Dubai's Damac makes it easier for offplan buyers with ADIB deal

Dubai: The Dubai master-developer Damac will be offering a major advantage to offplan property buys in its projects – access to mortgage financing from ADIB once the project has crossed the 35% completion mark.

The prevailing cut-off line to tap home financing for offplan purchases in the UAE is at 50%. But leading developers could soon tie up with their banking partners to bring the threshold lower, which is what Damac has done.

“This applies to all Damac projects that have crossed 35% mark,” said Amira Sajwani, Managing Director of Sales & Development at Damac Properties. “All that the offplan buyer needs to do is make the 50% (or over) down payment to us and be eligible for the mortgage from ADIB.”

The projects that would be immediate beneficiaries from the new alliance are the Cavalli Tower (in Al Sufouh 2), the Damac Lagoons (within Dubailand), the Damac Hills 2 and others.

Mortgage rates in the UAE have seen a softening after the US Federal Reserve cut interest rates by a combined 1% late last year. This year, any rate cuts will take a more gradual approach, based on what Fed officials have been saying. (Changes to the UAE base rates – and by extension, its home financing offers – are tied directly to what the Fed does, given the dollar-dirham peg.)

This is where the Damac-ADIB alliance would come in handy. Offplan investors in Damac projects can tap bank lending at a much earlier project cycle, which means they can use less of their own funds during the build phase of the project.

It remains to be seen whether some of the other major developers will line up their comparable offplan financing programs with their banks. “Chances are high that developers would work on offplan linked incentives with lenders,” said an estate agent. “This would be a major draw and integral to keep the Dubai offplan sales momentum going.”