Dubai: It’s no secret that life can be expensive. Every month, consumers must set aside money for food, transportation and rent. But just having a decent place to rest our heads at night can already eat away a huge chunk of the budget.
The latest data compiled by Euromonitor International showed that UAE consumers spent a staggering $75.8 billion (Dh278 billion) on housing in 2016. That’s roughly twice the project cost of Dubai’s Business Bay, a bustling district envisioned to have more than 200 towers.
The accommodation spend, which also covers housing maintenance, repair and utility costs, constitutes nearly half (41 per cent) of consumers’ total expenditures for the year, which reached $182.7 billion (Dh670 billion), up by 14.8 per cent from 2015.
With the UAE population estimated to be at 9.2 million in 2015, each person in the UAE spends a little over Dh30,000 a year on rent. By the end of 2017, the total figure is forecast to grow by an additional Dh8 billion..
The cost of renting apartments and villas in some parts of the UAE, particularly Dubai, has been on a decline as a result of dampened demand amid low oil prices. Owing to this trend, there is a belief that consumer expenditure on accommodation costs, as with other essentials, will stagnate this year.
According to Euromonitor estimates, while housing expenditures will continue to rise, this year's upward adjustment will average 2.9 per cent, compared to the 14.8 per cent jump in expenditures recorded between 2015 and 2016.
“Lower oil prices and real estate rentals and prices are likely to be key challenges impacting consumer expenditure [in 2017],” Rabia Yasmeen, an analyst at Euromonitor, told Gulf News.
Overall, residents in UAE spent a total of $182.7 billion (Dh671 billion) in 2016, up by 14.6 per cent from a year earlier.
Also a huge chunk of the figure went into food and beverages, estimated to have cost around $24.8 billion in 2016, an increase of 13.3 per cent from the previous year.
Driving, commuting to work and elsewhere in the country also continued to take a huge toll on people’s budgets, with transportation costs representing the third-biggest expense for millions of residents at $16 billion.
For those with children, education costs are a major outlay. Euromonitor’s data showed that consumers in the country spent $5 billion on school fees last year alone, up by 15.2 per cent from 2015.
Buying a new outfit may not be at the top of consumers’ priority list but it’s still costing consumers billions of dollars a year, with expenditure on clothing and footwear estimated to have reached $13.4 billion last year.