- A new survey suggests that Dubai’s population growth has a negative impact on expatriate wages.
- While more and more expatriates are in competition for jobs, wages should remain flat in 2025, Cooper Fitch noted.
- But the recruitment agency said the housing costs were increasing, which could reduce the available income from expatriates.
While expatriates continue to move to Dubai, the cost of living is increasing, but wages should stagnate, according to a new survey by the recruitment agency based in Dubai, Cooper Fitch.
Cooper Fitch plans that wages through the United Arab Emirates will be flat in 2025, with an average increase of 0%, despite the expected growth of GDP.
Its 2025 water salary guide, based on a survey of business leaders of more than 1,000 organizations, also notes that some market analysts warn that the country’s expatriate population could possibly reduce average wages.
Dubai is an expatriate hot spot
Foreigners have long been attracted to Dubai by freely income, a luxury lifestyle and a warm climate.
The population of Dubai increased to around 3.85 million, expatriates representing approximately 87%, according to government data.
This marks an increase in the population of around 475,000 people from March 2020.
Positive economic indicators, including direct foreign investment inputs and increased GDP, can encourage even more people to move to Dubai in the years to come.
However, Cooper Fitch said that as regards the increase in salary, significant population growth “balances economic gains”.
Fiona Robson, The chief of the Edinburgh Business School of Heriot-Watt Dubai University, told Bi that the tributary of expatriates widens the talent basin for vacant posts.
As such, she said that stagnation of salary “could be due to less need to offer superior wages when there is already a good set of candidates.”
Flatline wages, while the costs of life soar
Dubai remains a magnet for high income employees, said Washika Haak-Saheem, the dean of the Dubai Business School of the University of Dubai, in an email in Bi.
However, those who are less affluent can feel the pinch more and more.
Haak-Saheem said that for intermediate income professionals “who are important for Dubai’s dynamic economic growth, guaranteeing sustained growth in wages remains an area of interest”.
Dubai is now the most expensive city in the Middle East for expatriates, and 15th in the world, according to the cost of living ranking 2024.
Housing is a major factor.
During the 12 months preceding December 2024, rents increased on average by 16%, said CBre Mena Research Chief Matthew Green, in a BI email.
“It was motivated by an increased population quickly, the new offer that has not followed the rate of demand,” he said. And rents should increase even more in the coming quarters, added Green.
“The disparity between the climbing of lifestyles and stagnant wages poses financial challenges for many expatriates,” a world management professor at the Rochester Institute of Technology Dubai told Bi Rizwan.
The cost of a growing population
Flat wages and the increase in rents can be the price of the expanding expatriates community of Dubai. Despite this, the city plans to continue to grow.
According to its roadmap for urban development, Dubai aims to increase its population by an additional 5.8 million by 2040.
In the future, wages and available rents could lead to a reduction in disposable income for some, but Trefor Murphy, CEO of Cooper Fitch, said that the context is essential with regard to water wages.
“They are already at this very high level and it is free of tax,” he said, adding: “People are very well paid.”
Do you have a story to share on life as an expatriate to water? Contact this journalist at jziter@businessinsider.com.
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