Most Expensive Cities In MENA

Beirut beats Abu Dhabi to reach the regional top spot on Mercer’s global cost of living study.

Reduced cost of living in the Middle East, mainly driven by falling rents, has helped the region rank lower on Mercer’s 2012 Worldwide Cost of Living Survey.

The survey, which calculated the cost of living for expatriates in 214 cities around the world, found that the top ten most expensive cities globally were those located in Europe and Asia.

While Tokyo ranked first on the list, Pakistan’s Karachi was named the cheapest city in the world for expatriates.

In the Middle East, Beirut replaced Abu Dhabi as the most expensive city, mainly because of lower accommodation costs in the UAE capital.

The drop in rankings of UAE cities, Dubai and Abu Dhabi, had made them less expensive as compared to higher ranked cities, thus increasing their attractiveness to companies, said Tom O’Byrne, principal at Mercer Consulting Middle East.

“But this is a relative ranking, so changes in other cities affect the overall position of every city,” added Zaid Kamhawi, the IPS Middle East leader at Mercer, a global human resources consultancy.

Hence, every change is relative to the cost of living in New York, the benchmark city, or the US dollar, which is used as the base currency for the survey.

Mercer calculated the cost of living based on several factors including rent, food, entertainment and transportation during the period of February-March 2012.

Here’s a list of the most expensive cities in the Middle East and North Africa (MENA) region according to the survey.

1. Beirut

Ranked 67 globally, the Lebanese capital beat the UAE capital, Abu Dhabi, to hold the spot of being the most expensive city in MENA. Cost of living has increased in the city, pushing it up eight positions from last year.

2. Abu Dhabi

Abu Dhabi has held the top spot on this list for two consecutive years – 2010 and 2011- before losing out to Beirut this year. The UAE city fell nine places to rank 76 globally.

3. Dubai

Dubai dropped 13 positions on the list to rank as the third most expensive city in the MENA region and 94 in the world.

4. Amman

The Jordanian capital didn’t see a drastic change in its ranking from 2011, falling just two spots globally from 103 to 105 this year.

5. Riyadh
Increasing rents and an overall higher cost of living has pushed up the Saudi Arabian capital 12 spots on the global list, from 135 in 2011 to 123 this year.

6. Cairo

Despite the political and social unrest in the Egyptian capital, prices have not changed much in the last one year, and Cairo has fallen by only one place, from 128 in 2011 to 129 this year.

7. Kuwait City

Kuwait City has seen the largest upward movement since last year, with steeper rents pushing it up 25 spots. Globally, its ranking has gone from 159 in 2011 to 134 in 2012.

8. Manama

Despite social unrest, the ranking of the Bahraini capital – similar to Cairo – has not changed much from last year, going from 157 to 156 on the global list.

9. Damascus

The Syrian city has witnessed the biggest drop among the regional rankings, falling 43 positions from 123 in 2011 to 166 this year. The change is mainly because of the depreciation of the Syrian pound compared to the US dollar, said Mercer.

10. Doha

The Qatari capital has maintained its position on the MENA list from 2011, with reduced cost of living causing a drop in global ranking from 164 to 169.

11. Muscat

The Omani capital has seen a slight rise in the cost of living, pushing it up five spots from last year’s ranking to reach 179 globally.

12. Jeddah

The Saudi Arabian city ranks lowest in the MENA region for the second year in a row, and has reduced its spot marginally to 186 in 2012 as compared to 185 last year.