Islamic Banking Leads Home Loan Segment

Islamic mortgage loans are gaining popularity in Malaysia

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Malaysia has a vibrant property market and the country’s National Home Ownership Campaign (HOC) is continuing to create interest among homebuyers in the residential segment. Property market consultancy firm Knight Frank-Malaysia says many developers are participating in the HOC as it presents a good opportunity for them to clear their existing inventories, which is positive for the residential market.

Malaysia has one of the highest levels of income per capita in Southeast Asia and the country has expanded its real estate sector to provide housing, office and commercial properties to a growing middle-class. However, analysts believe the country’s housing market is slowing sharply, after the introduction of higher stamp duty on high-value properties, and slower economic growth. The country’s Valuation and Property Services Department said during 2018 the nationwide house price index rose by 3.31% (3.14% inflation-adjusted, down from 6.13% in 2017, 6.97% in 2016, and 6.47% in 2017. The average house price stood at RM416,993 (US$ 100,685) in 2018.

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