Both Abu Dhabi and Dubai are relatively cheap cities for professional expatriates to live in now the cost of accommodation has fallen, according to the Worldwide Cost of Living Survey 2010.
The survey, conducted by HR consulting firm Mercer, showed that while the two cities are the most expensive in the Middle East, they are now affordable.
"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, head of Mercer's Dubai office.
Abu Dhabi is the 50th most expensive city in the world for expats, tying with Germany's Frankfurt, while Dubai is ranked 55th, tying with Los Angeles.
Jo, a Dubai resident from the UK, told 7DAYS she had seen a huge difference in rental costs.
"Rents in Dubai have always been ridiculously high and now that they are coming down, it makes it more affordable for families to upsize whether that is a larger apartment or villa or a move from an apartment to a villa, which is what we did," she said.
However, she added that she still found the general cost of living high in the emirate.
"Petrol has recently gone up and general items around the super-market have increased," she said.
Inflation in the UAE hit a one-year high of 0.88 per cent on an annual basis in May, the National Bureau of Statistics said.
The country had seen months of deflation, but analysts expected prices to rise slightly this year, helped by the economic recovery.
Consumer prices started to rise in March, reaching 0.79 per cent in April. House prices have a 39 per cent weight in the overall basket that comprises the index.
Top 5 most expensive cities
1. Luanda, Angola
2. Tokyo, Japan
3. Ndjamena, Chad
4. Moscow, Russia
5. Geneva, Switzerland
While it's no surprise that Tokyo is costly, not everyone would expect two African cities to be in the top five. Markus Wiesner told 7DAYS that "the cost of International goods and expatriate standard accommodation in some African cities can be very expensive due to the limited supply."
© 7Days 2010
