Dubai: Dubai is becoming more affordable to live and work in, according to a report released on Tuesday by UK-based property group, Savills.
The emirate is ranked the world’s 9th most expensive city for companies to locate employees, overtaking the likes of Shanghai and Rio De Janeiro, according to the Savills report. The ranking has dropped a notch since 2008 when Dubai was placed 8th in the index.
London, meanwhile, was ranked the world’s most expensive city for companies to locate employees, overtaking Hong Kong, which had topped the ranking for five years. Hong Kong was followed by New York, Paris, Tokyo, Singapore, Moscow and Sydney.
The drop in the ranking was achieved despite Dubai having witnessed a 12 per cent growth in rents in the first six months of the year, and high price growth in its residential markets, with values up 22.8 per cent during the period.
Lower cost of living
The cost of living and working in Dubai were deemed 16 per cent lower than in 2008, as per the survey.
“Mortgage caps and the doubling of property transfer taxes from 2 per cent to 4 per cent appear to be having little impact on the market, perhaps because investors are aware of the fact that prices in the emirate are still 28.2 per cent below their 2008 peak and, at the same time, rents are rising substantially,” Savills stated in the report.
However, the rise in rents in the emirate may cease in the short-term. Around 19,000 new homes are expected to enter the market in 2015, which is substantial for the city to absorb in a short period of time. According to real estate consultancy CBRE, rents declined 1 per cent during the third quarter after 10 consecutive quarters of increases.
Dubai accommodates staff at $52,149 per employee per year, followed by Shanghai, Rio De Janeiro and Mumbai, at $43,171, $32,179 and $29,742 respectively.
“As the city matures and finds itself better established on the world stage, its long-term prospects are looking more positive,” the report said of Dubai.
The emirate’s tourism and conference industry has fuelled luxury hotel rates, which are “third only to Paris and London”, Savills said. The index measures the total costs per employee of renting, living and working in 12 cities across the globe. It involves office costs, taxes and fluctuating exchange rates.