Understanding Islamic Finance #
Question answered by Ustaz Haron Masagos of FAiWA:
We laid down 2 good pointers from the criticism and our counterarguments.
- While some scholars argue that the Muslim community will be left behind other communities over the long run if they do not participate in the property market, we believe that there are other means of doing so for example via Shariah Compliant REITS or property shares that are deemed permissible.
- Some also argue by taking loans on the 2nd property, by way of asset enhancement strategy, over time the property will grow in value, there are many benefits amongst them: Muslims can rent out the property to have a positive cash flow or receive lump sum money upon liquidation. This can help Muslims pay and avoid other usurious loans like a credit card, renovation, and education loans, etc. We think these are hypothetical positions that Muslims can avoid other usurious loans while the certainty that has happened, they are already incurred the usurious loan in the 2nd property purchase transaction with no sound basis of darurah or the level of dire needs to involve in these transactions.
