Poor us: Dubai’s richest suffer 19% increase in cost of living

Creative Commons

A report this week found that the UAE is expected to gain an extra 4,000 millionaires this year, but another study reveals that the cost of living for Dubai’s wealthiest rose 19 percent in the past 12 months.

The Henley Global Citizens Report forecast that the UAE would see 4,000 high net worth individuals or HNWIs – those classed as having wealth of more than $1 million – moving to the emirate by the end of 2022.

• Saudi slips and UAE soars as millionaires seek new homes

However, the Global Wealth and Lifestyle Report by Swiss wealth management group Julius Baer found that those arriving in Dubai can expect to see a difference in the price of some of the finer things they are used to.

Properties and 5-star hotels squeeze wealthy wallets

The report found that for wealthy residents health insurance was 23 percent cheaper, dining in fancy restaurants was 38 percent easier on the wallet and buying a new set of wheels was 12 percent better.

But buying a new upscale place to live rose 44 percent, technology costs went up 41 percent, hiring a lawyer was 19 percent more and checking into a five-star luxury hotel was 195 percent tougher on the credit card.

“Dubai strikes me as being similar to Miami,” Mark Matthews, head of research Asia Pacific, Bank Julius Baer, told AGBI.

“Prior to the pandemic it was certainly a global financial centre, but now it’s more of a place where wealthy people would just like to live.”

Dubai luring a new class of millionaires

“Dubai is clean and safe,” Matthews said. “It seems to me something has changed, and a different kind of person is coming here now: entrepreneurs, innovators and investors.

“That has very positive implications for the emirate’s economy.”

While Dubai was ranked 14^th overall, the top five most expensive cities for wealthy residents are Shanghai at number one, followed by London, Taipei, Hong Kong and Singapore.

Looking at the global rankings, Dubai ranked most highly for “completing an MBA” and “buying a watch”.

However, for wealthy women buying handbags, shoes or jewellery the city was on a par with global counterparts.

Future-focused investors

With the UAE taking over the US and UK as the destination for millionaires this year, Julius Baer said the emirate’s wealthy community was now more future-focused, particularly regarding what happens to their wealth after they are gone.

Omar Barghout, head of investment advisory, Julius Baer Middle East, said: “One of the biggest trends we are seeing with regards to investors in the UAE is an increased spotlight on succession planning.

“This has been exacerbated not only by the pandemic but also of clients being more conscious of the impending wealth transfer process. 

“We also see the rise of a more conscious investor with the next generation of clients focusing more on understanding what they have in their portfolio or what they invest in.”

This emphasis on the future is likely to have led to the report also finding that 57 percent of HNWIs in the Middle East said they plan to spend more on health insurance, while 58 percent also said they want to spend more eating out in fancy restaurants.