New Mortgage Option Boosts Off-Plan Property Buying in Abu Dhabi
Gulf News
Abu Dhabi introduces a mortgage framework allowing off-plan buyers to finance the remaining 50% before handover, enhancing market transparency and financing flexibility.
Abu Dhabi Launches Innovative Mortgage Framework for Off-Plan Buyers
Abu Dhabi has marked a significant milestone by completing its first registered mortgage on an off-plan property. This new financing option, a collaboration between Aldar Properties and Abu Dhabi Commercial Bank (ADCB), is facilitated under a framework introduced by the Abu Dhabi Real Estate Centre (ADREC). It aims to streamline how buyers finance off-plan homes and provides greater security for all stakeholders involved.
How the New Mortgage Framework Works
The framework permits buyers who have already paid at least 50% of the value of an eligible off-plan unit to mortgage the remaining amount before the construction is completed. This means banks can now finance the outstanding installments during the development phase, as well as the final payment at the time of handover.
This structure offers several benefits: buyers gain earlier certainty regarding borrowing costs and reduce the financial burden of tying up cash while their property is under construction. For lenders, the ability to register their interest formally in the property prior to completion adds an extra layer of legal protection in case of disputes.
Under the scheme, the financing bank is recorded on the mortgage registration certificate before the handover occurs. ADREC has clarified that these mortgage interests are included in the Initial Real Estate Register, which creates a formal and transparent record accessible to buyers, developers, and financial institutions alike.
Official Insights and Market Impact
Ghazi Saeed Alateibi, Executive Director of the Real Estate Transaction Sector at ADREC, emphasized the framework's role in enhancing market transparency and protecting the interests of all parties involved: “By enabling mortgage interests in eligible off-plan real estate units to be recorded in the Initial Real Estate Register, the service strengthens transparency and provides greater clarity and protection for buyers, developers and financial institutions.”
Aldar Properties, a key developer in Abu Dhabi, confirmed the framework aligns with UAE Central Bank regulations, specifically regarding the 50% payment threshold before applying for mortgage financing.
Faisal Falaknaz, Aldar's Chief Financial and Sustainability Officer, highlighted the positive impact: “The new off-plan mortgage framework introduced by ADREC marks an important step in further enhancing the transparency and accessibility of the market. We are proud to have worked with ADREC and ADCB to complete the first transaction, translating the framework into greater financing flexibility for homebuyers.”
Accessing the Mortgage Framework
Aldar facilitates this financing route through its in-house service, Home Finance by Aldar. This free advisory service connects customers to mortgage products from over six conventional and Islamic banks, including ADCB, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD, Emirates Islamic, and First Abu Dhabi Bank.
Clients can utilize the Live Aldar app to request consultations from the Home Finance by Aldar team, making the mortgage process more accessible and buyer-friendly.
Implications for Real Estate Agents
This new mortgage framework could reshape Abu Dhabi’s off-plan property market by enabling buyers to secure financing earlier and with greater confidence. Real estate agents should familiarize themselves with the eligibility criteria and participating financial institutions to better guide clients. The enhanced transparency and formal mortgage registration give agents a clearer legal framework to assist buyers and developers, potentially increasing transaction volumes and client satisfaction in the thriving Abu Dhabi property market.
Based on reporting from Gulf News. Summary and analysis by Propilot AI.
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