The UAE's two big centres have left the ranks of the globe's dearest cities after a sharp decline in rents and property prices, a survey shows.
Dubai and Abu Dhabi drop out of 'world's most expensive cities' rankings
Dubai and Abu Dhabi have left the ranks of the world's most expensive cities after a sharp decline in rents and property prices, a survey shows. Dubai tied for 55th position with Los Angeles, dropping from its rank of 20th last year. Abu Dhabi ranked 50th this year, down from 26th last year, says Mercer, a human resources consultancy. The drop was also exaggerated by the addition of nearly 60 cities to the list.
"While across the UAE the cost of living has remained relatively stable, we are seeing that accommodation costs have continued to decrease in Abu Dhabi and Dubai, driving down the cost of living for expats," said Markus Wiesner, the head of the Dubai office of Mercer. Home prices and rental rates have been cut in half across Dubai and Abu Dhabi since their peaks in late 2008. And they are expected to keep declining on average, as thousands more flats and villas are added to the market this year.
Dubai property prices may have a further 15 per cent to fall, Bank of America Merrill Lynch said in a report last month. "Even if all qualifying expatriates from Abu Dhabi and Sharjah relocated to Dubai tomorrow, we estimate that there would still be 44,000 vacant units in 2010," the report said. The fall inprices also led to residents leaving cheaper housing on the outskirts of Dubai and other emirates for better-quality homes.
Brokers have described the move as a "flight to quality", where Sharjah residents moved to middle-income housing in places such as Discovery Gardens and people living in older buildings in Deira found new accommodation in developments such as Jumeirah Beach Residence. Luanda, the capital of Angola, remained the world's most expensive city. Renting an average-quality apartment can cost in the tens of thousands of dollars a month because of a dramatic undersupply of homes for the expatriate community involved in the reconstruction of the country.
It is followed by Tokyo, Japan, and Ndjamena, in Chad. In another survey by Mercer on quality of living, Dubai ranked 75th best city in the world, compared with 77th last year. Abu Dhabi dropped to 83rd best city to live in from 72nd last year. firstname.lastname@example.org