THEORETICAL IMPACT OF ENHANCED MUSHARAKAH MUTANAQISAH HOME FINANCING ON REAL ESTATE PRICES

Alam I. Asadov () and Mansor Ibrahim
Additional contact information
Alam I. Asadov: Prince Sultan University

Journal of Islamic Monetary Economics and Finance, 2018, vol. 4, issue 1, 133-160

Abstract: This paper theoretically analyzes two alternative modes of home financing. The first mode is the conventional housing loan and the other is Enhanced Musharakah Mutanaqisah (EMM) home financing. Our results reveal the EMM based setting is superior to the conventional housing loans in at least two aspects. These are the prevention of house price inflation in all phases of economic business cycle and the smoothening of real estate cycles. This means that, under the EMM, the risk of real estate bubble formation is subdued, which should prove to be welfare improving.

Keywords: Musharakah Mutanaqisah; Islamic home financing; RE cycles; RE bubble (search for similar items in EconPapers)
JEL-codes: G21 P40 R31 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://jimf-bi.org/index.php/JIMF/article/download/747/726 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:idn:jimfjn:v:4:y:2018:i:1h:p:133-160

DOI: 10.21098/jimf.v4i1.747

Access Statistics for this article

Journal of Islamic Monetary Economics and Finance is currently edited by Dr. Ali Sakti

More articles in Journal of Islamic Monetary Economics and Finance from Bank Indonesia Contact information at EDIRC.
Bibliographic data for series maintained by Lutzardo Tobing ( this e-mail address is bad, please contact ) and Jimmy Kathon ().