UAE’s cost of living spotlighted in survey

Families pay more for a British or Indian curriculum education, but taxi and hotel rates are lower than in other GCC countries, according to figures in the Cost of Living GCC Report.

ABU DHABI // Families pay more in the UAE than in any of the Arabian Gulf states for a British or Indian education, petrol and household utilities.

And only in Qatar are rents higher, a new cost of living study suggests.

The figures in the Cost of Living GCC Report have fuelled fears of an increase in inflation this year.

“All evidence suggests inflationary pressures are undercounted in the UAE, where rents have been rising rapidly. We see inflation accelerating towards 2 per cent,” said Rachel Ziemba, emerging markets research director at Roubini Global Economics, an economic and financial analysis company.

The cost of living report found the average cost of a British curriculum education was Dh50,675, compared with Dh13,751 in Bahrain, the lowest in the GCC.

The average Indian education cost Dh22,000, more than twice as high as Qatar in second place with Dh10,400.

Tuition fees in Abu Dhabi and Dubai are regulated by the local governments, which determine how much schools can charge based on the quality of education they offer.

The cost of electricity, water and sewerage in a three-bedroom apartment was between Dh500 and Dh1,500, compared with Dh106 to Dh300 in Saudi Arabia.

Petrol was also more expensive at Dh1.65 a litre compared with about Dh0.44 a litre in Saudi Arabia.

Petrol prices in the UAE were raised by the government by up to 27 per cent in 2011, but remain lower than in most developed countries.

The UAE had some of the most expensive residential property, the report found. Annual rent on a studio apartment ranges from about Dh11,000 to more than Dh73,000.

Only Qatar, with a range of Dh30,000 to about Dh110,000, cost more.

A residential rent cap was in November removed in Abu Dhabi, while Dubai’s cap was recently increased, both moves expected to further accelerate price rises.

“Dubai will be close to the top of the tree and Abu Dhabi is starting to pick up for this year,” said Matthew Green, head of UAE research and consultancy at CBRE, a property services company. “Qatar is relatively similar in the same trend and although there’s a lot of supply coming through, the government is taking a lot of the allocation off the market so it has quite a bullish outlook.”

There was good news, however, for consumers who visit hotels, travel by taxi and enjoy McDonald’s.

A 3-star hotel room varies seasonally from Dh370 to Dh550 a night, 4-star Dh370 to Dh750 and 5-star Dh750 to close to Dh1,500; a 10 kilometre taxi journey was just over Dh15; and a Big Mac cost Dh10 – all cheaper than anywhere else in the region.