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Cost of living drop continues
Plus: How retail sales in the UAE are set to skyrocket… Kipp takes a look at the latest numbers.
October 17, 2010 1:26 by Samuel Potter
The latest figures have underlined the widely perceived fall in cost of living in the UAE, just as a new forecast says that retail sales – and presumably the economy with them – are set to skyrocket.
In its annual Cost of Living report, Kershaw Leonard confirms what most of us already know: thanks to the slump in property prices, the cost of living and working in the UAE has declined in the past 12 months. In its seventh annual report, the Dubai-based recruitment consultancy found that Dubai led the drop with freehold prices for villas and apartments falling by as much as 40 percent.
“Villa and apartment rents in Dubai and Abu Dhabi have also fallen by similar amounts. However, while freehold property prices appear to be levelling out and in some cases making some modest gains, rental prices are still heading southbound,” says Kershaw Leonard’s Managing Partner Mike Hynes in his press release spiel.
But resilient prices in education, healthcare and household utilities remain high, and thanks to these the UAE is the most expensive place to live in the GCC. “The past twelve months have demonstrated just how quickly trends can change,” continues Hynes, before launching into the sales pitch: “The UAE Cost of Living Report now has seven years of historical data on which to base comparisons and make predictions. In addition, the report provides informed commentary and insights from leading industry sources.”
Read more, if you can afford it, here.
Meanwhile a forecast from Business Monitor International says economic growth, wealthy expats, and increased urbanization will see retail sales in the country leap by 30 percent over the next four years, taking annual spending to AED 97 billion. The majority of this spending increase will be on cars, food and drugs (pharmaceuticals, not the other kind).
So if you’re looking for investment options, you could do worse than those three areas: pharmaceutical sales are expected to leap by almost 50 percent, while car sales should jump 34 percent. Food sales will find their way to an 18.4 percent increase.
Not all the action will be UAE based, however: BMI predicts that the country’s share of the UAE market will shrink a little over the coming years – from 10.3 to 10.1 percent. And evidently this relative shift will have more to do with fast growth in other countries than a UAE contraction, since the emirates economy will be expanding as well – GDP could grow by an average of 4.1 percent annually from now until 2014.