Cost of Living in Abu Dhabi


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The cost of living in Abu Dhabi for expats is steep and is only predicted to rise as the emirate’s oil-exporting economy continues to thrive. Though many move to Abu Dhabi to save money in the tax-free environment, expats should not let delusions of grandeur go to their heads before negotiating their contracts.
 
Salaries in Abu Dhabi have come down from former dizzy heights, and many of the allowances included in expat packages of the past are no longer normal protocol. That said, with the right kind of research, expats can accurately estimate their costs and take the appropriate steps to wrangle for a better wage and the lifestyle they may have imagined.
Cost of living in Abu Dhabi
As is the case anywhere, an individual's cost of living in Abu Dhabi is highly variable; the opportunity to live a life of opulence exists, as does the chance to get by cheaply and conveniently.

One unfortunate reality of the emirate is that nationality plays a primary role in asserting what kind of salary one is able to earn. Bear in mind that Emiratis will always exist at the top of the pyramid, and at no fault of their own, South Asians will make up the lowest tier. Western expats fall somewhere in the middle.

Accommodation, automobiles and schooling (for those with children) comprise the bulk of expenses, while food, clothing and entertainment are generally affordable.

According to the Mercer Cost of Living Survey for 2012, Abu Dhabi was ranked as the 76th most expensive city in the world, ranking higher than neighbouring Dubai, which came in at 94.

Cost of accommodation in Abu Dhabi


No matter one's social status, the costs associated with accommodation in Abu Dhabi are outrageous. Though rental rates have declined slightly since peaking in 2008, expats should anticipate their largest expense to be housing; rent can take up nearly 50 percent of a monthly salary.

On-island accommodation is generally more costly than off-island accommodation, as is the case with furnished and unfurnished housing, respectively.

Single assignees should either negotiate a housing allowance of at least the equivalent of 2,000 USD per month, or should make sure their salary is proportionately inflated to cover this cost. Families will need to haggle for more, depending on their size.

Don't forget to broach the subject of a shipping allowance, or for those planning to buy most of their household goods upon arrival, a start-up stipend.

Utilities are reasonably priced in Abu Dhabi, as they are subsidised by the government. However, utilities nonetheless form part of an expat's account, so be prepared to pay, especially if planning to keep a garden and an air-conditioned villa.

Flat-sharing is a good solution to exorbitant rental rates, but do be careful of renting a room in a villa that has been divided; this is illegal in Abu Dhabi.

Transport costs in Abu Dhabi


Alongside accommodation, the cost of renting or buying an automobile will likely be another major expense for expats in Abu Dhabi.

Public transport is available and economical. Buses cost around 2 AED for a single trip in the city centre, and private taxis are roughly the same per minute; however, Cost of transport in Abu Dhabimost who have relocated to Abu Dhabi prefer to use a car to get around the emirate.

Rental prices for a small to medium, modest vehicle fall just above or below 2,500 AED per month; luxury vehicles will be much more. Monthly payments decrease as the lease period is extended. For those who plan to buy a car, a newer-model used SUV or a mid-range used BMW will cost roughly 100,000 AED.

An option that can save a good deal of money is to ship one's car to Abu Dhabi. Costs vary depending on the location of an expat's home country, and import duties must be paid; but on the whole, if planning to stay in Abu Dhabi for a year, the total cost of both import and export may be significantly less than leasing or buying a car in the emirate.

One unforeseen cost that is impossible to anticipate, but readily avoidable, is the outrageous cost of parking and speeding tickets in Abu Dhabi. In an effort to curb illegal behaviour the authorities have attached hefty fines to these violations. Parking tickets are 200 to 300 AED and speeding tickets are 300 to 400 AED.
 

Cost of schooling in Abu Dhabi


Expat parents with children must certainly work hefty tuition fees into their annual budget. The little ones won't be able to attend the free public school system, and private international schools in Abu Dhabi charge a fortune for an education that, some Westerners feel, is hardly worth the extravagant price tag.

Tuition ranges considerably, with fees at the best schools reaching roughly 70,000 AED per year. Parents can count on paying between 20,000 AED and 50,000 AED for tuition, with additional charges such as school uniforms, annual bus fare, text books and a non-refundable enrolment fee, adding to the costs.

Assignees should try to negotiate an allowance into their salary package. Although education stipends are less common, they do still exist.

Cost of health insurance in Abu Dhabi


In Abu Dhabi, employers are legally required to provide expats with health insurance. So luckily, this is one cost assignees won't need to concern themselves with. That said, some employers use local health insurance, which is not recommended for those at-risk individuals who have significant health issues.

Older expats, or those in poor health, may need to maintain health insurance in their home country and make sure their employer finances emergency evacuation insurance. Otherwise, local health care is up to standard for minor issues.

Cost of food and clothing in Abu Dhabi


Food and clothing costs have the potential to monopolise great portions of an expat's salary, or to cost next to nothing. There is an Market in Abu Dhabiimpressive assortment of cuisine and shopping options in Abu Dhabi, and expats must merely decide how much they'd like to spend to look stylish and to feel full.

Local food stuffs will always be more reasonably priced than imported goods, and ethnic-style (Indian, Arabic, Chinese and African) restaurants much cheaper than hotel eateries and bars. Organic food and Western brands can summon a significant grocery bill, so don't be afraid to try the Emirati equivalents to cut costs.

Furthermore, alcohol is expensive, so try and buy duty-free products in the airport.

Clothing from the Carrefour and the downtown shops is incredibly affordable, while the big names and popular labels found in Abu Dhabi's malls will be expensive. Books and electronics also tend to be more more costly than expats may be used to, and as a result, many purchase these goods during the odd trip home.

Tax equilisation in Abu Dhabi


For those expats lucky enough to be lured abroad by lucrative expat packages with multiple allowances included, it's vital that their work contract includes a tax equalisation stipulation. Essentially, taxes will be deducted for all these generous additions, and expats should ensure their company covers this income tax or pays an extra amount to make sure their employee comes out even.

Cosf of living in Abu Dhabi chart (2013)

Accommodation (annually)
Two-bedroom apartment in the Corniche 140,000 to 170,000 AED
Two-bedroom apartment in Central Abu Dhabi 120,000 to 140,000 AED
Two-bedroom apartment in Raha Beach 140,000 to 180,000 AED
Semi-detached five-bedroom villa 310,000 to 350,000 AED
Shopping
Dozen eggs  8 AED
Milk (1 litre)  6-8 AED
Rice (1kg)  6 AED
Loaf of white bread  4 AED
Whole chicken  9 AED
Pack of cigarettes (Marlboro)  8 AED
Eating out
Big Mac meal  30 AED
Three-course meal at a mid-range restaurant 160 AED
Cappuccino  15 AED
Bottle of beer (local)  30 AED
Coca Cola (500ml)  5 AED
Utilities/Household (monthly)
Mobile call rate (per minute – mobile to mobile)  1.76 AED
Internet (Uncapped ADSL or Cable – average per month)  300 AED
Electricity (average per month for standard household)  500-800 AED
Hourly rate for domestic cleaner 45 AED
Transportation
Taxi rate/km   1.68 AED
City centre bus fare  2 AED
Petrol (per litre)  1.93 AED





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