Fractional property investor DomaCom and Islamic wealth firm Crescent Group have entered a partnership to offer a new home finance product aimed at 700,000 Muslim Australians.

DomaCom and Crescent Group have entered exclusive heads of agreement with a target launch period set for the third quarter of 2021.

"[The two firms] have been working on a model which enables Australian Muslims to purchase a property with leverage using Islamic finance while maintaining the familiar structure of a traditional home purchase," DomaCom said in ASX filings.

The firms said 771,000 Australians are estimated to be Muslim in 2020, citing the Global Islamic Economy Report 2020.

Of this, 95% say Islam is either very important or important to their identity. About half of Australia's total Muslim population (386,000) is 24 years or older.

Australia's Muslim population is highly educated with 78% at least holding graduate degrees, compared to 30% for the broader population.

However, the rate of home ownership in the cohort is lower than the broader population (15% vs. 66%)

The report estimates the Shariah-compliant mortgage finance market stands at $192 billion, making it an opportunity for $4 billion in average gross fund management fee calculated at 200 bps.

"For several years, we have been working on a new option for our product that will deliver a solution to this growing market. We are very pleased to find a partner of the calibre and remarkable track record of Crescent Group to help us deliver this product to the Australian Muslim community," DomaCom chief executive Arthur Naoumidis said.

Crescent will lead the Shariah certification of the product, source institutional funding via its global Islamic network and the distribution.

"We are excited to partner with DomaCom to deliver a globally unique solution, that is authentic, compelling and competitive," Crescent Group chief executive Talal Yassine said.

"In addition to a deep understanding of the Australian Islamic community, Crescent Group will help DomaCom to obtain the highest levels of Shariah certification of our products as well as sourcing the required institutional funding."