In 2025, the United Arab Emirates (UAE) has been identified as the most expensive country in the Gulf Cooperation Council (GCC) region, while Oman stands out as the most affordable, according to the latest Cost of Living Index. The rankings highlight significant differences in living expenses across the Gulf, affecting residents, expatriates, and businesses operating in the region.
Gulf Countries’ Cost of Living Rankings
The Cost of Living Index evaluates countries based on various factors, including housing, transportation, food, entertainment, and healthcare expenses. These costs play a crucial role in determining the affordability and attractiveness of each country for workers, investors, and expatriates.
In the 2025 rankings, the UAE secured the 30th position globally with an average score of 54.1 points, making it the most expensive among Gulf and Arab nations. This reflects the high cost of housing, services, and consumer goods, particularly in major cities such as Dubai and Abu Dhabi. The UAE’s economy, which thrives on tourism, real estate, and a strong financial sector, contributes to its elevated living costs.
Bahrain followed as the second most expensive country in the Gulf, ranking 38th globally with a score of 48.3 points. Despite being a smaller economy compared to Saudi Arabia and the UAE, Bahrain has seen a steady rise in living costs due to increasing demand for housing and services.
Qatar was close behind, placing 40th globally at 47.5 points. The country has experienced economic growth driven by its energy sector and preparations for hosting major international events, leading to higher prices for goods and services.
Saudi Arabia, the largest economy in the region, ranked 56th globally with a score of 41.9 points. Although some cities like Riyadh and Jeddah have seen rising rental and utility costs, Saudi Arabia remains relatively affordable compared to the UAE and Qatar.
Kuwait, another oil-rich Gulf country, ranked 60th globally with a score of 40.4 points. While its tax-free system and government subsidies help control costs, increasing demand for services and imported goods has led to gradual price hikes.
Oman, identified as the most affordable Gulf country, ranked 62nd globally with a score of 39.8 points. The country continues to maintain a lower cost of living compared to its neighbors, offering more budget-friendly housing, transportation, and essential services.
Comparative Analysis: UAE vs. Oman
A direct comparison between the UAE and Oman reveals significant differences in living costs. Data indicates that the overall cost of living, including rent, in Oman is approximately 43% lower than in the UAE. Specifically, rent prices in Oman are about 71% less than in the UAE.
For instance, to maintain a similar standard of living, an individual would need around 18,500 AED in Dubai, compared to just 1,950 OMR in Muscat. These figures demonstrate the stark contrast in expenses between the two countries, particularly in terms of accommodation and lifestyle costs.
Factors Influencing Cost Disparities
Several key factors contribute to the cost of living variations between the UAE and Oman. These include housing costs, transportation expenses, food pricing, and economic policies.
Housing Costs
One of the most significant factors influencing the cost of living is housing. The UAE’s rapid urban development, especially in cities like Dubai and Abu Dhabi, has led to higher property values and rental rates. The country’s booming real estate market attracts investors from around the world, driving up demand and pushing prices higher. Luxury apartments, high-end villas, and exclusive gated communities contribute to the elevated housing costs.
In contrast, Oman’s real estate market remains more affordable, with a wider range of budget-friendly options. The government has also implemented policies to ensure housing remains accessible to its residents, keeping rental and property prices relatively stable.
Transportation Expenses
While both countries have invested heavily in infrastructure, transportation costs differ significantly. The UAE has developed an extensive public transport system, including metro networks, trams, and modern bus services. However, the cost of fuel, car ownership, and tolls contribute to higher transportation expenses. Additionally, parking fees in major UAE cities can be quite expensive, further adding to the financial burden.
Oman, on the other hand, benefits from lower fuel prices and less congested roads. The country’s reliance on private cars rather than extensive public transport systems means fewer expenses related to metro and tram networks. Additionally, parking is generally free or significantly cheaper than in the UAE.
Food and Dining
The cost of food and dining is another area where notable differences exist. The UAE’s diverse culinary scene, influenced by its expatriate population, offers a wide range of dining experiences, from luxury restaurants to fast food chains. While groceries remain moderately priced, dining out frequently can be costly, particularly in cities like Dubai, where high-end restaurants dominate the market.
In Oman, food prices are generally lower, and dining options are more affordable. Traditional Omani cuisine and local markets provide budget-friendly alternatives, making it easier for residents to manage food expenses without compromising on quality.
Healthcare and Education
Healthcare costs in the UAE are among the highest in the region. While the country boasts world-class medical facilities and cutting-edge healthcare services, the cost of medical insurance and treatments can be substantial. Expatriates are often required to have private health insurance, which adds to their living expenses.
Oman provides more affordable healthcare options, with government-funded medical services available to residents at lower costs. Private healthcare is also relatively cheaper compared to the UAE, making medical expenses more manageable for expatriates and locals alike.
Education expenses in the UAE can also be a financial challenge, especially for expatriate families. International schools and private institutions charge high tuition fees, which can place a significant burden on families with children. Oman offers a range of more affordable schooling options, including government-run institutions that provide quality education at lower costs.
Implications for Residents and Expats
The cost of living is a crucial factor for both locals and expatriates when choosing a place to reside. The UAE, with its higher living costs, offers a bustling economy, advanced infrastructure, and a plethora of opportunities, which can justify the expenses for many. The country attracts skilled professionals, entrepreneurs, and investors seeking business growth and career advancement.
Oman, on the other hand, provides a more relaxed lifestyle with a lower cost of living, appealing to those seeking affordability without compromising on quality of life. The country’s slower pace, scenic landscapes, and lower expenses make it an attractive destination for retirees, remote workers, and expatriates looking for a balance between modern amenities and affordability.
Conclusion
The 2025 Cost of Living Index highlights the economic diversity within the Gulf region. While the UAE stands as the most expensive GCC country, reflecting its rapid growth and urbanization, Oman offers a more affordable alternative, balancing modern amenities with cost-effective living.
Individuals and families considering relocation within the Gulf should weigh these factors against their personal and professional priorities to make informed decisions. Whether prioritizing financial savings, career opportunities, or lifestyle preferences, understanding the cost of living in each country can help individuals choose the best fit for their needs.
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