Qatar and Saudi Arabia are expected to experience higher growth than other markets due to increased economic activity, and demand is also expected to expand in Oman, as three Islamic banks have recently been licensed to operate in the sultanate.
Islamic mortgage financing has developed quite quickly in the region during the last few years , especially when compared with conventional mortgage providers with companies such as Deutsche Housing Finance, Sakana Holistic Housing Solutions and Saudi Home Loans Company coming to the fore. Islamic mortgages are also becoming easier to understand and far more acceptable.
Banking experts feel the demand falls into three separate categories: some customers will go for Islamic financing due to their religious convictions, while others may have religious beliefs but don't feel Islamic financing is particularly different from conventional financing, and the third group may have few religious beliefs but find Islamic financing an attractive proposition in comparison to other more conventional banking products.
In fact many Islamic mortgage providers are attracting customers from all religions due to the value offered by their products, and many GCC countries have large populations of non-Muslims. Another factor involved in the growth of Islamic mortgages is the advent of freehold property, which was a new concept until the early when emerging markets like Dubai, Bahrain, Oman and Qatar brought it forth.
Before this time ownership was restricted to nationals with mortgage financing being provided primarily through state run housing banks.