Dubai is among the cheapest cities to live and work as compared to 12 other major real estate markets, as cost of accommodation has fallen significantly in the past seven years, says a new report.
In its '12 Cities: Occupying and investing in world city real estate' report, Savills World Research said the cost of accommodation in the emirate was down 13.9 per cent to $59,426 per year as of June 2015 from $69,012 per year in December 2008.
“Cities with more availability, such as Dubai and Singapore, have seen rents fall, so live/work accommodation rents in these cities are now 14 to 17 per cent lower than they were in 2008. Dubai rents are now growing, while Singapore’s were still falling in the first half of this year by 3.7 per cent,” Yolande Barnes, Director, Savills World Research wrote in the report.
International real estate consultancies had predicted a 5 to 10 per cent decline in rentals during 2015, but local experts have pointed to lower rental percentage declines.
The Savills report puts Mumbai as the cheapest city where it costs only $29,088 to accommodate an employee despite the cost edging up by 2.4 per cent since 2008. London was the costliest ($118,425) followed by Hong Kong ($116,661) and New York ($114,208) on the list of the most expensive cities for companies to accommodate employees.
In Shanghai, the cost to accommodate an employee rose by 15.6 per cent to $38,089.
“The biggest rent rises have taken place in cities where supply is at its scarcest. A good example of this can be seen in San Francisco, where live/work costs have risen by nearly 60 per cent since 2008.
"Demand has been driven by businesses that want to be based in the top, high-performing, creative digital city, alongside households preferring urban living to suburban sprawl,” the report said.
Average cost per head across the 12 leading world cities was reported at $74,945 per year, which is 1.4 times the average city gross domestic product per head of population.
The index, which measures the combined cost of residential and office rental per person per year, found Sydney and Los Angeles to offer the best value live/work rent combination at 70 per cent and 80 per cent of per head GDP respectively.
In July 2015, Numbeo, one of the largest database of user contributed data about cities and countries worldwide, had ranked Dubai at 212 out of the 517 most expensive cities on its index, which calculates the ranking based on a range of costs, including rentals, groceries, travel, eating out and clothing, etc.
But Mercer’s 2015 Cost of Living Survey, released in June 2015, said the annual increase in cost of living had risen steeply in Dubai and Abu Dhabi in 2014, with Dubai being placed 23rd most expensive city in the world.
UBS also in its latest report said housing costs in the emirate were high compared to the 71 cities it analyses worldwide, but added that average rent were cheaper for an expatriate compared to Hong Kong, London, New York and Doha.