Cost of Living in the UAE: The Expat’s Guide
Unraveling the mystery of life in the UAE? Trying to figure out how much things cost?
Our dad did the same when he moved to Dubai in 2021!
So we’ve got you covered with what he learned!
This guide will give you an insider’s view of what it truly costs to live in the UAE – from housing and transportation, to food and entertainment.
The UAE has a tax-friendly system for its citizens and temporary residents.
There are no taxes on income in the UAE. However, other aspects of daily living are pretty expensive; hence you cannot truly estimate the cost of living in the UAE from one thing.
The rents and prices of residential places skyrocket as soon as you get near Dubai or Abu Dhabi.
The cities of Al Ain and Sharjah are more economically friendly, and the cost of living is typically a lot less than what you would find in the other cities of the UAE.
However on average, the cost of living for a person in the UAE without rent would be near the figure of AED 3,000. But this will vary a lot depending on the location you are in and other variables.
Cost of renting a home in the UAE
Renting is not cheap in the UAE, especially if you are an expat or a foreigner.
The UAE has excellent rules regarding taxes on your income, so you might be under the illusion that your net pay is higher in this country.
However, the high cost of living, including rent and food, will overpower that illusion, and you will soon find yourself in a financial ditch if you did not plan for it beforehand.
Naturally, we will be talking about the main cities of UAE in writing this article. The rent is significantly more in Dubai and Abu Dhabi than in other cities in the UAE.
Average Cost of Renting an Apartment in the Twin Cities of Dubai and Abu Dhabi
Expats and foreigners generally prefer renting apartments in the cities of Dubai and Abu Dhabi because they are relatively cheaper than villas and are easier to maintain during the course of their stay.
The pricing for apartments varies in these twin cities, but we will try to give you a rough estimate of them.
The rent for one bedroom apartment is AED 8,885 and AED 8,055 monthly in Abu Dhabi and Dubai, respectively.
The rent for a two-bedroom apartment is AED 12,760 and AED 11,666 monthly in Abu Dhabi and Dubai, respectively.
The rent for a three-bedroom apartment is AED 16,719 and AED 15,833 monthly in Abu Dhabi and Dubai, respectively.
The high rates should not startle you since these two emirates are the most expensive ones in the UAE.
If you want to look at cheaper options, you should look at the cities of Sharjah and Al Ain. It’s actually pretty common for expats to live in one of those two cities and then work in Dubai or Abu Dhabi.
Average Cost of Renting a Villa in the Twin Cities of Dubai and Abu Dhabi
If you are an expat with a large family and you plan to stay in the UAE for extended periods, then you should consider renting a villa.
The housing areas in the UAE are very peaceful and posh, thus, the rents are skyrocketing yearly as well.
The cost of renting a villa with three bedrooms in Dubai is AED 16,098 monthly, and if you decide to go for a five-bedroom villa, it will cost you around AED 24,886 monthly.
Abu Dhabi, on average, is a bit more expensive, and hence the cost of renting a three-bedroom villa over there is AED 14,015, and if you have a larger family and want to go for a five-bedroom villa, it will cost you AED 25,492 per month.
Some rules about renting in the UAE and other costs as a Foreigner
The lease in the UAE is for about a year, and since the property owners are well protected in the UAE, you should not try to break your lease as well.
You should note that, there are both furnished and unfurnished homes in the UAE.
If you are here for a shorter duration, make sure to check out the furnished ones, while on a monthly basis they are more expensive, you’ll save on the money of buying all the furniture yourself.
Make sure to engage a firm to legalize your contracts and review the fine print and tricky UAE housing laws. The firm will also help you to negotiate should anything go wrong. However, they have hefty fees too.
Utilities are not that expensive in the UAE, and every emirate has its dedicated water, gas and electricity supplier, so you cannot change them either.
However, they are highly regulated and efficient, so you will not have any problems either.
Your monthly utility bill may range from AED 500 to AED 600 depending on how much you use electrical appliances like chillers and ACs during the hotter months.
It also depends on how many rooms you use as well. This is just a rough estimate to help you plan your next step.
Cost of Mobile Phone Plans in UAE
Mobile phone plans are not cheap in the UAE, considering that there are only two network providers in the UAE. Etisalat and du are the oldest in the game in the UAE.
The cost of your mobile phone plan will vary depending on whether you get a pre-paid sim or a contract plan, both of which have their own upsides and downsides.
The contract plans in the UAE usually last for about a year, starting from AED 125 and going up to AED 1,200.
Prepaid Sims are more convenient. However, they are a little unreliable if your credit is finished.
Contract plans allow you greater flexibility and lesser worry.
If you are someone who wants peace of mind and has a steady credit line, then make sure to check out Etisalat’s postpaid plans.
There are a set amount of minutes and text messages given in each package, along with other perks like Amazon Prime Subscriptions.
These postpaid plans start from AED 125, and the allowance for minutes and texts increases as you move up the packages.
Du is cheaper and has better network coverage in the UAE than Etisalat; however, Etisalat offers many more premium features.
Cost of Transportation
There are multiple ways of commuting from place A to B in the UAE. The most popular modes of travelling are by car in this country. However, cycling has been picking up the trend in recent years.
The UAE has a hot climate. Hence cycling is not so feasible throughout the year. We will discuss the cost of some of the standard modes of transportation in the UAE.
Cost of Cycling
Cycling is one of the best ways to travel over short distances, given that it is more engaging and fun for the rider.
Cycling is also very healthy and can help you build cardiovascular endurance and stay in shape!
Bikes in the UAE are not that expensive, and cycles are relatively cheap than other modes of transportation. For added comfort, you can buy used bikes or find them online in various marketplaces.
The price bracket where you can get a decent city bike in the UAE is around AED 400 to AED 700.
The price will depend on the brand you are going for and the type of bike you want.
Make sure to buy a bike which will suit your needs. As riding a mountain bike on street roads will not be an enjoyable experience given the wider tires and lower stance.
Electric bikes are the best to travel to and from work in the UAE. However, these bikes are a bit more expensive. Read our detailed article about buying a bike in the UAE for more details!
Cost of Public Transport
Whenever someone talks about public transport, they usually mention Dubai Metro.
Dubai metro is one of the most modern and well-kept public transport systems in the world; hence, if you need to travel and explore Dubai, we urge you to try the Dubai Metro.
Dubai Metro is operated Dubai Metro and Transport Authority; hence, it is very much regulated and efficient.
The fares on the Dubai Metro depend on the distance you want to travel. Dubai is divided into zones for a better calculation of your fare.
A standard ticket for an adult is AED 4.50 if you want to travel between one or two zones. If you want to go further, it will cost you AED 8.50.
There are certain trim levels and comfort features for which you will have to pay extra.
If you purchase a golden ticket (meaning a more exclusive and usually emtpier carriage at the front of the metro), then you will have to pay AED 8 to travel, one or two zones and AED 17 if you want to travel further.
Transport is cheaper as soon as you move away from Dubai or Abu Dhabi to the rest of the UAE.
Cost of owning a car
Owning a car is one of the significant milestones in your life; hence, you should put a lot of thought and effort into it.
Owning a car in the UAE is not very difficult given the network of dealerships, after-sales services and presence of all the premium brands. However, car prices may vary depending on the car’s make and model and condition.
Owning a car has many hidden costs, such as the purchase price, transfer fees, registration fees etc., which we will discuss later.
You should have all the relevant documents before buying a car in the UAE.
These documents are UAE Residence Visa, Passport, UAE Resident ID, Valid UAE Driving license, and Insurance Documents.
The average price of getting a decent car in the UAE will set you back around AED 105,000.
Along with this, there are insurance and registration fees you will have to pay.
If you buy a new car from the dealership, a 5% VAT tax will be included in the car’s sticker price.
Car insurance also costs a lot in the UAE. The average car, which costs between AED 65,000-75,000, will be insured for a price of AED 3,000-4,000.
When you register your new car with the authorities, you must pay AED 420 for registration. However, if you buy a used car, you will be paid AED 170, 350 and 220 for Technical Inspection, Transfer Ownership rights and Traffic File, respectively.
Cost of renting a car
With soaring inflation rates and a lousy economy, investing in a car right now is probably not the wisest idea. So, a lot of people have shifed to renting a car in the UAE instead.
There are certain restrictions on your rental cars in this country, but you can save a lot of money in the end.
There are some documents you might need if you want to rent a car in the UAE.
Some rentals will just want to look at your passport and international driving license if you are a foreigner.
However, some rental companies who rent out high-end cars are a bit more cautious and want to look at your residence visas, UAE driving license and copies of passport as insurance.
The price for rentals will vary a lot depending on the make and model of the car you are planning to buy.
On average, then it will cost you AED 30 dollars per day for an average small car to get you around the city. However, if you have a large family and want a bit more luxury and space, then you can expect to rent out a luxury SUV for around AED 50-70 per day.
However, if you are looking for more expensive cars like Audis or BMWs, they will cost you around AED 200 per day, depending on the car.
The price for the rentals will always go up depending on how exotic your car is.
The price to rent Lamborghinis and Ferraris for a day will set you back AED 2,500-3,500, depending on the make and model of the vehicle.
Cost of Taxi
Taxis are one the cheapest modes of travel in the UAE. However, your fare may depend on several factors like travelling time, the car you ordered and if you make them wait.
There are several multiplying factors throughout the day, and your fare will change depending on the traffic or hour of the day.
There is a fixed rate per kilometre for these taxis, which is AED 1.82, and apart from that, there is a standard rate, which depends on the time and the type of tax you ordered.
However, for regular cars and during midday, the standard fees amount to AED 12. However, these taxis will charge you if you make them wait a lot, which will cost you AED 30 per hour.
There are many different taxi brands or apps in the UAE that you can use. One of the best app brands is Careem (owned by Uber).
Careem has strict security protocols and is heavily regulated; hence we urge you to try to use it to travel in any city you like when you are in the UAE.
Food Costs in the UAE
Food costs can be a significant factor when moving to a new country. So we gathered some data which will help you understand the costs of eating out in the UAE and generally the price trends regarding edible items in this country.
Your daily food costs will depend on several factors.
What type of food you eat and where you eat it from will play a massive part in determining your total food costs in the UAE.
According to our calculations and experience, the daily minimum you need to spend in a day on food in the UAE is AED 35.
But remember, we are not talking about fancy meals but budget food choices. So this means that monthly it would come to about AED 1,085.
A standard meal in an inexpensive restaurant will set you back about AED 30, whereas dining out in a good café will set you apart from AED 70 per person.
Everyday food items are not at all cheap in the UAE. Things such as bread and eggs are relatively expensive. The reason for such high prices is the fact that almost everything in the UAE is imported.
Banking costs in the UAE
The UAE has a very vibrant banking sector, and hence you will have many options when choosing your banks.
There are more than 60 banks in the UAE alone!
However, these banks can be classified into an investment, commercial, industrial, and Islamic Banks. We wrote about these banks in more detail in our “Best banks for English Speakers” post!
Islamic banks have always been the most preferred ones by the Emiratis, given how they abide by Sharia Laws.
There are many different types of banking accounts in the UAE. Some of them are savings accounts, current, investment, and offshore accounts. There are many costs in keeping and opening up a bank account in the UAE, and in this article, we will talk about some of them.
There should be a balance of AED 5,000 minimum in your bank account.
On top of this, if you need to use another local bank’s ATM, you will pay roughly AED 2 on that transaction.
Each new chequebook after the first one will cost you around AED 25. Moreover, there is an account closure fee of AED 100.
Tax Costs in the UAE
The UAE is not known for their tax costs but rather for the lack of taxes in the country!
The UAE does not levy any income tax, so you are free to keep what you earn by any legal means.
However, there is a VAT tax of five per cent on things you purchase.
Apart from this, there are some individual taxes the government charges for social security needs, and it amounts to five per cent deducted from the paycheck of every individual.
Moreover, the corporate taxes in the UAE are very relaxed well. Unless you are a foreign bank or an oil company, you do not have to pay any taxes to the government. However, this policy will soon be changed in a year or two.
Educational Expenditures in the UAE
Several reports and surveys put the UAE in the top five most expensive countries to study in for international students.
If a child is a UAE national, then their studies are free in public school till 15 years of age. However, for children of foreigners and expats, it’s usually about AED 3,000 to AED 50,000, depending on the school you choose.
Likewise, for an undergraduate international student, you should expect to pay around AED 35,000 to AED 70,000, depending on your chosen field and the university.
Moreover, for a master’s degree, expect to find a program for no less than AED 55,000 to AED 75,000, depending on the nature of your degree.
International students’ living expenses accumulate to around AED 1,200 per month.
Insurance price estimates in the UAE
Life Insurance
Life insurance is generally inexpensive in the UAE. You can expect to pay around AED 5,500 for a premium insurance plan for a year; if you are a family of four, it will come to about AED 35,000. The UAE has many different life insurance plans, like widow endowment, among many others.
Car Insurance
Car insurance is critical when vital when it comes to buying them. You should make sure that your cars are insured.
In the UAE, if your car is valued at over AED 300,000, you will pay around a 2.755% insurance rate.
If your car is valued between AED 100,000 to AED 300,000, you will pay an insurance rate of 3%
Similarly, if your car costs below AED 100000, then you can expect to pay a rate of 3.25%.
Other Costs You Can Expect
Cost of going to the cinema
The average cost of going to the movies depends on the type of cinema you go to and the screen you choose. It really depends on any added features you opt for, like premium seating options or butler services.
You can commonly expect to spend about AED 40 on a ticket in the UAE and AED 50-60 per ticket if it includes a better screen and other luxuries like recliners.
Cost of haircuts
The cost of a haircut also depends on various factors, which means that you pay anywhere from AED 20 to AED 150 for some of the more premium places.
It also depends on the stylist and the type of your haircut. Usually, a haircut with scissors can cost more than a simple fade using a haircut machine.
Cost of Gym memberships
Gym memberships are quite expensive in the UAE. However, it depends on the type of fitness centre you go to and if you engage the services of a personal trainer.
But on average, expect to pay around AED 700 monthly for starter-level gym memberships.
Conclusion
Navigating the cost of living in the UAE can seem daunting, but with the right knowledge and planning, it’s entirely manageable.
Whether you’re considering a move or already living in this vibrant country like our dad, understanding the economic landscape is key to a comfortable life.
Even if you live a simple life with the bare minimum, it would be financially taxing, and your savings will suffer. Hence, make sure to get a good package on your salary or set up your own business in the UAE if you do not want to live paycheck to paycheck.
But remember, the quality of life you experience is not merely about cost but about finding the value and joy in your surroundings.
Happy living!