eFinancialCareers

Escalating property prices and double digit inflation might be touted as reasons for failing to attract expat talent to Dubai, but the Emirate has actually tumbled down the world’s most expensive cities rankings.

Dubai comes in as the 52nd most expensive city in the world, down from 32nd last year, while Abu-Dhabi is number 62, falling from 45th in 2007, according to a survey by Mercer.

The good news for bankers and financial services types is that the cities rank below most of the other financial centres. London, Tokyo, New York, Paris, Zurich, Moscow and Frankfurt all feature above them.

The Russian capital is the most expensive place to live in the world, followed by Tokyo and London, with Oslo in Norway jumping from 10th to 4th.

Inflation in Dubai has reached a 20-year high of 11.4%, according to figures from Reuters, and research into property prices by Abu Dhabi Department of Planning showed an average rent rise of 49% since June 2007.

How, you might ask, is Dubai still so far down the rankings? Yvonne Traber, a principal and research manager at Mercer, said that the tumbling dollar against a strengthening euro and other currencies, has led to the shift.

Alex Cormack, director, head of Middle East at recruiters Sheffield Haworth, says Dubai’s reputation as being expensive hasn’t put off bankers moving to the region, but they’re becoming more demanding on pay.

“Just because it’s tax free and the standard of living is better, people don’t want to compromise on compensation and get less than they would in London or New York. Dubai is not a cheap place to live, and one of the perks of coming out here is to earn money tax free, so therefore people don’t want to see a reduction in their gross compensation.”

Pay now makes up around 60% of banks’ operating costs in the GCC, according to figures from Hewitt Associates. The increase is said to be down to the escalating expectations of expat workers.