Dubai is no longer an expensive destination, but this doesn't mean more bankers want to move there
Good news; it's now decidedly cheaper for expats to live in most Middle East financial centres. Bad news; this doesn't mean more expat bankers are keen to move to the region.
Gone are the heady days of 2007, when spiralling property prices and escalating inflation meant that Dubai was in the top 30 of the world's most expensive cities.
According to the latest Mercer Cost of Living Survey - which looks at everything from the cost of milk to the price tag on luxury accommodation within major cities - Abu Dhabi is the Gulf's most expensive location, and this ranks 67th globally.
Dubai has slipped 26 places since last year, to 81st, while Riyadh (135), Manama (157), Kuwait City (159) and Doha (164) all fall into the bottom half.
Dubai, in particular, has seen a sharp reduction in property prices since 2009, as well as governmental initiatives to control inflation, which has affected its ranking, says Mercer.
Nathalie Constantin Métral, senior researcher at the firm, says: "The Dubai residential rental market is experiencing further rent decline. Weakening demand and huge supply are driving the market downturn. Many tenants have been moving from larger units to smaller ones, due to a reduction in household incomes and adoption of a more cautious approach towards household expenditure."
One of the biggest lures of Dubai to expat bankers has always been its tax free pay packets, particularly after income tax hikes in the UK last year, but the cost and relative scarcity of property has been something of a turn off.
With cost of living falling, and scores of houses now remaining empty, has this situation changed? Sadly not, says Peter Greaves, head of financial services at headhunters McArthur Murray.
"The cost of living in the Gulf has shrunk since 2007, but then so have the number of job opportunities," he says. "Most people moving to the region from the likes of London, New York or Asia are doing so because they're unable to find a position there, or because they've worked in the Middle East previously."
Luanda in Angola is the most expensive city in the world, according to Mercer's rankings, while Tokyo, Moscow, Geneva, Singapore and Hong Kong all feature in the top 10.
