Under-Contsruction

The Appeal of Off-Plan Properties

One of the most promising opportunities in the UAE real estate market is off-plan properties, i.e. those that are sold prior to their completion. Customers have the advantage of buying a property at the current price and enjoying the possibility of growth by the time the construction is completed. This is particularly appealing to first-time buyers and experienced investors to off-plan investments. Banks within the UAE have gone even further to provide special under-construction or off-plan mortgages to make the process even more accessible, which follows the milestones of the project.

For UAE Residents

Approved off-plan projects offer residents a variety of mortgage scheme. Contrary to the completed property mortgage, the funds to finance the off-plan units are made in phases and are directly proportional to the progress of the construction of the development. The systematic methodology allows payments to keep in line with the real developments made, and it minimizes the risks of the buyers and lenders.

The average resident Loan-to-Value (LTV) ratios are 50-75 consistent with the project, the credibility of the developer and the financial profile of a buyer. This enables residents to pay less money at the establishment phase but distribute the expenditure to the construction duration and eventually afford property ownership easily. Banks also closely cooperate with the major developers, and only approved and stable projects are funded, guaranteeing the buyers more security and peace of mind.

For Non-Residents

In the case of non-residents, there is a much restricted availability of off-plan mortgages. There are just very limited banks that provide financing facilities to under-construction properties to the foreign buyers and then too, the eligibility condition is highly rigid. The LTV is usually limited to approximately 50 percent of the property value, and purchasers are required to have excellent financial stability, submit comprehensive income records and, in most cases, raise the amount of down payment.

The extra barriers notwithstanding, qualified non-resident investors are granted entry to one of the quickest expanding sectors of the UAE. Off plan properties are usually characterized by high returns in capital appreciation and entry of the market at competitive launch prices. To international investors who need to have a presence in Dubai in the prime developments of Abu Dhabi, this financing alternative can be a window into a prosperous future.