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Rental yield as alternative to interest rate in pricing musyarakah mutanaqisah home financing - the case for Malaysia.

The current practice of the Islamic banks in Malaysia is relying on the market interest rate as the reference benchmark pricing for musyarakah mutanaqisah home financing. It has been a subject of intense debate among scholars, researchers, industry players, and policymakers. While it is not prohibit...

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Main Authors: Redzuan, Nur Harena, Kassim, Salina, Abdullah, Adam
Format: Article
Language:English
Published: IIUM Press 2018
Subjects:
HG3368 Islamic Banking and Finance
Online Access:http://irep.iium.edu.my/67301/7/67301-Rental%20yield%20as%20alternative%20to%20interest%20rate.pdf
http://irep.iium.edu.my/67301/
http://journals.iium.edu.my/shajarah/index.php/shaj/index
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spelling my.iium.irep.673012019-01-11T09:53:00Z http://irep.iium.edu.my/67301/ Rental yield as alternative to interest rate in pricing musyarakah mutanaqisah home financing - the case for Malaysia. Redzuan, Nur Harena Kassim, Salina Abdullah, Adam HG3368 Islamic Banking and Finance The current practice of the Islamic banks in Malaysia is relying on the market interest rate as the reference benchmark pricing for musyarakah mutanaqisah home financing. It has been a subject of intense debate among scholars, researchers, industry players, and policymakers. While it is not prohibited, Muslim scholars have highly discouraged this practice as it could lead to a possible convergence between the practices of the Islamic banks and the conventional counterparts. Therefore, this study proposes rental yield an alternative reference benchmark pricing mechanism for musyarakah mutanaqisah home financing. The aim of the study is to assess whether rental yield is reflective of the real economic conditions. In achieving its objective, the study tests the relationships between rental yield with the macroeconomic and housing market variables. The study focuses on Malaysia and uses annually data frequency covering the period from 1988 to 2015 using Autoregressive Distributed Lag (ARDL)cointegration test. The study provides evidence that the proposed rental yield has long-run and short-run relationships with macroeconomic and housing market variables. The analysis shows that a short period required for the model to converge to the long-run equilibrium. The findings of this study would provide important insights on the viability of rental yield as an alternative to interest rate in pricing musyarakah mutanaqisah home financing. IIUM Press 2018-12 Article PeerReviewed application/pdf en http://irep.iium.edu.my/67301/7/67301-Rental%20yield%20as%20alternative%20to%20interest%20rate.pdf Redzuan, Nur Harena and Kassim, Salina and Abdullah, Adam (2018) Rental yield as alternative to interest rate in pricing musyarakah mutanaqisah home financing - the case for Malaysia. Al-Shajarah, Special Issue, Islamic Banking & Finance, (2018). pp. 69-88. ISSN 1394-6870 http://journals.iium.edu.my/shajarah/index.php/shaj/index
institution Universiti Islam Antarabangsa Malaysia
building IIUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider International Islamic University Malaysia
content_source IIUM Repository (IREP)
url_provider http://irep.iium.edu.my/
language English
topic HG3368 Islamic Banking and Finance
spellingShingle HG3368 Islamic Banking and Finance
Redzuan, Nur Harena
Kassim, Salina
Abdullah, Adam
Rental yield as alternative to interest rate in pricing musyarakah mutanaqisah home financing - the case for Malaysia.
description The current practice of the Islamic banks in Malaysia is relying on the market interest rate as the reference benchmark pricing for musyarakah mutanaqisah home financing. It has been a subject of intense debate among scholars, researchers, industry players, and policymakers. While it is not prohibited, Muslim scholars have highly discouraged this practice as it could lead to a possible convergence between the practices of the Islamic banks and the conventional counterparts. Therefore, this study proposes rental yield an alternative reference benchmark pricing mechanism for musyarakah mutanaqisah home financing. The aim of the study is to assess whether rental yield is reflective of the real economic conditions. In achieving its objective, the study tests the relationships between rental yield with the macroeconomic and housing market variables. The study focuses on Malaysia and uses annually data frequency covering the period from 1988 to 2015 using Autoregressive Distributed Lag (ARDL)cointegration test. The study provides evidence that the proposed rental yield has long-run and short-run relationships with macroeconomic and housing market variables. The analysis shows that a short period required for the model to converge to the long-run equilibrium. The findings of this study would provide important insights on the viability of rental yield as an alternative to interest rate in pricing musyarakah mutanaqisah home financing.
format Article
author Redzuan, Nur Harena
Kassim, Salina
Abdullah, Adam
author_facet Redzuan, Nur Harena
Kassim, Salina
Abdullah, Adam
author_sort Redzuan, Nur Harena
title Rental yield as alternative to interest rate in pricing musyarakah mutanaqisah home financing - the case for Malaysia.
title_short Rental yield as alternative to interest rate in pricing musyarakah mutanaqisah home financing - the case for Malaysia.
title_full Rental yield as alternative to interest rate in pricing musyarakah mutanaqisah home financing - the case for Malaysia.
title_fullStr Rental yield as alternative to interest rate in pricing musyarakah mutanaqisah home financing - the case for Malaysia.
title_full_unstemmed Rental yield as alternative to interest rate in pricing musyarakah mutanaqisah home financing - the case for Malaysia.
title_sort rental yield as alternative to interest rate in pricing musyarakah mutanaqisah home financing - the case for malaysia.
publisher IIUM Press
publishDate 2018
url http://irep.iium.edu.my/67301/7/67301-Rental%20yield%20as%20alternative%20to%20interest%20rate.pdf
http://irep.iium.edu.my/67301/
http://journals.iium.edu.my/shajarah/index.php/shaj/index
_version_ 1643618521498779648
score 13.211869

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