Home Financing Research Articles

Comparative analysis of murabahah and musyarakah mutanaqisah contract in Islamic home financing ownership at Islamic bank

This research aims to determine the implementation of the murabahah contract and musyarakah mutanaqisah on ownership financing houses in Islamic Banks, as well as the use of musyarakah mutanaqisah contracts as financing product innovations house ownership with a qualitative method. The data in this study were obtained by interview,observation, and documentation. The data sources used are primary data and data secondary. Results from study proofs that the use of musyarakah mutanaqisah contract on home financing ownership in Islamic banks can be product innovation because its use is more flexible and can be used for various product financing. Whereas part big product home financing ownership in Islamic banks still uses a murabahah contract because of a fix installment. Otherwise, musyarakah mutanaqisah contract is an that should not be missed, although not familiar, this contract provides more benefits for the bank and convenience for the customer.

Who is vulnerable to energy poverty in the Global North, and what is their experience?

AbstractEnergy poverty is a fast rising government agenda in the Global North, and is subject to a substantial academic literature. Energy poverty is experienced when people do not have adequate access to energy services (light, heat, warmth, and cooling) to live a decent life. Plans to transition to a low‐carbon economy in the Global North have raised concerns about the impacts of environmental policy on more vulnerable citizens. A just transition is highly risky for energy poor households, who enter into the transition at a disadvantage. Understanding this starting point is critical in ensuring the energy poor are able to participate in a just transition, and are not subject to further disadvantage. Here, using a realist evaluation approach, I summarize the empirical literature on the experience of energy poverty in the Global North, in doing so characterizing who tends to be vulnerable to this problem, and painting a picture of their life experience. I show how energy poverty links to poverty, and how people from commonly disadvantaged social categories (disabled people, single parents, and people from ethnic minorities) are more likely to experience energy poverty. I describe the homes of people experiencing energy poverty, and their coping practices, as well as outlining the effects of energy poverty on health, social life, and home finances. In conclusion, I point to the weaknesses and gaps in the current literature, and suggest some important avenues of research for the future. This includes bringing energy poverty evidence into more extensive conversation with a just transitions agenda.This article is categorized under: Human and Social Dimensions > Energy and Climate Justice Human and Social Dimensions > Energy Poverty Human and Social Dimensions > Gender Equity

Laying the Foundation of the Interest-Free Building System as an Alternative Model to Housing Finance Systems

Bilinen temel gerçeklerden biridir ki hammaddenin ana kaynağı yeryüzü, onun yegane sahibi ise Allah Teâlâ’dır. Ancak zamanla Allah Teâlâ’nın bahşettiği taş, toprak ve demirden oluşan yapılar Allah’ın yasakladığı yöntemlerle üretilip bunlara O’nun yasakladığı yöntemlerle sahip olunmaya başlanmıştır. Allah Teâlâ alışverişi helal faizi haram kılmıştır. Faiz her yönüyle insanlığa zararı olan bir müessesedir. Naslar tarafından kat’i olarak haram olduğu ortada olan faiz, değişen dünya düzeni ile iktisadi bir ürün olarak ön plana çıkmış, bankalar aracılığıyla kurumsallaşarak hayatın her alanına girmiştir. Katılımcı gözlemciliğimiz sonucunda günümüzde faizin beslendiği en belirgin kanallardan birisinin, insanların bir an önce sahip olmak istedikleri mallara karşılık, olmayan bedellerini veresiye yolla temin ederken düştükleri ikilem olduğu kanısına varılmıştır. Kanaatimizce gelişen dünyada insanlara “ev sahibi olmayın!” demek mümkün değil ise bunun çözümü faize, faizin nemalandığı finans merkezli alternatifler yerine yapı merkezli alternatifler üretilmesidir. Bu sayede insanların caiz olmayan ile alternatif olan arasındaki kafa karışıklığını doğrudan bilindik ve helal olanla gidermekte mümkün olacaktır. Buna karşılık İslâm’ın ilk dönemlerinden günümüze doğru İslâm iktisadında ortaya konulan ev finansmanı sistemleri için ön görülen çözümlerin asıllardan çok fer’i yöntemlerle üretilen çözümler olduğunu söylemek mümkündür. Zira faiz, akitte ileri sürülen fasit ve haram şarttır. İslâm iktisadında en belirgin yasakların başında faiz gelmekle birlikte İslâm iktisadı sadece faiz haramından ibaret olmayıp akde sürülecek pek çok fasit ve batıl şart akdi kerihlik ile iptal arasında bir yere konumlandırabilir. Öyleyse bir akitte faizi bertaraf etmek için İslâm iktisadının pek çok esasını çiğneyip dolaylı yollarla muğlak kabuller gören unsurlarla hareket etmenin o akdi faizsiz kılmakla birlikte kâmil anlamda meşru hale getirdiği söylenemez. Günümüzde pek çok faizsiz finans sistemi kendisinde faizin cereyan etmediği ancak diğer fasit şartlardan müteşekkil sistemlerden oluşmaktadır. Faizsiz ev sisteminin çözümünün aslında faizsiz yapı sistemine dayandığını bunun ise murâbaha değil mudârebe temelli, murâbaha destekli, modern ticaret ve yapı sistemlerini dikkate alan bir mekanizma ile mümkün olabileceği düşünülmektedir. Ev finansmanı sistemlerine alternatif olarak kurgulanan faizsiz yapı sistemi basitçe ifade etmek gerekirse konut, işyeri vb. yapıların oluşum ve edinimlerini her aşamasında faizli kredilerden uzak bir şekilde ve gerekli hukuki, teknik ve iktisadi şartnamelere dayalı olarak alma ve satmayı sağlayan kompleks bir modeldir. Diğer bir tabirle müteahhitlik sözleşmesi ile oluşan yap-sat modelinin modernize edilmiş şeklidir. Bir nevi kooperatifçiliğin çağa ayak uydurur şekilde yeniden teşekkül etmiş halidir. Faizsiz yapı sisteminin, faizsiz finansman sağlayan günümüz yöntemlerinin İslâm hukukunun asli ilkelerinden uzak ve dolambaçlı yolları yerine, asıllarla hareket eden, insanların aklına ve vicdanına sığan ve emek-sermaye dengesine dayalı bir çalışma prensibiyle hareket etmesi hedeflenmektedir. Alternatif finans kanallarının tamamı faizsiz ve helal yapıyı mudârebe yoluyla kullanmaya hem müsait ve hem de bu sistemin oturabilmesi için alt yapısı teşekkül etmiş bir güçtür. Bu sistem üretim esnasında alıcının ya da yatırımcının doğrudan işin içinde olduğu, aracı kurumların paranın işletilmesinden çok işletmenin yürütülmesinden, takibinden, emek ve üretimden kâr elde ettiği bir sistemdir. Faizsiz yapı temelleri helal yapıya dayanması kaçınılmaz olan ve bu sayede üretimin daha başlangıç aşamasında faize sebebiyet verecek şartları bertaraf eden bir sistemdir. Faizsiz yapı sistemi, yapıyı inşa edenin veya satıcının akdin bir tarafını alıcının ise diğer tarafını oluşturmalarına binaen akitlerin bağlayıcılığını zedeleyen sorunlara neden olmayacaktır. Bu sistem diğer bazı ev finansmanı sistemlerinden farklı olarak İslâm iktisadının temel meselelerinden, zahiren de bâtınen de akdi ifsat edecek niteliğe sahip olan sorunları ortadan kaldıracaktır. Diğer taraftan aktif mudârebe ile hareket eden faizsiz yapı sistemi saha tecrübesi ile fakihe doğru ictihadın oluşumunda katkıda bulunacak ve toplumda İslâm iktisadının temel esaslarına uyma bilinci oluşturacaktır.

Applicability of Maqasid Al-Shariah Towards Home Financing by Islamic Banks among University Staff in Malaysia

Despite their significant growth, Islamic banks only consider about avoiding riba, gharar, and maysir at the expense of maqasid al-Shariah. The banks are somewhat converged with their conventional peers. Consumers believed that the banks imitate their peers pertinent to the pricing calculations and product lines. Without effective measure, consumers may discern Islamic banks undermine their maqasid objective and continued critics of mimicking their peers are prolonged. Against this backdrop, this study examines consumer preference using a proposed index known as the Maqasid Consumer Preference Index (MCPi). Drawing upon the MCPi, the present study examines consumer preference for six Islamic banks operated in Malaysia to which Islamic home financing products are presently made available. Our data were drawn from valid 450 usable questionnaires. The results obtained report that six Islamic banks relatively have a moderate index. Of these, Bank Islam Malaysia Berhad (BIMB) is ranked first, followed by Maybank Islamic, CIMB Islamic whilst Kuwait Finance House is ranked last. This work examines a new approach to measure consumer preference using the MCPi. Our contributions are confined to these particular factors – educating customer, establishing justice, and promoting welfare in the context of Islamic home financing in Malaysia. Future works may provide a different perspective on these interrogations by considering new dimensions to extend the findings. Despite this concern, the results obtained offer improved insights for bank managers to manage Islamic home financing products effectively.

Islamic banks credit risk performance for home financing: Before and during Covid-19 pandemic

Purpose ― This study aims to assess the home financing credit risk performed by Islamic banks in Indonesia. Methods ― A panel dynamic analysis is adopted to measure the bad loan performance before and during the Covid-19 pandemic. The observation period started from January 2016 to September 2020 with 1,881 observation periods of monthly panel data from the province level. Findings ― The study finds a difference in bad loan performance before and during the Covid-19 pandemic. Before this pandemic, inflation has a positive and significant influence on non-performing financing in real estate, rental business, and company service. However, during the Covid-19 pandemic, a substantial and positive effect of inflation is found on the bad loan for personal flat and apartment ownership. On the other hand, a significant and negative impact of inflation is found on the bad home loan for personal business shop ownership. Implication ― This analysis could trigger the government to provide financial assistance for those affected by the Covid-19 crisis. In addition to that, an Islamic bank is also expected to give financing allowances for them by providing an option of debt restructuration and rescheduling. Originality ― This paper analyses the Islamic bank’s credit risk performance for home financing before and during the Covid-19 pandemic. This issue has not been presented in the literature to the best of our knowledge.

An alternative interest-free home financing model

PurposeThis study aims to determine the relationship between the banking industry and home financing by conducting a regression analysis between the mortgage loan interest rates and the number of housing sales, and based on the results of the analysis, this paper proposes a new and alternative interest-free home financing model by directing the savings of the people in pension funds into real estate investment funds (housing fund), specifically established to provide a bank loan-free home financing solution. Diminishing Musharakah (partnership) is also integrated into the model from an interest-free and saving economy perspective. The model developed also provides opportunities to increase the size of the real estate investment funds and provide alternative investment tools to pension funds.Design/methodology/approachWhile the global financial crisis resulted from the mortgage crisis in the USA in very recent history, the world has been experiencing the evolution of a new health crisis, COVID-19, a pandemic that has been heavily affecting the global economy in the past two years. The housing sector is among one of the major industries that may be affected by this new global crisis because of the high dependency of the current home financing models on the banking industry, which is carrying the burden of the pandemic. The rapid increase in global debt volume, housing prices, inflation and interest rates are observed as bad signs that may increase the risks of the housing industry. A potential decrease in purchasing power because of high inflation rates may decrease the welfare of people and reduce the income level. While the total debt keeps increasing worldwide, and central banks are considering increasing the interest rates, any potential default in the repayment of the mortgage loans may trigger a new mortgage crisis as the bank loan-dependent financing system of the housing industry lacks alternatives. Thus, a relationship analysis between the banking and housing sectors is required to figure out the dependency of home financing on the banking industry, and a new sustainable home financing model is needed to protect the housing industry and the homebuyers from a negative effect of a new possible financial crisis.FindingsThe results of the analysis exhibit that there is a strong negative relationship between the mortgage loan interest rates and the total home sales. As a result, the new model is suggested and this new model is tested in an emerging country, Turkey, with the real housing sector and economic data where the interest rates are high and the home prices are booming. The results exhibit that the new interest-free home financing model provides a more economic financing solution compared with the high financing costs of bank loans.Research limitations/implicationsThe model proposed in this study is unique, and there is no such system that has integrated the pension funds, the real estate investment funds and diminishing partnership in one ecosystem. It is expected that the model may decrease the dependency of home financing on the banking industry and decrease the risks of the housing sector in the case a new financial crisis occurs.Social implicationsWhile providing a sustainable and alternative interest-free home financing tool, the model also provides individuals who do not prefer to use any bank loan because of religious or other concerns an opportunity to purchase their houses.Originality/valueThe model proposed in this study is a unique and original model that aims to provide a bank loan-free, sustainable home financing solution by integrating the pension funds, real estate investment funds and diminishing partnership in one ecosystem.

ALTERNATIVE HOME FINANCING: A SIMULATION APPROACH

This paper looks at alternative financing for first-time buyers to accommodate an unprecedented occasion that may have a greater impact on homebuyers’ credibility and default risk. The existing financing under the common conventional mortgages may need to be studied to move towards Musharakah Mutanaqisah (MM) provided under Islamic financing. The simulation indicates that MM could deliver a much stable and affordable platform for buyers as the financing is on a sharing basis because the risk will be shared between the financier and the buyer. The finding also demonstrates the possibility of changing to MM as both parties could benefit even if the buyer faces total default. This simulation highlights the possibilities of alternative home financing and promoting affordable homeownership.

Consumer Perceptions in the Selection of Non-Bank Sharia House Ownership in the City of Bandar Lampung

Whether the perception of religiosity, price perception, knowledge, service affects the probability of consumers in the selection of non-bank Sharia home ownership financing in Amanah Property Syariah bandar Lampung city to analyze the influence of these 4 variables on the probability of consumers choosing non-bank Sharia home ownership financing in Bandar Lampung city, a descriptive method is used with a type of quantitative research used to examine a certain population or sample. The data will be processed with econometric analysis tools and mathematical calculations. The econometric model used to answer the research questions is factor analysis then continued with logit regression analysis. The results of the instrument validity test, each question indicator has r calculate r table so that each question indicator on the variables of religiosity, price perception, knowledge and service is valid. The H-L Statistics value is 13.5910 0.05 then the model is said to be feasible. From the t test data above, it can be seen that: For the value of prob X1 of 0.2610 where 0.05 means that the variable X1 has no effect on variable Y. For the value of prob X2 of 0.7837 where 0.05 means that variable X2 has no effect on variable Y. For the value of prob X3 of 0.0022 where 0.05 means that the variable X3 affects the variable Y. For the value of prob X4 of 0.3473 where 0.05 means that variable X4 has no effect on variable Y. Fadden R-squared is 0.183829 meaning that 18% of variable X in this study is able to affect variable Y while 84% is influenced by variable X outside this study. Based on the value of statistics z and probability, only the variables of knowledge are significant to the decision to choose non-bank Islamic home financing in Amanah Property Syariah, while the 3 variables are insignificant. All free variables (religiosity, price perception, knowledge and services) are jointly able to influence the customer's decision to choose non-bank Sharia Home Ownership Financing (PPR). However, religiosity, price perception and service factors do not have a significant effect on the decision of customers to choose non-bank Sharia Home Ownership Financing (PPR). The knowledge factor is the dominant factor in consumers' decision to choose non-bank Sharia Home Ownership Financing (PPR).

Implementasi PSAK NO. 106 Akuntansi Musyarakah Pada Produk Pembiayaan Kepemilikan Rumah

As on of the Business measuring tools, accounting is inseparable from Business Activities owing to its function to provide information about the financial condition and as a medium of accountability between parties. Therefore, accounting standards are essentially required to prevent from any kinds of abuse of Authority and Disputes. Some Research findings highlights that most of the banks have not implemented accounting standards. This Research uses qualitative normative approach by researching financing managers as the Research subjects representing the bank institution. The data Wet collected through instrument of interview and documentation. The data Wet analyzed with qualitative analysis. In practice, this bank has complied with accounting standards. Such statement of accounting standards applied to home financing Products is its conformity with statement of Financial Accounting Standards (PSAK) No. 106 on Musyarakah Accounting.

Factors influencing customers’ selection of Islamic home financing: a systematic review

PurposeThis study, using systematic literature review (SLR) aims to highlight and summarise current studies on the factors influencing customers’ Islamic home financing (IHF) selection and Islamic banking product preference, which has gained popularity within the banking sector over the past three decades. The SLR could map evolution and research fields, recommend a particular categorisation and determine primary issues to demonstrate current trends, future research directions and theoretical development.Design/methodology/approachThe SLR was performed with a four-step reporting standard for the systematic evidence syntheses review method (research question formulation, systematic searching, quality assessment and data extraction) using 33 screened articles between 2008 and 2020 from two primary databases (Scopus and Web of Science) and one supporting database (Google Scholar).FindingsThe resulting factors could be categorised into four primary themes: consumer behaviour, consumer attributes, bank attributes and bank attributes (Islamic). The themes were subsequently divided into 16 sub-themes. Notably, all the factors proved essential for consumers’ evolving preferences and product competitiveness in the market.Research limitations/implicationsThis study encountered two limitations based on database selection and research period.Practical implicationsThis SLR aimed to offer useful insights into the factors that should be prioritised by financial institutions for marketing approaches by investigating consumer behaviours.Originality/valueThis study pioneered an SLR on the study area for useful insights into the current research limitations and recommendations on future study directions. Specifically, the study method facilitated critical discussions and comparisons to past research outcomes and objectivity with triangulation from distinct perspectives.

The practice of imposing default rate in Islamic home financing product in Malaysia: Analysis from regulatory and Shariah perspective

In developing and structuring an Islamic banking product, one of the areas that should be addressed is to mitigate risk that includes default risk. Financial institutions will always be exposed to the risk of default by customers. This is faced by Islamic banks as well when granting financing facilities to customers irrespective of the underlying Shariah contracts that apply to the product structure. In order to mitigate such risk, bank normally will impose late payment charges if the instalment amount is not received by the payment due date. In addition to the normal late payment charges, banks may also impose default rate on customers who have defaulted within certain period. As such, this study analysed the practice of charging default rate in Islamic home financing product involving sale- and lease-based contracts. This qualitative study adopted the explanatory methodology as the main method of data collection from relevant documents, such as Shariah-related regulatory policies, Shariah resolution issued by Bank Negara Malaysia (BNM), decided court cases, and Islamic bank product documentation related to the practice of charging default rate. Next, secondary data from journal articles and other published sources, including Shariah literature relevant to this study, were deployed to analyse the said issue. Evidently, several Islamic banks in Malaysia seem to impose default rate in their product structure. Such practice may not be consistent with the spirit of Shariah and Islamic finance if the purpose is to gain more income while the customers face financial issues. This study prescribes Shariah scholars and regulator to re-evaluate the current regulatory policies and product structure to ensure that they embrace the spirit of Shariah, apart from protecting consumers from heightened financial burden.

DIMINISHING PARTNERSHIP (MUSHARAKAH MUTANQISAH) PRODUCT FOR ISLAMIC HOME FINANCING: THE CONCEPT FOR ISLAMIC FINANCIAL INSTITUTIONS IN AFGHANISTAN

This study aims to examine the factors influencing the Practitioners’ acceptance on Musharakah Mutanaqisah (MM) Islamic home financing (IHF) products amongst clients of Islamic financial institutions in Afghanistan. Using the MM model as a baseline theory, data are collected from the practitioners (Managers, Head of departments and Shari’ah advisors) of IFIs in Malaysia and Afghanistan, using self-administered open-ended questions. Using the qualitative method, the study finds that; attitude, subjective norm, perceived control and Compliancy of product are instrumental in determining the practitioners’ acceptance of Islamic home financing products. It is also discovered that; gender, academic qualification and monthly income have their own effects on without the consumer acceptance. There are three limitations for future studies of IHF in Afghanistan. First, the current work does not include the experienced users who utilize Islamic home financing products. Second, the contribution of the present study is confined to the analyzed explanatory variables. Third, this study also has geographical constraints in which it will be conducted in Afghanistan. These limitations, however, provide directions for further future research. Essentially, this study is a pioneering effort in applying the MM model to the new context of IHF products and to integrate the stakeholders’ acceptance for lower-income class in Afghanistan. This study introduces the compliancy of product and factors in explaining the practitioners/stakeholders acceptance on MM Islamic home financing products. Most fundamentally, this study proposes a modified intellectual framework that is of utmost importance to predict the demand for IHF products in the future.

Qualitative study in identifying factors affecting the behavior of Muslim generation Y towards Islamic home financing products in Malaysia

House is the most important basic need for the human survival, however many individuals especially those who are categorised in the category of generation Y still do not acquire a house due to various factors. It is quite a normal practice for most of home-buyers in Malaysia to purchase a house through banking institutions. However, as a Muslim, it is an obligation to purchase and acquire a house through Islamic financial institutions (IFIs) as it is accordance to the Shariah principle. The objective of the study is to qualitatively identify factors affecting the behavior of Muslims generation Y in Malaysia towards Islamic home financing products. Apparently, it is found that religious belief, profit rate, offer and promotion, and fast service (loan approval) are factors in affecting Muslims generation Y in choosing Islamic home financing products. Afterwards, the study proposed to integrate the findings (identified factors) with the theory of Attitude-Behavior-Context (ABC). The study findings are expected to contribute significantly to the theory, methodology, and empirical practices.

Islamic mortgage adoption: examining the moderating effects of Islamic altruism

PurposeUsing the theory of planned behaviour (TPB) as an analytical framework, this paper aims to investigate the direct effects of attitude, subjective norm, perceived behavioural control, price fairness and Islamic altruism. It also explores how these path linkages can be moderated by Islamic altruism.Design/methodology/approachData are gathered via survey questionnaires on 287 Muslim bank customers in major cities of East Malaysia. The data are then tested using partial least squares.FindingsThe results show that attitude, subjective norm, perceived behavioural control, price fairness and Islamic altruism are significantly influenced by Muslim bank customers’ intention to choose Islamic home financing products. Islamic altruism is also found to significantly moderate the relationship between price fairness and behavioural intention.Research limitations/implicationsThree limitations are available for future research that include the geographical restriction, respondents’ selection and a limited number of battery items used.Practical implicationsEssentially, the results of this study serve as a guide for Islamic bank managers or mortgage providers to improve their pertinent marketing strategies, which are vital to enhancing the acceptance rate of Islamic mortgage.Originality/valueThis study extends the TPB model by incorporating price fairness and Islamic altruism into the Islamic home financing context.

Maqasid-based consumer preference index for Islamic home financing

PurposeUsing the maqasid-based consumer preference index (MCPi), this study aims to investigate customer preference for Islamic home financing.Design/methodology/approachThe current study, based on valid 1,034 usable questionnaires and the MCPi, evaluates consumer choice for the supplied Islamic home finance products by 16 Islamic banks in Malaysia.FindingsAccording to the findings, all banks have a moderate value of MCPi. Bank Islam Malaysia Berhad is at the top of the list, followed by Maybank Islamic, Commerce International Merchant Bankers Islamic and Malaysia Building Society Berhad.Research limitations/implicationsThe MCPi is used in this study to test a new technique to measuring consumer preference. The contributions are confined to these particular variables – Educating Customer, Establishing Justice, Promoting Welfare and Fulfiling Islamic Debt Policy. The research also has limitations in terms of the facility’s general setting. Future research may shed light on these issues from new angles.Practical implicationsThis research offers banks a new way to manage their products based on maqasid al-Sharīʿah.Originality/valueIn the context of Malaysia, this study introduces the MCPi, a new measure of consumer preference for home financing.

Predicting customers’ acceptance towards Islamic home financing using DTPB theory

PurposeThe purpose of this paper is to determine the factors that may influence customers’ acceptance of Islamic home financing and identify the possible moderator, which may be relevant using the decomposed theory of planned behaviour (DTPB) in the context of Malaysia and Pakistan.Design/methodology/approachLiterature on Islamic mortgage and DTPB is reviewed in a bid to identify the determinants that may contribute to customers’ desire to participate in Islamic home financing.FindingsThe review indicates that customers’ acceptance of Islamic home financing is not only determined by the subjective norm, attitude, perceived behavioural control but also by the added construct of awareness and decomposed variables, namely, perceived compatibility, perceived relative advantage, peers influence and self-efficacy. In the context of the current study, the country is proposed as a moderator variable that may influence the relationship for customers’ acceptance of Islamic mortgages.Research limitations/implicationsIn terms of conceptualising the model, only two countries are considered, which is Malaysia and Pakistan as categorical variables or moderators incorporated in DTPB.Originality/valueExisting literature on Islamic mortgages makes it evident that DTPB is yet to be applied in the context of studying Islamic home financing. This study extends the application of DTPB in the context of customers’ acceptance of Islamic mortgages in two countries, Malaysia and Pakistan. This paper will be a helpful resource for future researchers, academicians and managers of Islamic banks at large.

Can Malaysia’s National Affordable Housing Policy Guarantee Housing Affordability of Low-Income Households?

Housing affordability is a long-held issue in Malaysia, and housing policies have been implemented for low-income households over the years. However, there is a contradiction that housing affordability of low-income households has not been met, while the bulk of affordable housing is still vacant. In 2019, Malaysia enacted the National Affordable Housing Policy (DRMM) which was intended to improve housing affordability for low-income groups. This paper aims to answer why Malaysia’s long-term implementation of affordable housing policies cannot guarantee housing affordability, and whether the DRMM can effectively improve housing affordability as expected, by comparing the empirical factors of housing affordability. A literature review and a comparative analysis are adopted in the research. The paper concludes that low household income, high land price, construction cost and compliance cost, mismatch of supply and demand in terms of quantity, the instability of the national economy, low home financing ability, and incomprehensive housing planning have caused low housing affordability of low-income groups in Malaysia. The DRMM as anticipated can improve housing affordability by supplying affordable housing more precisely, lowering housing costs, and improving home financing ability. However, the exclusion of household income and economic factors may cause the ineffectiveness of the DRMM in improving housing affordability for low-income households.

ANALISIS PENERAPAN ETIKA BISNIS ISLAM DALAM MEKANISME PENGAJUAN PRODUK PEMBIAYAAN GRIYA RUMAH BARU DI BANK SYARIAH MANDIRI KANTOR AREA THAMRIN – JAKARTA PUSAT

Researchers see some people still do not understand about the mechanism in applying home financing products in sharia banks. This research aims to provide information about the process of applying for sharia-based housing financing, but also wants to know whether the process has implemented Islamic Business Ethics and the foundation of law and sharia. Islamic Business ethics theory refers to the instrument or regulation of three principles of regulation of the Financial Services Authority No. 4/POJK. 05/2018. About secondary housing Financing Company Article 8 paragraph (3) namely the principle of justice (' ADL), balance (Tawazun), Benefits (Maslahah), and Universalism (Alamiyah), does not contain things forbidden, such as Riba, Maisir, Gharar, Zalim, Risywah, Maksiat, Haram object, and carried out by using AKAD in accordance with the fatwa of the National Sharia Council of Ulama Indonesia (DSN MUI). The collection of research data is done by observation methods, interviews, and documentation. Analysis is done with a qualitative descriptive approach, using source triangulation.

DIMINISHING MUSHARAKAHIN ISLAMIC BANKS: AN ANALYSIS BASED ON HOME FINANCING

Islamic Banking is one of the fastest growing banking systems in the modern world. It has also achieved significant growth in the Pakistani banking sector in the recent decades. Diminishing Musharakah (DM) is an Islamic mode of finance which not only provides home financing facilities to the customers but also provides other long term financing transaction such as machinery and equipment financing in Islamic banks. In September 2020, DM has the largest share in the Islamic banking financing in Pakistan at 34.5 percent. Considering the widespread acceptance of DM, this paper discusses the shariah structure of DM and its use as a home finance product, specifically its variants, in Islamic Banking Institutions. This paper also clarifies the issues which create confusions in the minds of the common public about Islamic banking products, emphasizing the importance of this product for Islamic Banking Institutions

Commodity Murabahah Home Financing in Malaysia in the Case of Abandoned Housing Projects: A Shariah Analysis on Its Operation


 
 
 Commodity murabahah has received extensive exposure since the Islamic financial industry shifted from bay’ bithaman ajil for its banking and financial products. The muamalat based contract which is innovated from the classical tawarruq with certain modifications has proliferated in many of the retail products in Malaysia including home financing. This paper analyses the financing facility offered to Malaysian homebuyers to investigate the extent of safeguards present in the facility when there are project abandonments. The operation of commodity murabahah as practiced in Malaysia for houses under construction are discussed and analysed with respect to their operations to know whether they conform both in form and substance. The analysis is done via library research while semi-structured interviews on operation of the facilities are done with experts in the field. The study finds that the commodity murabahah facility catered lacks the necessary safeguards for customers of Islamic banks. This can further aggravate the situation of homebuyers who have no proper recourse when their under constructed houses are left abandoned by developers. The paper calls for a more Shariah based oriented facility for houses under construction which is close to its muamalat nature in order for the rights and obligations of parties involved in home financing be inherent.