Sharia Compliant Mortgages Eye Niche Market

As a result of Sharia compliant banking services spreading over the country, the banks are bringing flexible mortgage schemes in in order to back real estate projects.
Sharia principles prohibit charging interests or investing in businesses that provide goods or services considered contrary to its teachings.

Still no home comforts for draft Saudi mortgage law

Contrary of what people thought, the adoption of the draft mortgage law has been delayed. The Shoura Council's Finance Committee will change some in the aspects of the definition and disbursement of a mortgage loan. After that, the draft law will be again submitted to the full Shoura Council at a future session for adoption.
Such a proccess can take a few months at least. Saudi bankers began to express their exasperation because of this never ending proccess and they state out that such things should have been discussed at the beginning.

UK plugs tax loopholes for Islamic mortgages

The UK Treasury is searching for laws in the Finance Bill that can block means of escapes in taxes. That includes conventional and alternative (Islamic) real estate transactions.
Between others, they want to stop people that are using offshore vehicles in order to avoid the payment of full stamp duty tax (SDLT).
The manipulation of these means of escape by acute lawyers and tax accountants is wellknown by HM Treasury but numerous Chancellors failed to stop this.

Shoura Council approves mortgage law

Shoura Secretary-General Muhammed Al-Ghamdi said the proposed amendments to the mortgage law were approved with certain reservations. The house felt that certain wordings related to loans should be modified to express the right objectives and process of housing loan disbursements.
The Finance Committee would carry out the anticipated modifications and resubmit the draft law at a subsequent session of the council.

Economist calls for creation of mortgage insurance entity

Cites risk averse mode of banks and lack of developed credit bureaus in the UAE.
The recomandation of Dubai Dr Nasser Saidi, chief economist of the DIFC Authority, is to establish an Emirates Mortgage Guarantee Corporation (EMGC) that would provide up to 30 per cent of the mortgage value and support the gap in the UAE mortgage market.

Saudi may delay mortgage law for inflation

The approval of the mortgage law was proposed to be delayed because a surge in inflation to nearly six per cent in October. The proposal was made by the Saudi Arabian Monetary Agency (SAMA), the Gulf Kingdom's central bank.
The study by the Saudi American Bank Group (SAMBA) showed consumer lending by the country's 12 commercial banks picked up in the first half of 2010, rising by almost 10 per cent over the corresponding period of 2009.

Property prices drive region’s Sukuk future

A rebound in Gulf Islamic bond market depends on the performance of the property prices.
Real estate prices in Dubai have tumbled more than 50 percent since their 2008 peak and 30 percent in neighboring Abu Dhabi as banks tightened mortgage lending and speculators fled the market.
The average yield on Sukuk sold by GCC issuers rose six basis points yesterday to 5.37 percent, paring its decline this quarter to 72 points.
Since Sept. 30 the difference between the average yield for emerging-market Sukuk and the London interbank offered rate widened 0.8 basis point to 336.6 yesterday and has narrowed 36 points.

Dubai’s Tamweel CEO resigns, firm to appoint new chair

The chief executive of Tamweel, Wasim Saifi, has resigned and the Islamic mortgage lender will appoint a new chairman having convened a new board.
Varun Sood, the current chief executive of Tamweel’s home finance division will act as the chief executive.

Islamic home financier Tamweel sees Q3 income fall

Tamweel reported a 28.6 per cent decline in third-quarter profits as income from its home financing activities dipped.
Dubai Islamic Bank's (DIB) purchase of a controlling 57.3 per cent stake in Tamweel in September, followed by the resumption of mortgage lending this month.
Now DIB plans to transfer most of its mortgage activities to Tamweel.
Tamweel shareholders are set to meet tomorrow to discuss appointing a new board and approving financial statements for 2008 and 2009. Sheikh Khaled, who sits on numerous company boards in the UAE, is planning to leave his position as Tamweel chairman to make room for DIB executives who will integrate its mortgage business with the bank's.

Dubai Islamic Bank mortgages go to Tamweel

Dubai Islamic Bank (DIB) will transfer most of its mortgage activity to Tamweel after taking a majority stake in the Islamic home finance company.
The move comes as the mortgage company resumes lending for the first time in two years.
Tamweel's board is going to meet tomorrow to discuss the appointment of new members and to approve financial statements for 2008 and last year.

New Saudi mortgage market should be sukuk-based, says expert

THE best Islamic Finance principle to base the much-awaited Saudi mortgage law should be sukuk-based with a Shariah-compliant set of guidelines, Giambattista Atzeni, vice president and MENA business manager for corporate trust and a member of the steering committee of the Gulf Bond and Sukuk Association at BNY Mellon Corporate Trust in Dubai told Arab News.
A shortage of housing and rising land costs, according to a report released this month by CB Ellis states that the prices of housing are rising.
The report also confirmed in Jeddah alone there is a shortage of 300,000 dwellings.
Currently the debate on when the law will finally be introduced has been shelved until after the holy month of Ramadan.
In a previous interview with Arab News, Muhammed Al-Ghamdi, secretary-general of the Shoura Council has said that some of its members needed more time to discuss the proposed mortgage law concerning the country’s economy and this is why it has been delayed.

Sakana says Islamic finance will survive real estate slump

R Lakshmanan, Chief Executive Officer of Sakana Holistic Housing Solutions, said that Islamic financial institutions (IFIs) providing mortgages for off-plan properties are significantly exposed to risks due to delayed delivery and cancellation of several real estate projects, because the IFI owns the asset.
In addition, the mortgage providers have also been affected to fall in property prices and increased defaults due to job losses. His presentation focused on Ijara Mawsofah fi Dhimah (Forward Lease) structure of financing which is used by the mortgage providers for off-plan properties.
Lakshmanan also said that due care should be taken while preparing legal documentation with particular emphasis on penalties due to delayed delivery as this may have a financial impact on the IFI’s operating results. In addition, the IFI should ensure robust credit risk/control. Lakshmanan concluded that adoption of better risk management practices will enable growth of Islamic finance.

Saudi needs 150,000 housing units a year: LaSalle

Saudi Arabia needs 150,000 housing units annually as demand for residential property is soaring, while a long-awaited mortgage law will not solve the top oil exporter's housing problem.
Saudi Arabia, the biggest Arab economy, is facing a massive housing problem due to rapid population growth and an inflow of expatriate workers coming to the kingdom rolling out a $400 billion infrastructure spending plan.
In addition, the country has only a small secondary real estate market, and land prices are higher than in other Gulf Arab states.
Rentals prices for residential housing units would keep rising by some 10 percent annually like in previous years. Saudi Arabia has been working for years on a mortgage law but Harris said the bill, if finally approved, would not solve the problem as there was not sufficient land available for sale and few experienced real estate developers operating.

Saudi Mortgage Law Could Spark $32 Billion of Lending a Year

After five years of searching for a mortgage in the Saudi Arabian capital, Riyadh, 28-year-old Abdulaziz Al Salem has some advice for his peers: Forget it.
Frustrated young Saudis like Al Salem could spark a lending market that Capitas Group International estimates at $32 billion a year for the next decade if the kingdom passes a mortgage law that’s been a decade in the making.
The proposed law is part of a planned overhaul of the kingdom’s home finance market, regulating all parts of the industry: from registering mortgages to allowing judges to prosecute police officers who refuse to carry out eviction orders. The changes are aimed at easing the concerns of lenders discouraged by unclear regulation that could lead to lengthy court disputes.
Saudi authorities began drafting the new property laws about a decade ago. Provisions about evictions and home foreclosures led to disagreements between the government and the Shura Council, delaying its passage for years.

Islamic lending has surprises in store

Customers who are eager to be Sharia compliant are flocking to Islamic banks. Yet as Islamic lending boasts that it charges no interest, crunching the numbers churns out something of a surprise. Some Islamic mortgages charge more than already high interest-based traditional mortgages. You could even argue that an Islamic mortgage is, in some cases, so expensive it is akin to usury. And the terms are often less favourable.
Take the current murabaha rates in Syria and Lebanon. Murabaha is an Islamic equivalent to a mortgage or car loan. Instead of lending the customer money and charging interest, the bank purchases the asset and resells it for a profit to the customer. This profit is the murabaha rate.
Unlike, say, in the UK, there are no regulatory laws in Syria that require Islamic banks to quote their product in a way that is equivalent to an interest-based traditional mortgage to allow comparison shopping. The only way the average customer can convert murabaha to interest-based is with the help of a financial calculator and a professional.

Local Banks Capturing African Market

Africa’s reputation as a viable and profitable investment destination has grown in leaps and bounds and, importantly, its population presents a new market for many products and services.
Although it is sometimes narrow minded and naïve to consider the African economy as one entity or one whole, it can also be useful to consider the continent as an evolving organism, with many lessons learnt in one country, providing useful information for evaluating and doing business in another country. The ability to learn these lessons and adapt new strategies to new markets has been one of the greatest strengths of the major South African Banks in expanding their operations into other African countries.
Africa’s growth prospects are very positive. With the exception of 2009, the African economy has grown at about 5% or more every year for the last decade.

Islamic Bank of Britain signs up AMPD

Islamic Bank of Britain has joined forces with the Alliance of Mortgage Packagers and Distributors (AMPD) to offer the full range of its Sharia-compliant mortgages. IBB’s Home Purchase Plan (HPP) allows those consumers seeking a mortgage, home finance without the use of interest.
Islamic Bank of Britain’s Home Purchase Plan (HPP) will give AMPD’s members an alternative mortgage product which is transparent and easy to use, competitive enough to square up to conventional mortgages and has the leading edge of being an ethical product.

Islamic banking in GCC seen growing around 20% annually

Over the years, Islamic banking in the Gulf Co-operation Council region has witnessed remarkable growth and seen tremendous demand for its products and services, the report said. The share of Islamic banking sector continues to increase, accounting for around 16.6% of the total assets of the region’s banking system as of end-March 2010.
In order to meet the growing needs of Shariah-compliant financing in the region, most conventional banks have either opened a new subsidiary or introduced an Islamic window within the existing infrastructure, according to KFH.
In terms of financing, opportunities for Islamic banks in the GCC include residential mortgages, underpinned by a high level of demand for home mortgages within the local market.

[German] - Steuerliche Wuerdigung islamischer Vertragsmodelle - Neuerscheinung im Bankverlag

Steuerliche Würdigung im nationalen und internationalen Kontext

Der Markt Islamic Finance wächst rasant und umfasst bereits heute ein erhebliches Anlagevolumen. Demgegenüber besteht ein großer Kapitalbedarf in der europäischen, speziell auch in der deutschen Realwirtschaft ebenso wie ein Bedarf an Investoren.

Bei der Umsetzung von Islamic-Finance-Vertragsmodellen kann die Besteuerung im Einzelfall eine ausschlaggebende Rolle spielen. Daher erläutert die Autorin in diesem Buch für ausgewählte schariakonforme Finanzierungs- und Anlageformen zunächst die Scharia-Rahmenbedingungen der jeweiligen Vertragsmodelle aus deutscher rechtlicher, ertragsteuerlicher und verkehrsteuerlicher Sicht. Die steuerlichen Fragestellungen werden anhand von Beispielen im grenzüberschreitenden Corporate Bereich im Schnittpunkt von deutschem internationalem Steuerrecht und ausländischem Steuerrecht der weiteren beteiligen Staaten verdeutlicht.


* Einleitung
* Grundzüge von Islamic-Finance-Vertragsmodellen
- eigenkapitalbasierte („Musharaka“ und „Mudaraba“),
- fremdkapitalbasierte („Murabaha“ und „Tawarruq“) sowie

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