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This study aims to address the critical need for innovative financing solutions in the global housing sector, focusing specifically on Malaysia’s distinct housing finance system encompassing both conventional and Islamic loans. The primary objective is to develop a transformative housing finance model that addresses affordability challenges and reshapes the Malaysian housing landscape.

The study presents an alternate housing finance model for Malaysia, integrating lower monthly payments and reduced household debt. Key variables include house price appreciation rates, interest rates, initial guarantee fees and loan-to-value ratios. Inspired by the Help to Buy (HTB) scheme, the model aligns with proven global initiatives for enhanced affordability, balancing payment amounts, loan interest rates and acceptable price thresholds.

The study’s findings promise to address affordability disparities and reshape Malaysia’s housing finance landscape. The emphasis is on introducing a structured repayment plan that offers a sustainable path to homeownership, particularly for low-income families. Incorporating the future value adaptation concept, inspired by reverse mortgages and Islamic finance, enhances adaptability, ensuring long-term sustainability despite economic shifts.

The proposed model promotes widespread access to homeownership, offering practical solutions for policymakers to improve affordability, prompting adaptable risk management strategies for financial institutions and empowering potential homebuyers with increased flexibility.

The study introduces a transformative housing finance model for Malaysia, merging elements from reverse mortgages, Islamic finance and the HTB scheme, offering potential applicability to similar systems globally.

This study aims to determine the relationship between the banking industry and home financing by conducting a regression analysis between the mortgage loan interest rates and the number of housing sales, and based on the results of the analysis, this paper proposes a new and alternative interest-free home financing model by directing the savings of the people in pension funds into real estate investment funds (housing fund), specifically established to provide a bank loan-free home financing solution. Diminishing Musharakah (partnership) is also integrated into the model from an interest-free and saving economy perspective. The model developed also provides opportunities to increase the size of the real estate investment funds and provide alternative investment tools to pension funds.

While the global financial crisis resulted from the mortgage crisis in the USA in very recent history, the world has been experiencing the evolution of a new health crisis, COVID-19, a pandemic that has been heavily affecting the global economy in the past two years. The housing sector is among one of the major industries that may be affected by this new global crisis because of the high dependency of the current home financing models on the banking industry, which is carrying the burden of the pandemic. The rapid increase in global debt volume, housing prices, inflation and interest rates are observed as bad signs that may increase the risks of the housing industry. A potential decrease in purchasing power because of high inflation rates may decrease the welfare of people and reduce the income level. While the total debt keeps increasing worldwide, and central banks are considering increasing the interest rates, any potential default in the repayment of the mortgage loans may trigger a new mortgage crisis as the bank loan-dependent financing system of the housing industry lacks alternatives. Thus, a relationship analysis between the banking and housing sectors is required to figure out the dependency of home financing on the banking industry, and a new sustainable home financing model is needed to protect the housing industry and the homebuyers from a negative effect of a new possible financial crisis.

The results of the analysis exhibit that there is a strong negative relationship between the mortgage loan interest rates and the total home sales. As a result, the new model is suggested and this new model is tested in an emerging country, Turkey, with the real housing sector and economic data where the interest rates are high and the home prices are booming. The results exhibit that the new interest-free home financing model provides a more economic financing solution compared with the high financing costs of bank loans.

The model proposed in this study is unique, and there is no such system that has integrated the pension funds, the real estate investment funds and diminishing partnership in one ecosystem. It is expected that the model may decrease the dependency of home financing on the banking industry and decrease the risks of the housing sector in the case a new financial crisis occurs.

While providing a sustainable and alternative interest-free home financing tool, the model also provides individuals who do not prefer to use any bank loan because of religious or other concerns an opportunity to purchase their houses.

The model proposed in this study is a unique and original model that aims to provide a bank loan-free, sustainable home financing solution by integrating the pension funds, real estate investment funds and diminishing partnership in one ecosystem.

This study aims to merge the world’s proven ways of housing finance, including musharakah mutanaqisah, housing cooperatives and real estate crowdfunding, to present an alternative housing unaffordability solution based on the Islamic finance principle. It is intended to reduce the burden of funding for both sides (consumers and developers) and create win–win chances for all stakeholders, including intermediaries. By moving away from debt financing and merging the features of crowdfunding and cooperative, it is hopeful that the burden of home ownership will no longer be the case.

This paper presents the opinions of potential Chinese homebuyers (minority Muslims and most non-Muslims) and a few industry experts toward the proposed model via a mixed research method.

According to the findings, the majority of respondents agreed with the proposed paradigm. Just concerned that China’s lack of community culture and trust could pose a major threat to implementation. However, this paper argues that Chinese local governments may perform pilot testing in places where Islamic culture is prevalent. Their unique community culture and fundamental understanding of Shariah law may affect the viability of the proposed model.

The proposed model would increase the applicability of Islamic finance as a way of protecting the social order of communities in the spirit of upholding justice and fairness. A new type of housing loan based on musharakah mutanaqisah may squeeze out the real estate bubble and provide stakeholders with a multidimensional investment channel. In particular, the study identifies the impact of Chinese Islamic financing on government and cultural needs. It presents possible challenges for implementing the proposed model in reality and helps bridge the gap between theory and practice.

This study aims to propose a new housing affordability solution by combining the Islamic finance concept of Musharakah Mutanaqisah (diminishing partnership) with a cooperative and crowdfunding model. The proposed alternative housing loan model is presented to experts in financing and real estate business, whose views and comments were solicited to evaluate the applicability of the proposed model in real world.

This is a qualitative study that uses semi-structured interviews to determine the initial thoughts of various stakeholders regarding the adoption and implementation of the proposed model.

The majority of experts (interviewees) agreed with and appreciated the model’s original ideas but expressed concern over the absence of community culture and trust in China, which could represent a serious threat to the model’s viability. It is anticipated that the suggested model will be implemented as pilot projects by the local government in places where Islamic culture and faith are more widespread, hence possibly impacting the model’s effective implementation.

As there are insufficient Islamic financial specialists in China, the limitation of this qualitative study is the small sample size. If certain policymakers could participate, the outcomes would be more hierarchical and trustworthy.

This is, to the best of the authors’ knowledge, the first study of its kind to examine the viability of this innovative Islamic cooperative housing finance scheme within the context of a specific housing issue in China.

This paper aims to propose a new housing finance mechanism through gold price as an alternative to interest rate in Islamic home financing, especially on Bai’Bithaman Ajil (BBA) contract.

This study using simulation approach to calculate the monthly installments for home financing using gold price references. In simple terms, propose a financing formula in the BBA contract by converting the selling price of the house to the gold price, and then the monthly installments also follow the actual gold price. The authors provide an example by simulating this formula using historical data and cases of housing financing at Indonesian Islamic banks. The authors compare housing financing models based on gold prices and interest rates. Finally, The authors can compare the two housing financing models that are affordable for low-income people.

The results show that in the initial period, monthly installments of BBA based on gold price were lower than home financing based on interest rate. This result makes it possible for low-income people who cannot access financing based on interest rates to access financing based on gold price. However, the total installments of financing based on gold prices are higher than the financing model based on interest rates.

The paper confines one contract, namely, BBA, as it is claimed to be more Shariah-compliant than others.

These findings suggest an alternative model for Islamic banks and regulatory authorities in Indonesia to replace the interest rate reference with the gold price in BBA contract housing financing. This model can offer competitive advantages for Islamic banks, including lower initial installments and inflation-protected profits, serving as a means of differentiating them from conventional banks.

Gold price-based housing financing model in Islamic banks will increase the affordability of housing financing for low-income people.

This paper tries to solve two problems, namely, first, the problem of assuming that Islamic and conventional banks are the same, and second, the problem of housing finance affordability. This study needs to be explored.

Since the 2007–2008 financial crisis, the markets related to housing finance have been restoring their tools and instruments in order to avoid a new crisis. In this period, while attempting to eliminate structural problems in existing housing finance instruments, on the other hand new products were tried to figure out. In particular, products based on risk sharing have frequently come to the forefront, both in the academia and the industry. In this direction, one such innovative product is the participating mortgage, in which the borrower obtains below-market interest rates in return for a percentage of the property’s future appreciation and/or net operating income. Particularly used in conventional markets, participating mortgage can also be applied within the Islamic finance thanks to the model it is based on. This chapter attempts to introduce the method of participating mortgage with detailed background and intellectual investigation. Including the modeling of participating mortgage, this study also shows how this method can be designed under Islamic finance. Furthermore, implications and fields of application are explored with a discussion of challenges. In this chapter, considering the achievements of participating mortgage method, it is asserted that it can enable the product diversity of the Islamic banks, thereby increasing the share in the global banking sector.

This study aims to identify and establish effective housing financing concepts to be adopted by government in achieving its mandate of providing sustainable affordable housing for the poor to decrease the building of shacks, as well as proposing solutions to the housing deficit in South Africa. A rise in demand and shortage in supply of housing calls for the need to address issues of affordable housing in South Africa, and developing countries in general, to ensure a stable and promising future for poor families.

Literature has revealed that the South African government, at all levels, accorded high priority to the provision of low-cost housing. Thus, government has adopted subsidy payment as a method of financing affordable housing to ensure that houses are allocated free to the beneficiaries. This also addresses the historically race-based inequalities of the past, but unfortunately, this has not been fully realised. This study uses a sequential mixed method approach, where private housing developers and general building contractors were the research participants. The qualitative data were analysed using a case-by-case analysis, and quantitative data were analysed using a descriptive statistical technique on SPSS.

The results of the qualitative analysis reveal a gross abuse of the housing subsidies system by the beneficiaries of government-funded housing in South Africa. This is evident from illegal sale of the houses below market value. This has led to a continual building of shacks and an increased number of people on the housing waiting list instead of a decrease in the housing deficit. The results from quantitative analysis affirm the use of “Mortgage Payment Subsidies, Mortgage Payment Deductions, Down-Payment Grant and Mortgage Interest Deductions” as viable alternatives to subsidy payment currently in use to finance affordable housing projects by the South African Government.

At the moment, the focus of the South African National Government is continual provision of free housing to the historically disadvantage citizens, but the housing financing method being used encourages unapproved transfer of ownership in the affordable housing sector. This study thus recommends the use of an all-inclusive housing financing method that requires a monetary contribution from the beneficiaries to enable them take control of the process.

The relational interface model proposed in this study will reduce pressure on government budgetary provision for housing and guarantee quick return of private developers’ investment in housing. Government must, as a matter of urgency, launch a continuous awareness programme to educate the low-income population on the value and the long-term benefits of the housing.

This study aims to propose a new model of Islamic cooperative mortgage of housing finance (ICOM) to provide a lower monthly initial amount with a longer tenure for the low- and middle-income members. This model is developed to ease the burden on borrowers concerning the high initial down payment (ID).

The ICOM model is a no-interest mortgage and is developed based on the cooperative home mortgage model by Ebrahim (2009). The model is verified using numerical examples to ensure its feasibility to produce lower monthly initial amounts and compared to the cooperative home mortgage.

From the numerical example, the ICOM model shows a lower monthly initial amount with a longer tenure compared to the cooperative home mortgage. The monthly payment is also lower than the cooperative home mortgage.

The authors compare their model with Ebrahim’s (2009) cooperative home mortgage because of a constraint of limited previous studies on housing finance. Therefore, this model is developed by considering the unaffordability of the initial down payment among low-income borrowers. As this model introduces a lower monthly initial amount, the authors expect it can reduce the unaffordability problem of high initial down payment.

The authors also expect that a lower monthly initial amount with a longer tenure can ease the burden among the low-income borrowers by reducing their consumption on housing.

This paper provides a non-interest Islamic cooperative mortgage and lower monthly initial amount with a longer tenure for the low- and middle-income borrowers.

This paper aims to provide comprehensive review of Islamic housing finance models. The paper provides detailed mechanism and solution to contemporary issues of these models..

This paper is conceptual in nature. Based on an extensive study of literature, this paper explains working of two Islamic models al-Bay’ Bithaman Ajil (BBA) and the Musharakah Mutanaqisah (MM) with hypothetical examples.

It was revealed in the study that BBA is just convergence of conventional housing finance and does not fall in line with shariah regulations. MM approach is a relative new concept and strictly following shariah guidelines. MM approach is based on welfare for all rather than profit for few. There were some issues spotted with MM model when implemented on the ground, and hence this study came up with solution to such issues.

This paper cannot be tested until the models are practically applied. This MM contract is new and will take some time to be accepted by customers, but its reliability promises it..

This study is original and new, as it finds BBA not permissible which no other study has concluded so far. Also issues in these models, and their solutions were studied first time.

Most households in Sub-Saharan African cannot afford adequate housing. Most often, their pension benefits are also meagre, usually resulting from low contribution levels and mismanagement. Coupled with low life expectancies, most would not live to enjoy the benefits of pensions, thus validating the need to utilize their hitherto deferred pension benefits for immediate housing investment and consumption.

Quantitative research methodology via the present value technique was used in valuing pension benefits to demonstrate the potential of pension schemes as savings mobilization mechanisms for long-term pension-backed housing financing in Ghana.

Policy wise, the paper provides some evidence to support proposals for the development of pension-backed housing finance systems in Ghana with lessons for Sub-Saharan Africa. The authors demonstrate that the Tier 2 defined contribution mandatory occupational pension scheme could serve the purpose of a savings mobilization mechanism for long-term housing financing. The authors observe that by increasing the Tier 2 contribution rate to 30 per cent, the majority of the sample, mainly of the middle-income class, could accumulate between US$11,000 and US$17,000 over their working life. At the same rate, between US$5,783 and US$9,550 could have been raised as savings between 2010 (when implementation began) and 2014. This could form a substantial equity contribution in a mortgage investment and or borrowed on a housing microfinance basis.

The paper contributes to the ongoing debate on the need to develop alternate savings mechanisms and collateral assets using pension assets, other than property, for mortgage financing. The proposals made are aimed at influencing policy by way of advocating for the use of latent pension equity to improve the housing conditions of members while they are alive, and also to suggest pension-backed housing financing as an alternative investment option. A comprehensive study would be required to settle issues of scalability, pricing and model design.