villa the bill could be up to AED 6,000 a month in summer, falling to half or a third of that in winter; obviously, it will be less for an apartment.

On the other hand transport is cheap. Petrol is less than half the price you'd pay in Europe, at about AED ~2.5 a litre, and if you buy a car you can expect to pay 20% less for it, too. A monthly public transport ticket costs about the same as a weekly ticket for zones 1-3 in London, at AED 230.

As for groceries, your bill will depend on whether you're happy to use local food supplies and home-cook your meals, or whether you want pre-packed western style food. The latter is obviously going to be more expensive; but the mark-up is surprisingly large. A bottle of tomato ketchup can cost AED 17 - four times what you'd pay in the UK or France!

Alcohol is also comparatively expensive. Imported beer can cost AED 14 for a 33cl bottle, or AED 45 (£9) in a restaurant. On the other, hand eating out need not be crazily expensive; a mid-range three-course meal might cost two people AED 200. (Of course, add a few beers and that amount can increase dramatically.)

What else to consider when calculating your budget?

There are, however, two big costs that you'll have to consider if you are moving permanently to Dubai rather than just buying an investment property that you use on an occasional basis. One is health insurance, which might cost from AED 5-6,000 for a young single person to AED 30-40,000 for a family of four per year, assuming you'll want to have comprehensive cover. The other is education. If you have kids and you want them to go to a British curriculum school, for instance, you'll be paying out from AED 30,000 to AED 60,000 a year or more - each.

So what level of income will you need to live comfortably in Dubai?

Though obviously you'll want to take your own circumstances into account, Numbeo suggests AED 10,243 a month for a family of four, without factoring in property costs: that's about £2,000 a month. A single person, on the other hand, can live well on a fraction of that - AED 2,988.

Dubai isn't bargain basement. You can enjoy the same lifestyle in Quito, Ecuador for half the price - but you won't get the fantastic choice of entertainment and shopping, or the high-tech infrastructure, that Dubai can provide. Lisbon, Portugal is a better comparison as far as infrastructure and entertainment is concerned, and is about 20% cheaper all round. But Dubai has an atmosphere all its own - an ambitious, high-rise modern city -and you can experience that at a surprisingly reasonable price.