There is no doubt that the Dubai off plan property market has been running hot over the last 2 years. In fact, in the year 2017, the number of off-plan transactions both cash and mortgage was higher than the that of the secondary or ‘ready market’ as its often referred to. The major developers are offering terms and payment plans never seen before and the buyers are more than willing to take advantage.
As most buyers are well aware the maximum loan to value ratio or as it often referred to “LVR” for a ready property is 75%. This basically means that if the property being purchased is say, 1,000,000 the maximum amount the bank will lend against that property is 750,000 or 75%.
In the case of an off-plan purchase, the maximum LTV ratio is 50% and it’s a percentage that applies to both UAE nationals as well as expats. So as in the previous example, if the property being purchased is say 1,000,000 the maximum amount the bank will lend against that property is 500,000 or 50%. It is also important to note that the 50% finance can only be done so once the buyer has paid 50% or more of the property and not before. This means any potential buyer must have enough cash funds to cover at least 50% of the property being purchased.