Dubai offers a different experience than many destinations that tourists and ex-pats may choose to visit.
From the late 1700s until the 1930s, those living along the sandy shoreline where skyscrapers now soar above the Dubai landscape today made most of their income from harvesting pearls from the sea.
The pearl divers who once thrived on the bounty of the Persian Gulf have given way to a pearl of a city in the United Arab Emirates (UAE), the third-richest country in the world after Luxembourg and Qatar.
As this city continues to grow on sand dredged from the gulf and imported from elsewhere, the cost of visiting or living in Dubai has escalated.
Here are 10 reasons Dubai is so expensive.
Why Is Dubai So Expensive? (Top 10 Reasons)
1. Real Estate
People pay high prices to have a snazzy address.
The cost of purchasing a world-class view offered from one of the tall towers recently built in Dubai comes at a steep price.
Many units and equally swanky villas sit empty, even if a slight price reduction would encourage someone to occupy them in a heartbeat.
Owners and developers refuse to lower their prices, choosing to keep these residences vacant until they command the “right” price rather than selling them right away.
What is true with purchases is equally true with rentals.
Renting in some of the hottest ex-pat neighborhoods will burn a hole in one’s wallet.
Complicating this situation even more is that some landlords expect their tenants to hand over an entire year’s rent upfront.
Imagine paying rent for the next year before getting the keys to your kingdom.
Anyone getting a job offer requiring relocation to Dubai has some serious negotiating to do.
While living as an ex-pat in such a dynamic place has many benefits, negotiating a housing allowance that offers flexibility should become a higher priority than scheduling a high-priced shopping trip in the city’s mega-malls.
2. Most Things Are Imported from Elsewhere
Dubai lacks substantial agricultural enterprises, manufacturing plants, or natural resources that would allow it to become self-sufficient.
Nearly everything used or consumed in Dubai comes from somewhere else.
There are no amber waves of grain or fertile farmlands to feed the metropolis.
There is plenty of sand, but even this abundance must be supplemented.
A. Sand
Dubai imports tons of sand from places like Australia.
Yes, a city built on desert sand brings in even more sand for sleek skyscrapers to sit upon.
Not to be granular, but the reason involves the difference between desert sand that can blow in the wind and grains of river sand more appropriate for the building foundations upon the fancy floating islands.
All of these imports flow into a city that has become an exotic metropolitan area that needs more than sand to grow and thrive.
B. Retail Products
With very limited competition and an overwhelming reliance on imports, those who shop at The Dubai Mall and similar shopping destinations will find few bargains.
Most of the prices for similar items are similar to each other.
No deep discount bargain basements are found in this desert.
Like the tourists who travel to this city in the United Arab Emirates, almost everything found in Dubai comes from somewhere else.
This includes a vibrant workforce.
C. Labor
Part of the high cost of creating such an expensive city involves the cost of the ex-pats who make up the majority of the workforce.
Some are high-end ex-pat employees who have to pay the costs of visas, living expenses, school fees and tuition for their children, and domestic workers to keep the swanky accommodations clean.
Others pay an even higher price, one that has a high human cost to save on their living and labor costs.
A disproportionate number of South Asian workers have migrated to Dubai.
When they arrive, they often find their passports confiscated.
These immigrants from India, along with others from Southeast Asia, make up a substantial part of the workforce.
They build tall towers.
They work in all sectors of the service industry.
Many live in squalor, out of view of those they serve.
While such situations allow for lower labor costs in an expensive city, they do carry a high human price.
Anyone who hires live-in help to have such a worker stay with them can expect to bear responsibility for their worker’s residency permit and premiums for healthcare, on top of their salary.
3. Those Living There Traveling Elsewhere
Few budget travel options exist for those planning to visit Dubai.
People who live in this expensive locale have a different dilemma.
In addition to the cost they pay to live in Dubai, they must shell out a lot of clams to leave their desert paradise.
Sure, they can travel to other places in the United Arab Emirates or nearby nations like Oman, Qatar, and Saudi Arabia.
To get to other glitzy destinations, they need to get on an airplane or expect a very long trip in their luxury yachts.
If they choose to escape Dubai during the always-hot summer months, they may find limited seats available for flights to other destinations.
This is due to supply and demand since many of those seats were already purchased by people making their roundtrip travels to visit Dubai.
4. Legal Issues When Running Afoul Of Local Customs
Visitors and ex-pats who spend time in Dubai must understand local laws and customs.
While this is true anytime a person travels, if someone commits what may seem to be a minor infraction or just being themselves in a public space in Dubai, it may result in deportation.
Their actions may also land them in jail and being forced to spend a lot of money on lawyers.
Generally speaking, constitutional rights and protections are more difficult to ensure once a person leaves their country.
Here are a few costly mistakes a person may make.
Remember that ignorance of the law in Dubai is no excuse.
Dubai law has a zero-tolerance policy regarding the possession of drugs.
This does not just include the narcotics and intoxicants that will get a person in trouble in the United States.
Possessing some over-the-counter medication, such as certain painkillers commonly used in other countries for decades, may lead to your arrest and a visit to Dubai’s jail.
Drug trafficking sentences are eligible for the death penalty.
Even relatively minor possession charges that can be assessed for residual amounts of forbidden substances—even within your bloodstream and not your luggage—may result in prison terms.
Keep your CBD oil, some skincare products, and medical marijuana back home.
Bringing them along might complicate your life in an expensive way.
They say love is like a drug: addicting, enjoyable, and highly desired.
While that may be true, refrain from overt public displays of affection in Dubai.
Even a soft kiss on the lips with your spouse of many years in public may lead to an arrest.
If honesty is the best policy, one should honestly think of modesty when visiting Dubai.
Women should expect to cover their legs, shoulders, and tops of their arms while in public.
Swimwear is permitted on the beach, but not in other areas where it might be considered public nudity.
Become familiar with restricted materials and prohibited activities before traveling to Dubai.
5. Fees, Utilities, And Health Costs
Living tax-free attracts many ex-pats to Dubai.
Along with the Bahamas, Bermuda, and Monaco, the United Arab Emirates is a country that has no national income taxes.
Of course, American ex-pats looking for a quick departure to a tax haven in the desert should understand that the long arm of the Internal Revenue Service still reaches them.
Life is not entirely tax-free, however.
Some of the main roads in Dubai have tolls.
While that may seem like pocket change, one does incur other costs while living in a place that does not levy national income taxes.
Expect high power bills to keep the air conditioner working during those summer months with the voltage provided by the Dubai Electricity and Water Authority.
Connection charges for starting the services are not cheap.
Expect to pay about 1,000 AED (Emirati Dirhams), or over $270 in US currency, to get these utility services.
Electric and utility bills often surpass 1,000 AED each month (more than $270), especially during the hot summers.
Taxes on the internet and other municipal services will take some money out of the wallet, because living on a land surrounded by silicon becomes quite difficult if the chips in a person’s computer do not have electricity and wireless access to the web.
Aside from that, healthcare costs are an important factor in determining how expensive Dubai is for ex-pats who live there.
The emirate offers free and low-cost health insurance coverage to UAE nationals.
Ex-pats must pay for these services and must contact the Ministry of Health to obtain a health card.
While employers are required to provide basic coverage to ex-pats employed by them, ex-pats who bring spouses and children have responsibility for assuming the costs of covering their loved ones.
6. Schooling for Kids And College Kids
Citizens of the United Arab Emirates may send their children to public schools without paying any tuition.
All children from the age of 5 to 15 must attend school, whether they are nationals or ex-pats.
Before 2015, ex-pat children could not attend public schools.
This resulted in the establishment of many privately-operated international schools in the country.
Even though ex-pat children can presently attend public schools in Dubai, their attendance comes at a steep cost.
Public schools are not a bargain for ex-pats, and homeschooling options may be limited.
Some private schools have very high tuition costs, even exceeding $25,000 a year for elementary grades.
If an ex-pat wants to move to Dubai and bring along family members, they should understand the huge expense they will have to pay to have their kids sit in a classroom a few miles away from some of the tallest skyscrapers in the world.
An employer may cover some or all of the costs for one or two children, but if an ex-pat wants to bring a large family to Dubai, they should expect to see large deductions from their paycheck to pay for tuition.
Dubai may remain affordable for a single ex-pat, but the costs of insurance and schooling for other family members will cause sticker shock for many.
College tuition poses a similar dilemma.
International students who choose to live and study in Dubai should pack plenty of ramen noodles.
According to one study, the UAE is the fourth most expensive country for ex-pats who want to study and live in a foreign country.
7. Extravagance Comes At A Price
People patronizing a high-end restaurant for lobster and prime rib do not expect to pay bottom-of-the-barrel prices.
They open their wallets and dig deep within to pay for the privilege of the experience.
This same desire for extravagance defines Dubai.
Glitzy skyscrapers, exciting shopping destinations, endless sunshine, and tax-free living come at a price.
This wealth is not because of the oil economy often associated with the Middle East.
Yes, Dubai does have oil reserves.
However, oil greases only a small part of the economy, representing less than 2% of the gross domestic product.
What keeps the gears lubricated in Dubai is unhindered capitalism with a healthy dose of bling added to the mix.
Tourists with high credit limits do not fly to Dubai to watch oil get extracted from under the sand.
They arrive to shop in some of the world’s fanciest malls and eat at five-star restaurants before retiring for the evening at a five-star hotel.
As previously noted, the expensive culture found in Dubai comes with multiple types of costs.
One cost is the glitz and glamor an extravagant place elegantly exudes.
The other cost is the human toll on the workers who have created this fabulous experience, working hard in the heat during the day before retiring to their less-than-one-star accommodations.
8. Far-From-Cheap Service Calls
Living in luxury comes at a high cost for those who call Dubai home.
Having a housekeeper or nanny—often an ex-pat from India or Southeast Asia and never a native UAE citizen—costs at least $1,000 each month.
This does not include their visa fees, possible health insurance, food, and other essentials necessary for this helper to survive in Dubai.
A city built with luxury in mind offers a variety of services, all available for a price.
Think about Las Vegas, with its similar sandy and desert environment.
Dubai is surrounded by water, though, and far away from other destinations, without some of the same tax complications, but with many other complicating factors.
The ever-present costs associated with service calls will not dissuade most citizens of the United Arab Emirates from taking advantage of them.
The same can be said regarding the majority of ex-pats with high-paying jobs who live in villas or skyscrapers throughout the city.
They see the glitz around them and expect to enjoy the creature comforts that this city will offer them.
Whether or not they decide to tip generously is another question, one that is a personal choice.
9. Water To Drink
The waterfront accommodations of Dubai offer world-class views.
One can see an endless horizon of water, none of it ready to drink.
The emirate has no streams or rivers to bring it water and no nearby ice-capped mountains.
The city’s sunny disposition seldom experiences rainfall.
For a city to thrive in a desert, technology must provide a way to produce potable water.
Desalination plants and water purification systems transform the saline water of the Persian Gulf into a life force that sustains the population.
Seawater provides 99% of Dubai’s drinkable water.
In addition to the piped water, many residents and ex-pats also purchase purified and mineral water for their cooking and drinking needs.
Dubai spent billions of dollars to create state-of-the-art desalination plants.
While water costs are relatively low for life in a desert paradise, this occurs because the government has subsidized the creation of these plants.
The expense of removing salt from the sea will continue in Dubai indefinitely.
This is the “cost of living” in the truest sense of that phrase.
10. Getting A Drink That Is Not Water
Similar to many areas within the Middle East, alcohol is a commodity that one does not frequently see in public places.
At one point, alcohol consumption in Dubai was a criminal act.
Although no longer illegal, the consumption of alcohol is carefully regulated within Dubai.
If one thinks they will drink a few and strut down the street as if they were on the Vegas Strip or enjoying Mardi Gras in New Orleans, they should think again.
Think about the jail bunk they will sit upon as they wait for a high-priced lawyer to fight for their bail.
To enjoy a little beer, wine, or booze, expect to pay handsomely and consume your drink quietly.
Open containers may lead a judge in Dubai to close the book on your individual liberties.
There is no desert drunk tank with short-term, sobering stays.
Just a cell and the associated court costs possibly make that drink the most costly purchase a person has ever made.
Having a cool one in the summer heat of Dubai requires caution.
UAE residents and ex-pats may presently consume alcohol in the privacy of their homes or at licensed venues.
To enjoy the right to purchase and consume alcohol at their homes, residents and ex-pats in many parts of the UAE have had to secure a liquor license.
Similar to a marijuana card required in some American jurisdictions, this license permits an individual to possess and consume alcohol.
Since late 2020, the UAE has overhauled some of its laws regarding liquor licenses and other matters.
These progressive reforms were approved to increase the number of visitors and foreign investors to places such as Dubai.
As a result, it is now a little easier to get an alcoholic drink in this cosmopolitan city.
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