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Residents rue high cost of living in the UAE

Lily B. Libo-on / 21 October 2010

DUBAI/SHARJAH — Residents and visitors are feeling the pinch as the cost of living rises in the UAE. Rents may have fallen, but salaries have remained stagnant and many have reason to complain about life in general.

Many expatriates Khaleej Times spoke with said their current salaries are inadequate to buy basic household commodities and pay school fees of their children.

Priya Sreeram, 40, who has been living in Sharjah for seven years, reminisced about the easy life they had before. “Now, everything is increasing. The cost of living is so high that most expatriates have a hard time making both ends meet.”

She said the salary is still the same and has not risen to meet high inflation. “Without salary increases, how can expatriates survive?”

Pallavi Nigede, 26, who has been in the UAE for two years, said things are getting difficult for her. “The school fee of my son in the nursery is Dh850 every month. I don’t know how much it will be the next year? Prices of vegetables, flour and basic commodities have risen. Even the Internet service is getting expensive. But, the salary is still the same.”

The nature of inflation faced by residents is clear in 29-year-old Abigail Villarba’s experience. The Filipina said she used to set aside Dh400 per month for family’s food requirements. These days, she is spending Dh1,500 for food alone for the same number of  family members as before. “I got a Dh500 increase in my salary after three years of service, but it’s not enough to cope with the high prices of commodities.”

She also feels the double whammy of high cost of living and the rising cost of education. “I used to pay Dh8,000 in school fee last year. This year, it is already Dh9,000. Transportation is getting costlier as minimum taxi fare in Dubai and Sharjah has gone up to Dh10. Even housing remains expensive because not all realtors have lowered rents. On the other hand, overtime work in the office is not also properly commensurated.”

The difficulty in coping with the high cost of living has prompted many to return to their countries.

Sofiya Murtuza Daruwuiu, who has been in the UAE for nine years, told Khaleej Times that many Indian expatriates had sent their families home due to the difficulty in adjusting to the shrinking savings. Her sister-in-law, Sakina Mohammedi Daruwala, 23, said her family was sharing accommodation with Sofiya to survive amid the high school fees and cost of household items, particularly vegetables and flour, which are the basic food for all.

Asian expatriates are not the only ones feeling the pinch. Omani visitors Ali Anjaba and Hani Salam told Khaleej Times that spending holidays in Dubai and Sharjah were easier and cheaper before. “This time, it is still good to come for holidays but the cost of services and food has gone up.”

Fall in rents

Meanwhile, a survey by Kershaw Leonard for 2010-2011 found living costs down with the decline in rents in Abu Dhabi and Dubai.

For example, rents for a three-bedroom apartment in Dubai currently range from Dh80,000 to Dh180,000, a steep fall from the highs of Dh300,000 in 2008. A three-bedroom apartment in Al Barsha can now be rented at 17 per cent less than in September 2009.

The report also highlights the disparity in rental costs between Dubai and Abu Dhabi where a three-bedroom apartment may cost anywhere between DH135,000 and Dh240,000.

Despite the decline in rents, education, healthcare and household utility costs remain at high levels making Abu Dhabi and Dubai among the most expensive places to live in the GCC.

According to the report, many private schools in the UAE have continued to increase their fees to the maximum permissible levels. School fees are at their highest in Dubai where annual fees for an International Baccalaureate school can exceed Dh90,000.Kershaw Leonard’s managing partner, Mike Hynes, said, “This report reveals a dramatic readjustment in key cost of living indicators as a result of the global economic downturn and an oversupply of housing stock. Freehold prices for both villas and apartments in Dubai have fallen by as much as 40 per cent in Dubai in 2010 and tighter bank lending rules seem certain to limit the extent of any short-term rebound.

“Villa and apartment rents in Dubai and Abu Dhabi have also fallen by similar amounts. However, while freehold property prices appear to be levelling out and in some cases making some modest gains, rental prices are still heading south.”

The report assesses the impact of cost of living fluctuations on three typical real-life examples. The scenarios used include an Asian expat family living in Sharjah, a single young advertising executive living on Shaikh Zayed Road in Dubai and a Western expat family owning a home in The Meadows.

lily@khaleejtimes.com

 
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