The popularity of Islamic real estate is beginning to take off as never before and its reach is now beginning to spread south and east from Malaysia to Indonesia and Australia and west from the Middle East to the UK and the US. A large number of factors have influenced this. One of them has been the booming economies of Middle Eastern countries like the UAE, Bahrain, Qatar and Saudi Arabia, another would be the increasing availability and popularity of Islamic finance in the UK, while a third area would be the innovative Islamic finance solutions that Islamic finance companies in Malaysia have a habit of pioneering.
The rising cost of living and the fact that the average wage is not increasing at the same rate means that the demand for affordable real estate is forcing many to look to Islamic finance as an alternative to conventional companies. House prices have been rising steadily for a number of years in the US, Europe and Asia and this has created opportunities for Islamic finance companies that offer mortgage solutions to those who feel they have been priced out of the market by some conventional banks which offer loans that include exhorbitant interest rates and this has fuelled the impression that Islamic finance offers a cheap solution.
Sanjiv Anand managing director, Cedar Management Consulting International said, “In whatever assessments we have done of Islamic banking, if you look at the customer profile, there is about 20 to 30 per cent of the customers who will do Islamic banking for strong sentimental reasons and there is 50 to 60 per cent of Muslims who are banking with an Islamic bank because they see the financial benefit of doing so.”