The development of Islamic house financing

Among all of those products and services offered by Islamic banking, house financing has received a high demand from the customer which need a long commitment and giving a financial implication to the household. Thus, the aim of this study is to explore the development of Islamic house financing by looking at the current practice of Islamic house financing contract applied by the Islamic bank in Malaysia and to understand some of its practical issues such as pricing and ownership issues. This study is a qualitative research and the data was collected through a face-to-face interview with five informants who are among the expertise in Islamic house financing. The qualitative data was being analysed by using content analysis approach through Creswell analysis. The finding of this study found that, although there are variety of Islamic house financing contract available in the market, tawarruq or commodity murabahah has become the current practice of Islamic house financing contract in most of Islamic bank in Malaysia. The selection of contract was determined by the Shariah body in the respective bank and with the permission of Shariah Advisory Council and Bank Negara Malaysia and its was influence by the worldwide acceptance. The study also found that, the misconception and misunderstanding among the society regarding the pricing and ownership issues in Islamic house financing is because of the lack of knowledge and exposure about the practice of Islamic house financing. Thus, it is important to expose and educate the society about the real operation and concept applied in Islamic house financing.