Dubai’s real estate market is set to witness yet another shift as Damac Properties partner with Abu Dhabi Islamic Bank (ADIB) to launch home financing solution for off-plan properties. Usually, a property has to have an Oqood or a Title Deed and be ready / handed over in order to qualify for financing. This initiative, the first of its kind in Dubai, aims to make homeownership easier for people who have bought off plan and are struggling to pay their instalments.
What Is This New Financing Initiative?
For the first time, buyers can secure home financing for off-plan properties once construction reaches 35% completion. Traditionally, off-plan buyers in Dubai had to rely on self-financing or developer-backed payment plans until project completion. Damac’s collaboration with ADIB introduces a more structured and bank-supported mortgage option, aligning Dubai’s property market with global standards.
Which Projects Are Eligible?
Damac has an extensive portfolio of luxury developments across Dubai, including projects like Damac Lagoons, Aamac Hills, and Riverside in Dubai Investment Park. These projects are expected to be eligible under the new financing scheme, offering buyers access to premium real estate in prime locations.
How Does the Financing Work?
The program is live as of March 2025. Buyers interested in Damac’s off-plan properties can immediately explore this financing option through ADIB.
Here’s how the process unfolds:
- Eligibility: The financing becomes available once a project reaches 35% construction completion.
- Loan-to-Value (LTV) Ratio: Buyers can secure up to 50% of the property’s value as a mortgage. For example, if a property is priced at AED 1 million, buyers can receive AED 500,000 in financing.
- Sharia-Compliant Financing: ADIB ensures that all loans adhere to Islamic banking principles.
- Interest Rates: While specific rates have not been disclosed, ADIB is known for competitive and market-aligned rates tailored to customer needs.
This is in response to a lot of defaults that the city had witnessed over the past few years. Booking a property is simple with the initial down payment of 14-24%, but subsequent installments can strain finances, potentially leading to defaults, interest on outstanding installments and in worst case, unit cancellations. Bank financing eases this burden, enabling buyers to manage smaller EMIs instead of large lump sums every few months, offering increased flexibility and financial breathing room for both end users and investors.
How to Secure Off-Plan Financing
To apply for this financing option:
- Choose an Eligible Project: Select a Damac property nearing or exceeding 35% construction completion.
- Submit Required Documents: Provide proof of income / audited financials, employment history, and other financial details as per ADIB’s requirements.
- Approval Process: ADIB will assess eligibility based on criteria such as creditworthiness and compliance with Sharia principles.
- Finalize the Agreement: Once approved, buyers can proceed with signing the mortgage agreement and completing their purchase.
What Does This Mean for Buyers?
This initiative marks a significant milestone for Dubai’s real estate market. Here’s why:
- Increased Accessibility: By introducing bank-backed mortgages for off-plan properties, Damac and ADIB are lowering the barrier to entry for buyers who may not have had access to large upfront funds.
- Market Growth: The program is expected to boost demand for off-plan properties, particularly among first-time buyers and investors seeking property ownership in Dubai.
- Financial Flexibility: Buyers can now plan their finances more effectively without relying solely on developer payment plans.
Conclusion
DAMAC Properties’ partnership with ADIB is a game-changer for Dubai’s real estate sector. By offering home financing for off-plan properties at 35% construction completion, they are setting a new standard for flexibility and accessibility in property investment. This move not only empowers buyers but also strengthens Dubai’s position as a global leader in innovative real estate solutions.
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