Beirut tops 2021 list of most expensive cities for expats in Mena

Decline in real estate prices and economic diversification drive down cost of living in Dubai and Abu Dhabi, according to new survey

Beirut ranked as the most expensive city for expatriates in the Middle East and North Africa, according to the annual Cost of Living survey by global consultancy Mercer.

The Lebanese capital jumped 42 places in global rankings to also become the world’s third-most expensive city, due to “its currency collapsing after political and financial crises, Covid-19 and the Port of Beirut explosion in 2020”, Mercer said on Tuesday.

The cost of living in the UAE, meanwhile, has continued to fall as the diversification of the UAE’s economy meant lower oil prices had a less severe impact on gross domestic product. Lower oil prices and falling rents also helped to reduce overheads, the consultancy added.

Ashgabat, the capital of Turkmenistan in Central Asia, is the most expensive city to live in this year, according to Mercer's Cost of Living Survey. Photo: Alamy

Hong Kong, ranked second this year, slipped from the top position last year in Mercer's cost of living index. Photo: AFP

Beirut rose to rank the third most expensive city globally as a result of a severe economic depression, Covid-19 and the Port of Beirut explosion in 2020. Photo: EPA

Tokyo dropped one spot from third position in 2020 to fourth rank this year in Mercer's Cost of Living survey. Photo: AFP

Zurich dropped one spot from fourth position in 2020 to fifth position this year in Mercer's Cost of Living Index. Photo: Reuters

Shanghai ranked sixth in the Mercer cost of living index in 2021, up one place from last year. Photo: Getty Images

Singapore moved from fifth place to seventh, according to the Mercer index. Photo: AFP

The Swiss city of Geneva ranks eighth in the Mercer Cost of Living Rankings in 2021. Photo: AFP

Beijing ranks ninth in the Mercer Cost of Living Rankings in 2021. Photo: Getty Images

The Swiss city of Bern rounds out the top 10 most expensive cities for expatriates to live in globally this year, according to Mercer. Photo: Reuters

Dubai dropped to 42nd in the global rankings, down from 23rd last year, and Abu Dhabi fell to 56th from 39th in 2019, increasing the attractiveness and affordability of the UAE for global talent.

“For over two years, we have been witnessing deflation across Dubai and Abu Dhabi. This can be attributed to a range of factors, including a decline in the real estate sector, which has made expatriate accommodation cheaper,” Vladimir Vrzhovski, Mercer's mobility practice lead for the Middle East and Africa, said.

“Moreover, a drive to enable remote and flexible working is driving mobility and cementing the UAE’s reputation as a destination of choice for expatriate workers.”

For over two years, we have been witnessing deflation across Dubai and Abu Dhabi

The UAE government approved a self-sponsored, one-year residence permit for remote workers in March this year that will allow employees from all over the world to live and work remotely from the Emirates, even if their companies are based in another country.

The UAE economy also continues to recover from the pandemic-driven slowdown, aided by Dh388 billion of economic support measures. Government initiatives, including visas for expatriate retirees and the expansion of the 10-year golden visa scheme to encourage foreign professionals to settle in the country, have also helped to improve investment sentiment.

The ranking of 209 cities, which helps to determine the cost of expatriate packages for employees on international assignments, measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods and entertainment. New York City is used as the base city for all comparisons and currency movements are measured against the US dollar.

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Ashgabat in Turkmenistan, Hong Kong and Beirut are the three most expensive cities in the world for expatriates to live and work in 2021.

More than half of the top 10 most expensive cities in 2021 are located in Asia. Tokyo and Zurich each dropped one spot to fourth and fifth positions, respectively, while Shanghai ranked sixth, up one place from last year. Singapore moved from fifth place to seventh, according to Mercer. Rounding out the top 10 of Mercer’s most costly cities for international employees are Geneva in eighth position, followed by Beijing and Bern.

Riyadh in Saudi Arabia ranked as the most expensive city in the GCC, moving up two spots on its 2020 ranking to 29th globally, primarily due to the implementation of 15 per cent VAT in July 2020, Mercer said. Jeddah also rose to 94th from 104th.

Most other Gulf cities also became more affordable last year. Manama, Bahrain, slipped to 71st from 52nd; Muscat, Oman, dropped to 108th place from 96th; Kuwait City fell to 115th from 113th; and Doha, Qatar, fell 21 places to 130th, the survey found.

The world’s cheapest city is Bishkek, the capital of Kyrgyzstan, followed by Lusaka in Zambia and Tbilisi, Georgia, according to Mercer’s survey.

Top 10 most expensive cities in 2021

1. Ashgabat
2. Hong Kong
3. Beirut
4. Tokyo
5. Zurich
6. Shanghai
7. Singapore
8. Geneva
9. Beijing
10. Bern