Dubai’s real estate market is currently undergoing a major transformation in its financing structure.
Several strategic agreements signed between leading Emirati banks and major developers have put an end to a rule that had seemed set in stone for the past twenty years: the impossibility of obtaining real estate financing before the delivery of an off-plan property.
From now on, as soon as a project reaches 35% to 40% construction progress, buyers can activate bank financing covering up to 50% of the property price.
This development is part of the Dubai 2040 Urban Master Plan and comes at a time when the market is booming: more than 270,000 transactions were recorded by the Dubai Land Department last year, representing a total volume of AED 917 billion, with over 70% concentrated in the off-plan segment.
Before
Until recently, bank financing for off-plan properties in Dubai was subject to heavy restrictions, making it a niche product:
- Banks required 50% to 60% construction completion — or even full delivery — before considering a financing application.
- Buyers had to bear the entire financial burden throughout the construction phase by following the developer’s construction-linked payment plan (typically 50/50, 60/40, or 70/30 spread over three to four years).
- Financing only came into play at handover, mainly to settle the remaining balance owed to the developer.
- For non-residents, the required upfront contribution could reach 60% to 100% of the property price from personal funds before even approaching a bank.
After: A Structured and Accessible System
The new framework is built around two parallel developments.
1. A General Framework Applicable to Most Tier-1 Developers
The project must reach 35% construction progress.
The buyer pays 50% of the property price using personal funds, while the bank finances the remaining 50% through successive installments paid directly to the developer, aligned with construction milestones.
The financing term can extend up to 25 years, and the pre-approval remains valid for 90 days.
2. Specific Partnerships Between Banks and Developers
Certain agreements signed directly between banks and developers go even further in terms of flexibility — particularly the Binghatti × ADIB partnership, which sets the eligibility threshold at 35% progress under a fully Sharia-compliant structure.
The Three Major Strategic Partnerships
Binghatti × Abu Dhabi Islamic Bank (ADIB)
The first agreement to lower the eligibility threshold to 35% construction progress, this partnership offers a fully Sharia-compliant product structured according to Islamic financing principles (Ijara and Murabaha).
Today, it is considered the first truly competitive financing solution for Muslim buyers in the off-plan segment.
The agreement covers Binghatti’s entire portfolio, representing more than 18,600 units under development across 23 projects located in:
- Downtown Dubai
- Business Bay
- Jumeirah Village Circle
- Al Jaddaf
- Dubai Science Park
- Dubai Production City
- Dubai Sports City
Sobha Realty × Emirates NBD
This partnership structures the integration of financing solutions directly into the purchasing journey for Sobha Realty off-plan properties, with financial assessment available from the early stages of project sales.
The agreement covers the developer’s entire residential portfolio, including the flagship community of Sobha Hartland and the island development project Sobha Siniya Island.
Dubai Holding Real Estate × Emirates NBD
One of the largest agreements in the market, this partnership simultaneously covers three leading brands:
- Meraas (Bluewaters, City Walk, La Mer)
- Nakheel (Palm Jebel Ali, Dubai Islands)
- Dubai Properties
The financing program is available to both residents and non-residents.
Banks and Developers Involved
| Bank | Type | Eligible Developers |
|---|---|---|
| Abu Dhabi Islamic Bank (ADIB) | Sharia-compliant | Binghatti (global agreement, from 35%), DAMAC, Dubai Properties |
| Dubai Islamic Bank (DIB) | Sharia-compliant | DAMAC, Dubai Properties, and other tier-1 developers |
| Emirates Islamic | Sharia-compliant | Selected tier-1 developers |
| Emirates NBD | Conventional | Sobha Realty (global agreement), Meraas, Nakheel, Dubai Properties, Emaar |
| Mashreq Bank | Conventional | Emaar, Meraas, Nakheel, and other tier-1 developers |
| Abu Dhabi Commercial Bank (ADCB) | Conventional | Aldar, Sobha Realty, and other tier-1 developers |
Case Study: Mercedes-Benz City by Binghatti (Sharia-Compliant Financing)
To illustrate the practical impact of the new framework, here is a simulation based on a 1-bedroom unit at Mercedes-Benz City by Binghatti, a flagship project resulting from the partnership between Binghatti and the German automotive brand Mercedes-Benz.
Base Data:
- Property price: AED 2,330,000
- 35% construction milestone: January 2027
- Financing: ADIB, 100% Sharia-compliant
Phase 1: Payments to Binghatti
- Initial down payment (20%): AED 466,000 + 4% DLD fees
- 8 installments of 3% (AED 69,900 each) until January 2027
Total paid from own funds: AED 1,095,100 (≈ 47% of the property price)
Phase 2: ADIB Financing Activation
- Financed capital (53%): AED 1,234,900
- Duration: 20 years
- Monthly installment (Sharia-compliant): AED 7,483
Market Comparison
For reference, the monthly rent for a comparable 1-bedroom unit in Business Bay on the secondary market ranges between AED 7,500 and AED 10,800.
In other words, the monthly financing payment is broadly equivalent to rent — but instead of paying for a temporary stay, the buyer is building long-term ownership and equity.
Before / After Comparison
| Element | Before | Now |
|---|---|---|
| Minimum construction progress required | 50% to 60%, often requiring waiting until delivery | 35% (Binghatti × ADIB) or 40% (general framework) |
| Equity contribution (own funds) | 60% to 100% of the price during construction phase | 47% to 50% before financing activation |
| Loan-to-Value (LTV) during construction | None | Up to 50% of the property price (80% for UAE nationals) |
| Disbursement method | Single payment at handover | Successive installments aligned with construction progress |
| Off-plan Sharia-compliant solutions | Almost non-existent | Available via ADIB (Binghatti) and DIB |
| Bank–developer framework agreements | None | Three major deals recently signed |
| Pre-approval relevance | Limited in off-plan context | Standardized, valid for 90 days |
| Preferred buyer profile | High-liquidity cash buyers | Salaried borrowers, first-time buyers, investors |
Conclusion
The shift from a marginal off-plan financing product to a structured and competitive offering marks a profound transformation of Dubai’s real estate market.
With three major framework agreements recently signed, an eligibility threshold lowered to as little as 35% construction progress, and the availability of Sharia-compliant financing through the Binghatti × ADIB partnership, Dubai is aligning itself with mature global real estate markets while simultaneously addressing long-standing demand from the Muslim investment segment.
