Is Dubai expensive? An honest analysis of the price level

Dubai is known worldwide for its luxury. Think 7-star hotels, golden cappuccinos, and supercars at the traffic lights. This image prompts many potential expatriates and investors to ask: is dubai expensive for the "average" expat? The answer is more nuanced than it seems. Certain aspects of life are quite expensive, yet others are surprisingly affordable. And of course, the price level should always be compared to net disposable income.

In this article, we analyze Dubai's cost structure and compare it to the Netherlands, supported by data. So read on!

The biggest expense in Dubai is housing and education

When we look at fixed costs, two categories stand out as the ones that consume a large portion of the budget: rent and education. Rents in Dubai are volatile and highly dependent on the neighborhood. A studio apartment in a suburb like Jumeirah Village Circle (JVC) costs around AED 40,000-60,000 per year. This is equivalent to €10,000-15,000.

A two-bedroom apartment in a prime location like Dubai Marina or Downtown can easily cost AED 150,000-200,000 per year, equivalent to €38,000-€50,000. Compared to the private sector in Amsterdam or London, the prices per square meter are often comparable, but in Dubai, you often get access to a swimming pool, gym, and security in the building.

Is Dubai expensive with kids?

Education is often a significant expense. Expats rely on private international schools. Costs vary significantly depending on the curriculum (British, American, IB), but expect to pay between AED 40,000 and AED 90,000 per child per year.Knowledge and Human Development Authority monitors the quality and fees of schools.

Daily expenses such as groceries and transportation

Imported products like cheese from France and strawberries from the Netherlands are more expensive due to transportation costs. Those who choose local products or imports from regions like India, Pakistan, or Egypt can shop relatively cheaply. Alcohol is a special case; because it's taxed, a glass of wine or beer in a restaurant is considerably more expensive than in Europe. Prices of €12 to €15 per drink are common in bars and restaurants.

There's one area where Dubai is cheap. Gasoline prices, despite increases, are still well below European levels. Taxis (RTA Taxi) are also very affordable. A 20-minute ride often costs no more than €10-15.

The impact of taxes on your purchasing power

To determine "is Dubai expensive," it's important to look at more than just expenses. You need to consider the bottom line. In the Netherlands, you easily pay 37% to 49.5% income tax on a modal to high income. In the United Arab Emirates (UAE), there is 0% income tax for individuals. A 5% VAT was introduced in 2018, but this is still very low compared to 21% in the Netherlands.

Suppose you earn €5,000 gross per month. In the Netherlands, you'd have approximately €3,300-€3,500 net left. In Dubai, you'd have €5,000 net left. This difference of €1,500 per month more than offsets the higher rent or grocery costs for many people.

Is Dubai expensive for healthcare?

Healthcare in Dubai is world-class, but privately managed. Health insurance is mandatory for every resident. For employees, this is often partially covered by their employer. For investors and their family members, you must arrange it yourself. Premiums can range from basic (AED 2,000 per year) to very comprehensive (AED 20,000+ per year). The healthcare authority Dubai Health Authority sees to this.

Are there hidden costs associated with housing?

If you're wondering "is Dubai expensive?", you need to look beyond the basic rent. There are specific cost items in Dubai real estate that we don't see in Europe.

A key term is "Chiller Free." In many apartment buildings, the air conditioning is centrally controlled via a district cooling system like Empower or Emicool. If your apartment isn't "Chiller Free," you'll pay a fixed monthly fee for the capacity and a fee for consumption. This can add up to hundreds of dirhams extra during the summer months. When searching for a place to live, it's therefore financially very attractive to filter by apartment buildings where the landlord covers these costs.

There are also start-up costs. Is Dubai expensive to live in? Keep in mind living in Dubai takes into account the brokerage fee and deposit. You should also take into account the Ejari, these are the costs for registering the rental agreement. Would you like to know more about this, or how we can handle this for you in a cost-effective way? Please feel free to contact us. We'd love to think along with you!

Communication and the Internet

One category that is noticeably expensive in Dubai compared to the Netherlands is telecommunications. The UAE operates under a duopoly with two major providers, Etisalat and Du. Competition is limited, and this is reflected in the prices. A home internet connection with a TV package can easily cost AED 350 per month. Mobile data is also more expensive. An unlimited data plan costs more than in Europe. Video calling via WhatsApp or FaceTime is often blocked by providers in the UAE. You'll have to rely on alternatives like Zoom, Microsoft Teams, or the BOTIM app, which sometimes require a subscription.

The Pitfall of 'Lifestyle Inflation'

Finally, a psychological factor that determines whether Dubai is expensive is your own behavior. Dubai is a city of temptation. "Brunch" on Fridays or Saturdays is often all-inclusive at luxury hotels, which can cost up to €150 per person. Beach clubs, valet parking, and luxury cars are part of the street scene.

Many expats fall prey to "lifestyle inflation." They earn more thanks to tax breaks, but also spend exponentially more to maintain their newfound status. Anyone who gets caught up in the glitz and glam will find Dubai extremely expensive. There's also a less-seen-than-expected flipside: you can easily get a haircut for €2.50 or enjoy a delicious Indian or Pakistani meal for €4. And if you maintain a normal lifestyle, cook for yourself, and enjoy the free beaches and parks, you can save a considerable amount with a good salary!

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