Transcript Mr. Raharjo Adisusanto, President Director, SMF, Indonesia
MORTGAGE MARKET IN INDONESIA
INTERNATIONAL CONFERENCE ON “HOUSING: AN ENGINE FOR INCLUSIVE GROWTH” NEW DELHI, APRIL 11-13, 2013
PREPARED BY:
PT. SARANA MULTIGRIYA FINANSIAL (Persero) INDONESIA
0
AGENDA
ECONOMIC OUTLOOK
PRIMARY MORTGAGE MARKET IN INDONESIA
SECONDARY MORTGAGE MARKET IN INDONESIA
CONCLUSION
1
ECONOMIC OUTLOOK
2
POPULATION DEMOGRAPHIC
China 1,3 Bio India 1,2 Bio US 313 Mio Indonesia 257 Mio
Population Pyramid 6% Population Distribution 7% 2% 7% 21%
Sumatera Java Kalimantan Sulawesi Papua Others
57%
Source : BPS (Biro Pusat Statistik) ( www.bps.go.id
), 2010, seconday data, 2012)
Indonesia has the 4 th biggest population in the world with many of its people are still on their productive ages, most people lives in Java island ECONOMIC OUTLOOK 3
GDP GROWTH & POPULATION
7,00% 6,00% 5,00% 4,00% 3,00% 2,00% 1,00% 0,00% 6,00% 2008 4,60% 6,10% 2009 Population 2010 6,50% 2011 GDP 6,23% 250 245 240 235 230 225 220 2012
Source : BPS (Biro Pusat Statistik) 2012 ( www.bps.go.id
) Estimation :1,49% population growth/year
In general the GDP growth for the last five years is above 6%, only in 2009 relatively declined at 4.6% due to the global economic crisis.
ECONOMIC OUTLOOK 4
MORTGAGE BASE LENDING RATE, BI RATE, & INFLATION
12,00%
10,91% 10,85% 10,73% 10,85% 10,80% 10,71% 10,68% 10,67% 10,65% 10,65% 10,65% 10,65% 10,63%
10,00% 8,00% 6,00%
6,00% 6,00% 5,75% 5,75% 5,75% 5,75% 5,75% 5,75% 5,75% 5,75% 5,75% 5,75% 5,75%
4,00%
3,79% 3,65% 3,56% 3,97% 4,50% 4,45% 4,53% 4,56% 4,58% 4,31% 4,61% 4,32% 4,30%
2,00% 0,00% дек.11
янв.12
фев.12
мар.12
апр.12
май.12
Mortgage Base Lending Rate июн.12
июл.12
BI Rate авг.12
сен.12
Inflation окт.12
ноя.12
дек.12
Source : Bank Indonesia ‘Des 2012 (www.bi.go.id)
In the beginning of 2012, Indonesia economy has become more stable, as shown on the inflation rate trend. Considering the economy condition, Bank Indonesia has decided to maintain BI Rate at 5,75%. Mortgage base lending rate, which uses BI rate as its benchmark, also remains stable. ECONOMIC OUTLOOK 5
PRIMARY MORTGAGE MARKET IN INDONESIA
6
MORTGAGE TO GDP RATIO
Countries Mortgage to GDP Ratio Comparison Per January 2012 85,0% 1,0% 2,6% 4,0% 4,5% 6,1% 9,0% 24,9% 31,0% 31,2% 37,0% 57,9% Indonesia Mortgage to GDP Ratio
3,0% 2,5% 2,0% 1,5% 1,2% 1,3% 1,7% 1,8% 2,0% 2,0% 2,1% 2,2% 2,46% 2,70% 1,0% 0,8% 0,7% 0,5% 0,0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Mortgage to GDP ratio of Indonesia at the end of 2011 which is around 2.6% is still below many other countries. In 2012, Indonesia mortgage to GDP ratio has already increased to 2,70%.
Source : SMF Research ‘January 2012, Bank Indonesia
PRIMARY MORTGAGE MARKET IN INDONESIA 7
HOUSING DEMAND
No. Of Indonesian citizen Population growth 257 milion 1.49% per year Needs for housing
800,000 per year
Estimation National demand position (*) Estimation time to address Needs for housing 15 milion 20 years
750,000 per year
Total housing demand: 1,550,000 per year
(*) SMF estimate for 2012
PRIMARY MORTGAGE MARKET IN INDONESIA 8
HOUSING SALES, CONSTRUCTION LOAN & RESIDENTIAL PROPERTY PRICE INDEX
House Sales
300 250 200 150 20 15 100 50 0 200 1 200 2 200 3 200 4 Volume (Thousand Units) 106,5 121,3 134,5 150,6 Value (IDR Trillion) 4,04 7,13 8,16 11,45 200 5 169 16,2 200 6 200 7 200 8 200 9 201 0 201 1 163,6 191,7 231,4 173,4 212,3 242,3 17,56 23 29,37 25,93 31,08 37,96 0 10 5 40 35 30 25
Construction Loans
120 000 140 135 130 125 120 165 160 155 150 145 100 000 80 000 60 000 40 000
33 088
20 000
44 088 58 753 64 225 63 500 75 395 Residential Property Price Index Small 95 921 Medium Large 162,04 152,64 143,23
0 2006 2007 2008 2009 2010 2011 2012 House sales has been experiencing strong growth since significant drop in 2009. Total house sales for 2011 is 242,000 units, this number also shows the growth in new constructed houses. On the other hand, construction loan at the end of 2012 has reached 95.921 billion IDR. The residential property price also increase from time to time.
PRIMARY MORTGAGE MARKET IN INDONESIA
Source : BI, Ministry of Housing, REI, APERSI, Spire estimation & Analysis
9
SUPPLY AND DEMAND
The gap between supply and demand of houses remains big .
1.
The total demand of 1.55 million units from: Current Indonesia’s Housing demand position over 15 million units, requiring approx. 750,000 units per year to be built in 20 year, Housing needs from population growth is recorded at 800,000 units per year 2.
Supply of New Housing Construction of approx. 240,000 units in 2011 but still almost always below housing demand .
The big gap shows an opportunity for supply of new houses construction.
PRIMARY MORTGAGE MARKET IN INDONESIA 10
OUTSTANDING MORTGAGE PORTFOLIO & MORTGAGE TO TOTAL BANK LOANS RATIO
250 200
Outstanding Mortgage Portofolio 183
150
108 124 141
100
84 65 46
50
12 11 21 31
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
222 Mortgage to Total Bank Loans Ratio
9,00% 8,00% 7,00% 6,00%
7,69% 7,78% 7,72% 7,96% 8,30% 8,01% 8,21% 6,63%
5,00% 4,00% 3,00% 2,00%
3,83% 2,91% 4,76% 5,46%
1,00% 0,00% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source : Bank Indonesia, Dec 2012
Mortgage portfolio in Indonesia has grown rapidly for the last couple of years. At the end of 2012, outstanding mortgage portfolio is 222 trillion IDR. On the other hand, mortgage to total bank loans is still below 10% until at the end of 2012 PRIMARY MORTGAGE MARKET IN INDONESIA 11
MORTGAGE MARKET SHARE
5,62% 0,95% 0,34% 46,77% 46,32%
State Owned Banks Private National Banks Regional Government Banks Foreign Bank & Joint Banks Rural Banks
Source: The Indonesian Banking Statistics (SPI), Bank Indonesia (Central Bank of Indonesia), Dec 2012
More than 90% of mortgages are originated by 10 banks as major players until ‘Dec 2012 PRIMARY MORTGAGE MARKET IN INDONESIA 12
HOME OWNERSHIP PAYMENT METHOD
11,33% 8,67% 80,00%
Mortgage Loan Cash Instalment Hard Cash
Source : Bank Indonesia, Quarter IV 2012
80% of people who bought their houses in 2012 has used mortgage loan as their source of fund PRIMARY MORTGAGE MARKET IN INDONESIA 13
MORTGAGE LOAN TYPES
13,16%
86,84%
12,65%
87,35%
0,76% 99,24% 1,09% 98,91%
Mortgage Loan (Commercial) Mortgage Subsidies (FLPP)
Q1-2012 Q2-2012 Q3-2012 Q4-2012
In Indonesia, more than 86% mortgages are using mortgage loan (commercial), and the remaining 13% use the subsidized mortgages. PRIMARY MORTGAGE MARKET IN INDONESIA 14
SECONDARY MORTGAGE MARKET IN INDONESIA
15
BACKGROUND OF DEVELOPMENT OF SECONDARY MORTGAGE MARKET IN INDONESIA
• • • • The government program: to provide decent & affordable houses for every Indonesia family.
It required the availability of housing development funds that more effectively and efficiently with sufficient mortgage volumes, sustainable and affordable, seen from accessibility to obtain house and affordable interest rates.
Mortgage is long term financing, so that required long-term funding from the capital markets to avoid maturity mismatch.
Therefore, the government established PT Sarana Multigriya Finansial (Persero) / “SMF”, that served to facilitate funds flow from capital market to the housing finance sector with securitization and liquidity facility 16
ROAD MAP
2005 Facilitator To Build
and develop secondary mortgage market.
2018 Catalysator To Develop
secondary mortgage market
Liquidity Facility Securitization
Securitization & Guarantor (Mortgage & RMBS) Housing Finance Information System / HFIS
Liquidity Facility Securitization Liquidity Facility Securitization Securitization-Guarantee HFIS Securitization-Guarantee HFIS 17
THE COMPANY’S PROGRAMS
Securitization Program
provide a mechanism of sales of mortgage loans and issue of mortgage backed securities.
Liquidity Facility Program
provide medium to long term loans for mortgage lenders.
Guarantee Program
provide guarantee for obligation / mortgage backed securities issued by mortgage lenders.
Support Programs
- Provide a guidence and mortgage document standard - Education and training programs - Socialization (workshop, seminar, product introductions) DEVELOPMENT OF SECONDARY MORTGAGE MARKET IN INDONESIA 18
SECONDARY MORTGAGE MARKET GROWTH
6 000 5 000
5 555
4 000
3 303
3 000
2 955
2 000
2 049 1 954 1 347 1 252
1 000
502
0 2005
0
2006 2007 2008 Securitization 2009 Lending 2010 2011 2012 Secondary mortgage market in Indonesia is conducted through securitization transaction and liquidity facility provided by SMF DEVELOPMENT OF SECONDARY MORTGAGE MARKET IN INDONESIA 19
RMBS SUPPORTED BY SMF
Ring-fencing
Bankruptcy Remoteness
Credit Enhancement
Subordination (Junior Class)
Reserve Account
Servicer transition fund
Assets Quality
32 Selection Criteria
PRIME RMBS idAAA Payment Seniority
Principal payment will be pass through to RMBS class A (Senior Class)
Any lost will hit RMBS class B first
Mortgage loans use as the underlying of RMBS issuance are selected to make sure its quality. The transaction structure also ensure that investment on senior class will be very secure through ring fencing, payment seniority and credit enhancement.
DEVELOPMENT OF SECONDARY MORTGAGE MARKET IN INDONESIA 20
RMBS ISSUANCE
RMBS
I II III IV V
Issuance Date Weighted Average Remaining Time to Total Issuance RMBS Coupon Maturity (Years) (Billion Rp) Class-A Class A Rating on Issuance Current Rating
11/02/2009 10/11/2009 27/12/2010 17/11/2011 13/12/2012 5.30
5.63
5.35
5.94
6.35
111 391 750 703 1.000
13% 11% 9.25% 8.75% 7.75% idAAA idAAA idAAA idAAA idAAA idAAA idAAA idAAA idAAA idAAA RMBS that has been issued and supported by SMF are rated AAA at issuance date and their current rating are also AAA. The AAA rating shows the quality of the mortgage portfolio that underlying the transaction.
DEVELOPMENT OF SECONDARY MORTGAGE MARKET IN INDONESIA 21
RMBS HOLDERS
Current Position (Dec ‘12)
13,00% 3,30%
RMBS I
31,69% 52,01% Pension Fund Financial Institution Banks Private Companies 7,26%
RMBS III
0,73% 0,29% 5,34% 47,20% 39,18%
RMBS II
5,76% 0,76% 21,67% 71,82% Mutual Fund Pension Fund Financial Institution Foundation
RMBS IV
11,63% 1,55% 23,26% 32,56% 31,01% Financial Institution Government Institution Banks Pension Fund Foundation Banks Pension Fund Foreign Institution Financial Institution Foundation Insurance 12,57% 5,73% 1,08%
RMBS V
20,00% 60,62% Pension Fund Insurance Financial Institution Foundation Banks Variety of investors continues to invest in Residential Mortgage Backed Securities (RMBS) DEVELOPMENT OF SECONDARY MORTGAGE MARKET IN INDONESIA 22
SMF BOND HOLDERS
Institution Foreign 1,87% Individual 1,56% Mutual Fund 5,80% Incorporated Company 12,23% Mutual Fund More Than 5 Years 1,31% Foundation 0,75% Insurance 38,23% Pension Fund 12,31% Domestic Banks 25,95%
Source: Indonesia Central Secuities Depository (KSEI), Desember 2012
56% of bonds that has been issued by SMF is hold by pension fund and insurance companies DEVELOPMENT OF SECONDARY MORTGAGE MARKET IN INDONESIA 23
CONCLUSION
1.
Indonesia’s economy continues to grow despite the global economy slowdown. Based on gross domestic product (GDP) growth, Indonesia’s economy grew 6,23% (yoy) in 2012. Since Inflation rate has been stable until December 2012 (4,30% yoy), Bank Indonesia decided to maintain the BI rate at 5,75%.
The government of Indonesia also realize that it is important to maintain macroeconomic stability, sustainable economic growth & political stability.
2.
As the population grows, the needs for housing continue to rise and considering today national housing backlog as much as 15 millions units, 1,55 millions unit new houses should be built every year. It is critical for Indonesia to build a robust housing finance system to fulfill that needs.
3.
Through strengthening the primary mortgage market and developing secondary mortgage market, availability of sustainable medium to long term fund will eventually increase affordability.
4.
To develop the secondary mortgage market and to build investor confidence to invest in RMBS, SMF only facilitate prime RMBS with the highest rating.
5.
The existance of secondary mortgage market is crucial to provide long term fund for mortgage lenders. To build and develop secondary mortgage market, it requires government and stake holders supports.
24
HOUSING FINANCE IN INDONESIA
25
Mechanism kanisme Transaksi Pembiayaan Sekunder Perumahan
SEKURITISASI HAK TAGIH KPR EBA PERUMAHAN
PENYALUR KPR
PEMBIAYAAN OBLIGASI
PASAR MODAL
AGUNAN KPR DANA OBLIGASI
PERAN SMF:
PENERBIT EBA (dalam proses)
PENATA SEKURITISASI,
PENDUKUNG KREDIT,
INVESTOR INVESTOR
DEVELOPER 26