The UAE has turned into one of the most affordable countries in 2021 due to a consistent fall in rent, property prices and cost of education, transportation and dining out, among others.
As per the global data service provider, Numbeo’s Cost of Living Index 2021 the UAE got dropped from 32nd place in 2020 to 37th this year. Experts point out that the decline in the cost of living is due to the stimulus boost provided by the UAE government to support the economy from the COVID-19-hit.
The rental index score declined from 41.07 in 2020 to 40.62 points this year while the restaurant index dropped from 61.32 to 61.25 points while the cost of groceries increased from 47.63 to 48.84 points due to the impact of lockdowns on imports and trade during the second quarter of 2020.
“The core reason behind this is the decline in inflation through second quarter 2020 till the end of the year. With weak domestic price pressures because of the restrictions placed on the economy since the end of March have also had an impact on inflation, which fell for nine months in a row,” Anurag Chaturvedi, CEO of Chartered House, said.
During the past 10 months, consumers were only able to buy online, where prices of commodities, essentials, clothing and household dropped as retailers sought to shift stocks of unsold merchandise. An increase in food and beverage prices offered the only significant upward effect on inflation last year.
The residents were less burdened due to online education where they saved on transport and discounts on fees. Further, more buyers saved on deferring optional medical treatment because of COVID-19, Mr.Chaturvedi added.
“The latest Consumer Price Index (CPI) statistics in the UAE, retail inflation fell 3.8 percent during 2020. The housing and utilities category, which constitutes the highest relative weightage of 43 percent in the CPI, dropped by 7.9 percent during this one year, declining steadily month-on-month. This fall has been the result of rents witnessing a downward trend across the residential property market in the country.”
A lower cost of living within popular expat hubs Dubai and Abu Dhabi possibly will ease pressure on residents’ finances and make these cities more attractive for potential expats looking to move here. With the falling house rents and new residential supply entering the market expats can choose where they want to live, making upgrades feasible.
Numbeo data further showed that, regionally, Israel is the expensive city in the Middle East and North Africa (MENA) region which is ranked ninth globally followed by Lebanon (ranked 24th), Qatar (35th), the UAE (37th), Bahrain (41st), Palestine (44th), Jordan (55th), Yemen (58th), Saudi Arabia (62nd), Kuwait (63rd), Iran (83rd), Iraq (112th), Egypt (123rd) and Syria (129th).
Across the globe, Jersey and Bermuda are the two most expensive countries to live in, dethroning Switzerland from the top position to third in 2021. Other countries in the top 10 include Norway, Iceland, Denmark, Luxembourg, Japan, Israel and Bahamas. While Pakistan is the most economical country rated by Numbeo at 139th followed by Libya, Kyrgyzstan, India, Afghanistan, Uzbekistan, Georgia, Zambia, Algeria and Nepal.