Abu Dhabi Registers First Mortgage on an Off-Plan Property

Abu Dhabi has registered the first mortgage on a property under the new system launched by the Abu Dhabi Real Estate Centre (ADREC). The transaction was completed by Aldar Properties in cooperation with Abu Dhabi Commercial Bank (ADCB).

The main change is that buyers no longer necessarily have to wait until construction is completed to arrange a mortgage for the remaining value of the property. Under the new rules, if a buyer has already paid 50% of the price of an eligible off-plan property, they can obtain a mortgage for the remaining amount before construction is completed. The bank can then finance:

1. the remaining scheduled payments during construction;
2. the final payment when the property is handed over to the buyer.

For buyers, this means being able to lock in financing terms in advance and reduce the need to keep a large amount of cash available until construction is completed.

How the new mortgage system works

One of the key innovations is the ability to register the bank’s interest in the property before it is handed over to the buyer. If the relevant requirements are met, the bank can be named in the mortgage registration certificate before the property is officially transferred to the owner.

ADREC also stated that a mortgage encumbrance on an eligible property can be recorded in the Initial Real Estate Register. This creates an official legal record that takes into account the interests of the buyer, developer and financial institution. According to Ghazi Saeed Al Ateibi, Executive Director of the Real Estate Transactions Sector at ADREC, the new system increases market transparency and provides greater certainty and protection for all parties to the transaction.

The mechanism is not limited to individual developers. ADREC said the service can be used by participating financial institutions that meet the established requirements. According to Aldar, the 50% threshold is in line with the requirements of the Central Bank of the UAE.

Aldar already offers mortgage support to buyers

Aldar offers the new financing option through its own Home Finance by Aldar service. This is a free mortgage advisory service for clients that provides access to offers from more than 6 conventional and Islamic banks. Aldar lists the following partner banks:

1. Abu Dhabi Commercial Bank (ADCB);
2. Abu Dhabi Islamic Bank;
3. Dubai Islamic Bank;
4. Emirates NBD;
5. Emirates Islamic;
6. First Abu Dhabi Bank.

Clients can access the service through the Live Aldar app and request a callback from Home Finance by Aldar specialists. Aldar’s Chief Financial and Sustainability Officer, Faisal Falaknaz, described the launch of the new system as an important step towards improving transparency and accessibility in Abu Dhabi’s property market.

According to him, the first transaction completed together with ADREC and ADCB demonstrates how the new rules can give buyers greater flexibility when financing property purchases.

What will change for the Abu Dhabi property market

The new system is being introduced at a time of strong growth in Abu Dhabi’s off-plan property segment. Sales of properties under construction are playing an increasingly important role in financing new developments, as developers receive funds from buyers before construction is completed. Eligible buyers will now be able to access bank financing earlier than under the traditional model.

For the market, this could result in several important changes:

1. Buyers gain more time to plan their budgets and can spread the financial burden over the construction period.
2. Banks receive an officially registered interest in the property before handover, creating a clearer legal position.
3. Developers gain an additional tool for working with buyers of off-plan properties.

The new system does not mean that every buyer will automatically qualify for a mortgage. Financing depends on whether the property meets the relevant criteria, the bank’s requirements and the client’s financial position.