Buying an off-plan property in Abu Dhabi could now come with more flexibility when it comes to financing.
Aldar has completed Abu Dhabi’s first off-plan mortgage registration under a new framework introduced by the Abu Dhabi Real Estate Centre (ADREC), with Abu Dhabi Commercial Bank (ADCB) supporting the initial transactions.
The new framework allows eligible buyers who have paid 50% of their property's purchase price to arrange mortgage financing while the property is still under construction.
For buyers, the main change is timing. Instead of waiting until completion to arrange financing, eligible buyers can arrange financing before handover, subject to the bank's approval and applicable requirements.
How the New Abu Dhabi Off-Plan Mortgage Framework Works
The framework provides a defined route for eligible buyers to arrange financing before handover.
Once an eligible buyer has paid 50% of the purchase price, they can arrange mortgage financing against the off-plan property, subject to the bank's lending criteria and applicable requirements.
Under the framework, the bank can finance:
- Remaining instalments during construction
- The final payment due at handover
- Other amounts approved under the applicable mortgage terms
The exact amount, interest or profit rate, repayment period, and financing structure depend on the buyer's eligibility, the property, and the participating bank.
The mortgage interest of the financing bank can also be formally recorded before handover.
The 50% payment requirement follows the UAE Central Bank regulation referenced by the transaction, which requires customers to have paid 50% of the property price to be eligible for off-plan mortgage financing.
A Simple Example
For example, if an eligible off-plan property costs AED 2 million, the buyer would need to have paid AED 1 million before arranging financing under this framework.
The remaining amount could potentially be financed through an approved mortgage, depending on the buyer's eligibility, the property, and the bank's lending terms.
This is only an example. Paying 50% does not automatically mean that a buyer will receive financing for the remaining 50%.
Why the New Abu Dhabi Off-Plan Mortgage Framework Matters
For many off-plan buyers, the final stages of a payment plan can involve a significant amount of money.
The new framework gives eligible buyers another option for managing those payments before handover.
It can provide:
More Clarity Around Financing
Buyers can explore their financing arrangements before handover, giving them greater visibility over how the remaining payments may be funded.
More Flexibility During Construction
Eligible buyers can arrange financing for remaining instalments and the final handover payment without having to wait until the property is completed.
Better Cash Flow Planning
Financing part of the remaining purchase price may allow eligible buyers to manage their available cash during the construction period.
ADREC also said the framework allows mortgage interests in eligible off-plan units to be recorded in the Initial Real Estate Register, providing greater clarity and protection for buyers, developers and financial institutions.
Aldar and ADCB Complete the First Registration
Aldar has become the first developer in Abu Dhabi to complete a mortgage registration under the new framework, with ADCB supporting the initial transactions as the mortgage bank.
The milestone is significant because it demonstrates the new ADREC off-plan mortgage registration service in live market use.
Importantly, the framework is not limited to Aldar properties. ADREC says the service is available on a market-wide basis to participating institutions that meet the relevant requirements.
This means the framework could become relevant to eligible off-plan transactions beyond the first Aldar and ADCB registrations.
