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Five reasons why Dubai living costs are falling

Five reasons why Dubai living costs are falling

It’s still not the cheapest city in the world, but with inflation at a five-year low, many essential items are becoming more affordable.

February 16, 2010 4:02 by



Dubai’s inflation rate sunk to a five-year low in 2009 – something that was, for many residents, a relief after enduring years of spiraling living costs.

According to the Dubai Chamber of Commerce and Industry (DCCI), quoting figures from the Dubai Statistics Centre, the cost of living rose by just 4.1 percent last year – far less than the 11.3 percent increase in 2008, the highest inflation rate in over 20 years.

“This trend has clearly reversed in 2009 due to the resurgence in the US dollar, falling commodity prices, a correction in the real estate sector and weakening domestic demand,” a statement from DCCI said.

This drop in inflation will have “positive implications for doing business in Dubai in 2010,” the body said. Here are a few reasons why you may have more money in your pocket than you did two years back.

1. Rents

The real estate sector in Dubai was hit hard by the financial crisis, and analysts predict that this year, the power is moving from the landlords to the tenants. And as property prices fell, rents followed suit.

Residential rental rates in Dubai slumped 41 percent in 2009, according to real estate consultants CB Richard Ellis (CBRE). The report further noted that landlords are now offering “rent free periods, inclusion of service charges, and multiple cheques”. Commercial rents in the emirate also dropped 34 percent last year, according to a recent DTZ research report, and retail rents too have fallen.

A report by Jones Lang Lasalle said that rents in all three sectors plummeted around 40 percent last year.

“This strong drop in rental accommodation, commercial real estate and warehousing, will certainly have further positive implications for doing business in Dubai in 2010,” said the DCCI report.



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2 Comments

  1. Optimistic on February 17, 2010 9:52 am

    I am glad to hear this news. I have seen prices drop particularly when shopping for essentials.This can only get the average resident in Dubai back on their feet. We need to hear more positive news like this (as long as it truthful and unbiased).

     
  2. Anupama V. Chand on February 18, 2010 7:17 am

    Really? Do we residents of Dubai believe this to be true? I am afraid not….if there is one thing living in Dubai over some 10 years has proved, it is not to buy into these research details without a pinch of salt…..Real estate prices and rentsfaslling, I will grant you, but as far as prices of essential items and transportation costs are concerned, any average resident who has to get from point A to point B, in public transport will tll you that is all cock and bull. The Metro, despite its early premise of being a cheaper, more convenient form of commute, has not lived up to its claim – the ost of a family of four taking the Metro from point A to Point B and back again to Point A, is around the ame as if they took a taxi. That is because while it is advantageous for one person to take the Metro, for a whole family the taxi is more affordble…..and the more things seem to change, the more they remain the same…..even when it comes to food, prices of most items like oil, rice and flour, bread and dairy products have only gone up…where is the coming down? Or is it just me that can’t seem to see it? As for discounts, don’t be led astray? There is no such thing as a free lunch, and Dubai exemplifies the spirit if that adage, muh as I love this city! Let’s get a reality check on Etisalat and Du too….more money-minded telecommunications operators one would still have to come across….from substitute or replacement SIM cards to getting your evision connection cut off at the stroke of the mid-night hour, if you haven’t got eugh in th balance account, it’s all happening in Dubai, thanks to these two. And their cat-and-mouse games for customer loyalty are just that, as everyone knos they are all run as one unit when it comes to back office. Sorry to sound a deprecating ote on all the optimism, but let’s get realistic when we send out such messages to the world at large. Dubai could much more benefit from a transparent image, rather than one disguised in rainbow hues!

     

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