Although the latest Consumer Confidence Survey conducted by the Department of Economic Development (DED) shows general positive consumer sentiment, it also indicates that most of Dubai’s residents are worried about the rising cost of living. The increasing rents are becoming a main reason for residents’ concerns, despite the overall stable consumer confidence.
The survey included 2,000 Dubai residents, male and female both nationals and expatriates, aged from 20 to 59 years old who answered different questions during the first quarter of this year. According to the data presented by DED, 54 percent of the residents express concerns about the cost of living in the city – property rents, telephone bills, utility charges, outdoor expenses, home refurbishments and technology upgrades (computers, phones) and more. Despite that, the Consumer Confidence Index remains around 135, or the same as in the previous quarter. The index is calculated by answering three questions related to local job prospects, personal and family finances and whether there the person could afford buying all they want and need over a period of one year.
According to economists, rising rents have a great impact on the total cost of living. According to Dr. Nasser Saidi, former Lebanese economic minister and former chief economist at the Dubai International Financial Center, around 30% of the household budget in a regular Dubai-based family goes for rent.
Only in Q1 of 2013, Dubai rents jumped by 10 percent according to Jones Lang LaSalle. The real estate analyst explained that the fact that rents rose only in popular areas while remained the same in the other locations shows that Dubai’s property market is beginning to recover.
Other highlights from the survey:
- 95% of the participants are anticipating a strong economic performance in 2013, compared to only 89% in Q4 of 2012
- Positive consumer sentiment for the economy has grown by 16 percent
- Those who are concerned about the current state of the economy are now only 13%, compared to 27 % in Q4 of 2012