Shariah-Compliant Housing: Opportunities and Challenges in Modern Markets
Keywords:
Shariah-compliant Housing, Islamic Finance, Ethical Real Estate, Alternative Financing Models, Muslim Consumer MarketAbstract
This study examines the market potential and challenges of Shariah-compliant housing, which follows Islamic principles by avoiding interest (riba), gambling (maysir), and excessive uncertainty (gharar). With the global Muslim population growing and demand for Islamic value-aligned products increasing, there is a notable gap in awareness and understanding of Shariah-compliant housing among buyers and investors. Focusing on Malaysia, where the Muslim population is substantial and Islamic financial infrastructure is advanced, the study employs a mixed-method approach. Surveys of 150 Muslim respondents assess consumer preferences, while interviews with industry experts explore supply-side challenges. Findings indicate strong interest in Shariah-compliant housing, with 78% willing to pay a premium. However, barriers such as limited awareness, inadequate Shariah-compliant financing, and unclear regulations remain. The study suggests that addressing these issues through education, clearer regulations, and alternative financing is essential for market growth.
References
Abdullah, A. (2012). The Growth of Islamic Finance and Banking: Innovation, Performance and Challenges. John Wiley & Sons.
Bank Negara Malaysia. (2013). Islamic Financial Services Act 2013. Retrieved from http://www.bnm.gov.my/index.php?ch=en_legislation&pg=en_legislation_act&ac=643&lang=en
Bilal, M., Meera, A. K. M., & Abdul Razak, D. (2019). Issues and challenges in contemporary affordable public housing schemes in Malaysia: Developing an alternative model. International Journal of Housing Markets and Analysis, 12(6), 1004-1027.
Chapra, M. U. (1992). Islamic investment and the role of Islamic banks in the development of Islamic finance. Islamic Economic Studies, 1(1), 1-23.
Department of Statistics Malaysia. (2020). Population and Demography. Retrieved from https://www.dosm.gov.my/v1/index.php?r=column/ctwoByCat&parent_id=115&menu_id=L0pheU43NWJwRWVSZklWdzQ4TlhUUT09
El-Gamal, M. A. (2006). Islamic Finance: Law, Economics, and Practice. Cambridge University Press.
Idris, S. M., Bahari, Z., & Ahmad, F. A. (2022). Short-Run And Long-Run Relationship Of Islamic Home Financing In Malaysia: Analysis On Islamic Banks. Jurnal Ekonomi & Bisnis Islam, 8(2).
Ismail, R. (2017). The evolving landscape of Shariah-compliant housing in Malaysia: Opportunities and challenges. Asian Real Estate Society Journal, 12(2), 155-172.
Kassim, S. (2016). Islamic finance and economic growth: The Malaysian experience. Global Finance Journal, 30, 66-76.
Ministry of Housing and Local Government Malaysia. (2018). National Affordable Housing Policy. Retrieved from https://www.kpkt.gov.my/index.php/pages/view/582
Mohd Azmin, N. A., Khalifah, Z., Ismail, H. N., & Md Salleh, N. Z. (2015). Issues and Challenges in the Development of Shariah Compliant Hotels in Malaysia. Advanced Science Letters, 21(5), 1146-1149.
Pew Research Center. (2015). The Future of World Religions: Population Growth Projections, 2010-2050. Pew Research Center.
Qureshi, F., & Hidayat, S. E. (2016). Challenges in Implementing Musharakah Mutanaqisah Islamic Home Financing in Malaysia. Journal of Islamic Financial Studies, 2(02).
Usmani, M. T. (2002). An Introduction to Islamic Finance. Kluwer Law International.
Wahab, N. A., Hamzah, H., & Yusof, R. M. (2016). Promoting housing affordability in Malaysia: can Islamic finance play a role?. International Review of Management and Marketing, 6(8), 88-102.
