Dubai's active real estate market has always attracted those with a taste for the high life. With some of the world's most contemporary architectural designs, luxurious lifestyle offerings, and financing options, it is no surprise that investors and buyers flock to it from all over the world. The off-plan property sector remains a highly coveted area in this market. In 2024, this sector accounted for 60% of all property sales in Dubai.
With luxury developments sold off-plan, this sector extends enticing prospects for high returns on investment. Early investors can secure prime units at lower prices compared to ready properties. Attractive payment plans are another added advantage. Binghatti stands at the forefront of off-plan real estate development in Dubai by building spaces that transcend the ordinary and evolve into works of art, maximising returns.
Knowing how to finance an off-plan property purchase in Dubai can help investors make informed decisions and achieve investment goals.
In real estate, an off-plan property is one whose construction is yet to be completed. An investor buys such a property relying on the designs and plans provided by the developer.
Investing in an off-plan property is possible at various development stages, sometimes even before construction starts.
The booming construction market in Dubai offers fascinating choices in off-plan properties. Investors prefer getting into such projects early. This can mean lower initial rates and higher returns. Additionally, investors can sell such properties before completion. Since property values may increase during construction, they can meet investment goals, making them a popular choice among investors.
Developers usually offer payment flexibility for off-plan properties. This enables investors to pay in instalments as construction progresses. When financing an off-plan property through a loan, an investor has to pay interest on the disbursed amount. Compared to this, investors have to make lump sum payments when purchasing ready properties. So, financing a ready property through a loan means facing the upfront financial burden of interest and principal.
The presence of multiple financing options boosts off-plan property purchases in Dubai. The combination of luxurious properties, including those developed by Binghatti, and easy cash flow is a lucrative option for investors.
Developers often offer flexible payment plans linked to construction milestones. These plans follow specific payment structures. For example:
20/80 – 20% of the property value is to be paid as an initial down payment and 80% during construction
50/50 – 50% of the value during construction and 50% at handover
60/40 – 60% of the value during construction and 40% at handover
Many developers in Dubai provide in-house financing options. With streamlined processes, minimum documentation, and the potential for lower interest rates, they offer easier access to financing.
For providing off-plan property mortgages, most banks require the construction to be at least 50% complete. The purchaser is required to qualify on the basis of credit score, income, and residency with the bank.
UAE nationals are expected to pay a minimum down payment of 20% for properties valued below AED 5 million. For expatriates, the majority of banks expect a minimum 25% down payment. This is subject to the bank offerings and eligibility requirements.
Some of the banks in Dubai grant mortgages on off-plan projects undertaken by world-class developers like Binghatti. Some of these banks include Emirates NBD, Dubai Islamic Bank (DIB), Mashreq, and ADCB.
In Dubai, buyers can seek Islamic financing to fund off-plan property purchases. While conventional bank loans require buyers to pay interest, Islamic financing is interest-free. Islamic financing methods follow Shariah-compliant principles. Murabaha (cost-plus financing) and Ijara (lease-to-own) are two financing methods that follow these principles.
Conventional bank loans offer the advantages of quick loan disbursal and fixed repayment schedules. However, loan repayment with interest may increase the financial burden of the buyer. The biggest advantage of Islamic financing is that it is interest-free. However, Islamic financing methods may have high transaction and issue costs.
Investors can seek private and alternate financing options. These include crowdfunding, private lenders, and joint ventures.
Alternate financing solutions often have flexible terms, less paperwork, and faster approval processes. However, they may charge higher interest rates and have shorter repayment terms.
The ROI potential of investing in an off-plan property in Dubai can’t be denied. However, investors need to consider certain factors before financing such a property.
An affordability assessment is necessary for investors to manage the financial obligations of the investment. Investors must evaluate income and expenses to understand their investment capacity. They must consider future payment commitments to minimise potential financial strain.
The property market trends of Dubai differ according to demand and supply, the economy, and government regulations. Knowing the cycles of Dubai real estate and probable ROI will guide investors on the right time for investment.
Investing in an off-plan property is as good as investing in the future. It is necessary to research the developer's background to provide assurance against delays and other problems. One should confirm RERA approvals and check project timelines to prevent future complications.
Understanding the legal aspects and regulations for financing off-plan properties in Dubai is necessary for investors to ensure a seamless buying experience.
Investors must ensure the off-plan project is registered with the Dubai Land Department (DLD) to protect ownership rights.
All payments must be deposited into the Escrow Accounts of developers to reduce the risk of funds misuse.
Many developers impose restrictions on reselling off-plan properties. Understanding developer policies and transfer fees can help investors to reduce the risk of non-compliance.
Financing an off-plan property in Dubai isn’t a challenge. Investors can succeed by adopting a proactive stance and following a few tips.
Investors must conduct research and choose a property that aligns with their needs and preferences, along with the right developer.
Dubai’s off-plan property sector offers multiple financing options. Comparing them will help investors to select the best plan.
Getting pre-approval for an off-plan mortgage, if applicable, is a good idea. Investors can know the mortgage amount and set their budget.
Investors must sign the Sales & Purchase Agreement (SPA) and pay the initial deposit. These help in getting mortgage approval from banks in Dubai.
Following the payment schedule until project completion is vital for investors to avoid legal hassles.
Binghatti's state-of-the-art projects place it in a league of its own. With an unwavering commitment to innovation, quality, and luxury, the brand sets the bar higher for real estate development. Step into Binghatti's universe to learn more about off-plan properties and financing options. For inquiries and guidance, contact Binghatti today.
Financing an off-plan property purchase in Dubai can open up the opportunity for elevated living, surrounded by great amenities and convenience. With multiple financing options, such as bank loans, Islamic financing, and alternate financing solutions, Dubai offers everyone the chance to claim their part of the city’s skyline.
Binghatti's new releases in off-plan projects offer some of the finest spaces for redefined living in the most sought-after Dubai neighbourhoods, making them excellent investment options.
Explore Binghatti’s latest launches and financing plans.
