Costs Rising: UAE Residents Brace for 2024 Challenges
Residents of the UAE are facing mounting concerns over the cost of living, with nearly half expressing that it is their primary source of stress, closely followed by personal and family financial worries. Unfortunately, the burden on residents' wallets is expected to intensify in 2024 as several key expenses are projected to rise.
One of the most significant contributors to increased expenditures for residents is the escalating cost of rents. Experts predict that rental prices in prime residential areas, such as Dubai Marina, Jumeirah Village Circle, and Business Bay, will surge by up to 20 percent. Factors driving this trend include heightened investor interest, a growing influx of professionals, a surge in population, and Dubai's increasing appeal as a destination for the affluent. Similarly, Abu Dhabi's real estate sector is anticipated to witness steady growth, with residential capital values expected to rise between 3 to 5 percent.
Additionally, residents sending money abroad will face higher remittance fees, with expatriates in the UAE expected to pay 15 percent more for these services. The UAE, being one of the world's largest remittance markets, sees significant flows of money to countries such as India, Egypt, Pakistan, and the Philippines.
Motorists will also feel the pinch as Salik tolls, the electronic toll collection system used in Dubai, are set to increase with the introduction of new toll gates. Commuters using key roads like Al Khail Road and Sheikh Zayed Road will be affected by this change, impacting both car owners and taxi users.
Another expense on the rise is paid parking, as even popular destinations like Dubai Mall are transitioning to a paid parking system. This shift means shoppers will soon have to pay for parking services, with fees deducted directly from their Salik user accounts.
Moreover, gold prices are expected to remain high or even increase further in 2024 due to factors such as decreasing interest rates, economic and geopolitical uncertainties, and central bank purchases. This could have implications for residents who invest in or purchase gold.
Finally, the overall standard of living is likely to become more costly as inflation in the UAE is projected to rise, albeit at a slower pace than the previous year. Factors contributing to this increase include global geopolitical issues, a growing population, and challenges in the supply chain.
In summary, residents of the UAE are facing a multitude of challenges when it comes to managing their finances in 2024. From soaring rents to higher remittance fees, increased tolls, and parking charges, as well as the rising cost of gold and overall inflation, it's clear that navigating the cost of living in the UAE will require careful budgeting and financial planning.
By: Sahiba Suri
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