Abu Dhabi is the Middle East’s most expensive place to live in July 2012 overall. Abu Dhabi is followed by Doha and Dubai.

The most worlds most expensive place to live, based on the overall cost of living, encompassing all cost of living baskets is Hong Kong having overtaken Tokyo to top the latest international cost of living rankings.

Moscow is the worlds most expensive based on the cost of living excluding the housing, education, healthcare and transport baskets, while Manama is most expensive in the Middle East on this basis. Many companies cover these costs on behalf of the employee while on international assignments.

The rankings are based on data collected for 780 international locations, covering every country world-wide.

The cost of living (COL) data collected is representative of an expatriate lifestyle. The components of the COL data are local prices for fixed quantities of the same goods and services in each location, local inflation and exchange rates. Prices in each location are affected by availability (i.e. supply & demand) as well as local pricing regulations and taxes on goods and services (e.g.premiums on luxury brands). Local inflation is usually representative of local price increases which in turn impacts an expatriates purchasing power in the host country. The exchange rate impacts both the price of imports to the host country and the expatriate assignment salary calculation between the home and host country. The cost of living has a significant impact on the purchasing power of an expatriate’s salary package.

As the overall global most expensive place to live, Hong Kong has an overall cost of living index of 149.14, followed by Tokyo with 142.12, and Zurich with 137.12. By contrast Abu Dhabi, which is the 77th most expensive place in the world to live, has an overall cost of living index of 101.68. The overall index is comprised of 13 different basket groups. The assumption using the overall index is that everything is paid from the salary package. In addition, the cost of living calculations are weighted according to typical monthly international expatriate spending patterns. The Household Accommodation Basket for example, has a weighting of 30%, while the Groceries Basket has a weighting of 16.5%. That means that an international expatriate who, for example, earns 10,000 would typically spend 3,000 (30% of 10,000) on housing and 1,650 on groceries.

To provide an assignee, sent from a low cost of living country to a more expensive country, with a similar purchasing power to what they have in their home country, requires an adjustment to their assignment salary. The amount of adjustment depends on which country they come from. The larger the difference in cost of living, the larger the adjustment required to ensure a similar level of purchasing power in the host country.

Abu Dhabi is expensive compared to cities in the Middle East region. Abu Dhabi’s overall cost of living index of 101.68 is similar to cities such as Rome, San Francisco and Montreal. On the other hand London is 18% more expensive, New York 1.7% cheaper and Cape Town 11% cheaper than Abu Dhabi.

Abu Dhabi is particularly expensive for restaurants, meals out and hotels. For example a cappuccino costs around 18 AED / 4.90 USD in Abu Dhabi and around 1.30 EUR / 1.63 USD in Rome. Household accommodation is also expensive in Abu Dhabi. For example a 3 bedroom apartment in Abu Dhabi costs

around 14,000 AED / 3,800 USD rent per month compared to Rome at around 2,400 EUR / 3,000 USD per month. On the other hand a litre of milk which costs around 4.5 AED / 1.20 USD in Abu Dhabi costs around 1.5 EUR / 1.88 USD in Rome.

Cost of Living Rank – Middle East Locations – Overall Cost of Living & All Baskets (Highest to Lowest):

1. United Arab Emirates, Abu Dhabi
2. Qatar, Doha
3. United Arab Emirates, Dubai
4. Bahrain, Manama
5. Lebanon, Beirut
6. Israel, Jerusalem
7. Iran, Tehran
8. Kuwait, Kuwait City
9. Saudi Arabia, Riyadh
10. Palestinian Territories, West Bank

For full Middle East Cost of Living Rankings go here.

Cost of Living Rank – Middle East Locations – Excluding Housing, Education, Healthcare and Transport Baskets (Highest to Lowest):

1. Bahrain, Manama
2. United Arab Emirates, Abu Dhabi
3. United Arab Emirates, Dubai
4. Qatar, Doha
5. Lebanon, Beirut
6. Israel, Jerusalem
7. Kuwait, Kuwait City
8. Jordan, Amman
9. Iran, Tehran
10. Iraq, Baghdad

For full Middle East Cost of Living Rankings go here.

About Xpatulator.com’s Cost of Living Data

Xpatulator.com’s cost of living data is based on prices for the same quantity and quality of goods and services, representative of expatriate lifestyle, in each city. The data is collected and updated on a quarterly basis. The cost of living data is used by Xpatulator.com clients to calculate salary purchasing power parity, cost of living allowances, and customized (i.e. clients can select their own base city) cost of living indexes for

expatriate assignments online, using Xpatulator.com’s 3 premium content calculators.

The 13 basket groups do not count equally and are weighted according to expatriate expenditure norms as follows (weighting percentage is in brackets):

1. Alcohol & Tobacco (2%): Alcoholic beverages and tobacco products.

2. Clothing (2.5%): Clothing and footwear products.

3. Communication (2%): Telephone, Internet, Mobile Contract and Calls.

4. Education (5%): Pre-school / Nursery School Fees, School Fees, College Fees, and Tertiary Study Fees.

5. Furniture & Appliances (5%): Furniture, household equipment and appliances.

6. Groceries (16.5%): Food, non-alcoholic beverages and cleaning materials.

7. Healthcare (5%): Doctor Consultation rates, Private Ward Rate, Prescription Medicine, and Private Medical Insurance Contributions.

8. Household (30%): Housing rental, utilities, local rates and residential taxes.

9. Miscellaneous (3%): Stationary, Linen and general goods and services.

10. Personal Care (3%): Personal Care products and services.

11. Recreation & Culture (6%): Books, Camera Film, Cinema Ticket, DVD and CD’s, Sports goods, Theatre Tickets.

12. Restaurants Meals Out and Hotels (2%): Dinner at Restaurant (non fast food), Hotel Rates, Take Away, Drinks & Snacks (fast Food).

13. Transport (18%): Public Transport, Vehicle Costs, Vehicle Fuel, Vehicle Insurance and Vehicle Maintenance.

About Xpatulator.com

Xpatulator.com is the most comprehensive source of international cost of living information. We provide free international cost of living overviews and rank information covering 13 cost of living baskets and every country around the world as well as premium content calculators.

Founded in 2007, Xpatulator.com’s mission is to organize the world’s cost of living indices, exchange rates and relative hardship indices and make it accessible and useful to all.

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