Open AccessIslamic Financial Institutions and Real Estate Cycle
Author(s) -
Siti Latipah Harun,
Norazlina Abd. Wahab,
Rosylin Mohd Yusof
Publication year - 2018
Publication title -
indian-pacific journal of accounting and finance
Language(s) - English
Resource type - Journals
ISSN - 2590-406X
DOI - 10.52962/ipjaf.2018.2.3.57
Subject(s) - real estate , finance , real estate investment trust , business , islam , corporate real estate , capitalization rate , financial crisis , real estate development , business cycle , economics , macroeconomics , philosophy , theology
The role of Islamic financial intuitions is essential in providing Islamic financing specifically to investors and stakeholders to invest in real estate. Therefore, understanding the link of the real estate cycle to the financial institutions is crucial. This is because the real estate cycle is one of the critical elements that will affect financing decisions and strategies of the banking sectors. Hence, this paper employed meta-analysis which aims (1) to systematically review survey the growing literature on real estate cycle and its links to the financial institutions; (2) to highlight possible cross-country trend analysis financial strategy among investors in dealing in with the real estate cycle. The results of the study suggest that during the peak cycle or period of crisis, most investors are risk-averse and increase the risk to the financing of real estate as well. This real estate cycle that occurs almost every 10 years in conventional real estate sectors also give some consequences to the Islamic financial institutions. This paper suggests to investors to understand the real estate cycle and its impact on Islamic financial institutions.