ABU DHABI // Half of employed expatriates would consider leaving because of the high cost of living.
“The majority of expatriates consider money and saving for the future as an important factor in moving to UAE,” said Alaeddine Ghazouani, research manager at YouGov.
“But the rising costs of living are increasingly holding them back from safeguarding the financial security they have been looking for, which makes moving out of the UAE a serious alternative.”
The National’s survey, carried out by YouGov, found that cost of living (22 per cent), rising rents (19 per cent) and inability to save (15 per cent) are residents’ top three main financial concerns.
The survey polled 1,104 expatriates and Emiratis across the UAE on attitudes towards money, spending, saving and job security.
When asked if they would consider moving away from the UAE because of the cost of living, 17 per cent said definitely yes while a further 33 per cent said probably yes.
Only 21 per cent said no, while the rest were unsure.
Many blamed the increased cost of living on their inability to put away a little money every month.
Indika H G, 38, a Sri Lankan, has been living in Abu Dhabi for nine-and-a-half years.
The sales and marketing executive for a property company said he was finding it harder to cope financially because his salary had stagnated as rents and cost of living had soared. “I don’t save for now,” he said. “The cost of living is very high. Rent is very high. Schooling fees are high.”
The emirate is a very different place from what it was in 2006-2007, he said. “Wages are staying the same while everything else goes up,” he said.
Of those questioned, 67 per cent of westerners are considering moving because of the cost of living. Emiratis and Asian expatriates said it was their biggest financial worry while for westerners and Arab expatriates it was their second biggest fear after rising rents.
More than half (56 per cent) said they faced difficulties in coping with the cost of living.
After rent, the worry of education costs, medical expenses, food expenses and household items were next on the list.
The cost of living was not an exclusive worry of expatriates.
Mai Al Hameli, 26, an Emirati who works as a brand coordinator in Abu Dhabi, said her biggest financial worry was school fees. “Every year the fees are increasing,” she said.
E M, 23, an Emirati student and housewife in Dubai, criticised the cost of rent in the Emirates.
“I got married and moved to Ajman,” she said. “Now I am looking for a house in Dubai and everywhere is expensive.
“I even cross-referenced prices in Dubai and in Barcelona, Spain. The rental prices in Barcelona in comparison to Dubai are about 30 per cent less.”
E M said she worried about money and was considering moving abroad to study. “To be able to pay for a house or rent a house in Dubai or Abu Dhabi – where my preferred university will be – in the long run it will cost too much.
“It will be cheaper for us to study abroad and move abroad.
“The only way for us to afford to study and live in Dubai is to take a loan. Or ask for financial help from family, which we do not want to do.”
jbell@thenational.ae
*with additional reporting by Maryam Al Shamsi
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About this series:
A study into the saving habits of Emiratis and expatriates found a quarter of all employed residents do not save any of their monthly wage. And 69 per cent have not started planning for retirement. The survey found that only 6 per cent of respondents do not have any financial worries. The majority of people’s wages are spent on rent, followed by groceries and household items leaving some residents dependent on multiple credit cards and longing for financial security. Financial experts advise residents to resist overspending to avoid a struggle when faced with unexpected expenses.
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In this series:
■ Majority of expats in UAE sending money abroad, survey finds
■ UAE Minister of Economy backs The National's survey findings
Coverage from March 8th:
■ Survey finds 94% of UAE residents have financial worries
■ Rent is UAE residents' biggest expense, survey finds
■ Survey finds many UAE residents failing to save for retirement
Click on the image below to bring up a graphic on the survey’s findings
Tom Fletcher on 'soft power'
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The specs
Engine: 2.3-litre, turbo four-cylinder
Transmission: 10-speed auto
Power: 300hp
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Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
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Price: Exact regional pricing TBA
Company%20profile
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
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Transmission: 10-speed automatic
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Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
A State of Passion
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Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
The specs
Engine: 3.8-litre V6
Power: 295hp at 6,000rpm
Torque: 355Nm at 5,200rpm
Transmission: 8-speed auto
Fuel consumption: 10.7L/100km
Price: Dh179,999-plus
On sale: now
