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AGENDA ECONOMIC OUTLOOK PRIMARY MORTGAGE MARKET IN INDONESIA

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Presentation on theme: "AGENDA ECONOMIC OUTLOOK PRIMARY MORTGAGE MARKET IN INDONESIA"— Presentation transcript:

0 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

1 AGENDA ECONOMIC OUTLOOK PRIMARY MORTGAGE MARKET IN INDONESIA
SECONDARY MORTGAGE MARKET IN INDONESIA CONCLUSION Macroeconomic (economic growth, suku bunga, inflasi) pertumbuhan masyarakat menengah Indonesia Housing Finance market (mortg to GDP, potensi, player (dominan perbankan), supply and demand  backlog) Housing finance system (tidak leterlux) Development of SMM .... History background, roadmap SMF, penerbitan EBA (investor), dukungan regulasi

2 ECONOMIC OUTLOOK

3 POPULATION DEMOGRAPHIC
China 1,3 Bio India 1,2 Bio US 313 Mio Indonesia 257 Mio Population Pyramid Source : BPS (Biro Pusat Statistik) (www.bps.go.id), 2010, seconday data, 2012) Indonesia has the 4th biggest population in the world with many of its people are still on their productive ages, most people lives in Java island

4 GDP GROWTH & POPULATION
Source : BPS (Biro Pusat Statistik) 2012 (www.bps.go.id) Estimation :1,49% population growth/year 4th biggest population in the world Struktur demografi penduduk Indonesia based on umur 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.

5 MORTGAGE BASE LENDING RATE, BI RATE, & INFLATION
Population  potensial demand ID economi become stabil by the end 2011 onward Keberagaman n Kebebasan demokrasi di indonesia – tidak ada goncangan politik 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.

6 PRIMARY MORTGAGE MARKET IN INDONESIA

7 MORTGAGE TO GDP RATIO Countries Mortgage to GDP Ratio Comparison
Per January 2012 Indonesia Mortgage to GDP Ratio 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

8 HOUSING DEMAND Total housing demand: 1,550,000 per year
No. Of Indonesian citizen Population growth Needs for housing 257 milion 1.49% per year 800,000 per year Estimation National demand position (*) Estimation time to address 15 milion 20 years 750,000 per year Total housing demand: 1,550,000 per year (*) SMF estimate for 2012

9 HOUSING SALES, CONSTRUCTION LOAN & RESIDENTIAL PROPERTY PRICE INDEX
House sales has been experiencing strong growth since significant drop in 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 billion IDR. The residential property price also increase from time to time. Source : BI, Ministry of Housing, REI, APERSI, Spire estimation & Analysis

10 SUPPLY AND DEMAND The gap between supply and demand of houses remains big . 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 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.

11 OUTSTANDING MORTGAGE PORTFOLIO & MORTGAGE TO TOTAL BANK LOANS RATIO
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

12 MORTGAGE MARKET SHARE Switch dengan bawahnta 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

13 HOME OWNERSHIP PAYMENT METHOD
Source : Bank Indonesia, Quarter IV 2012 80% of people who bought their houses in 2012 has used mortgage loan as their source of fund

14 MORTGAGE LOAN TYPES In Indonesia, more than 86% mortgages are using mortgage loan (commercial), and the remaining 13% use the subsidized mortgages.

15 SECONDARY MORTGAGE MARKET IN INDONESIA

16 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

17 ROAD MAP 2005 2018 Catalysator Facilitator
To Develop secondary mortgage market Facilitator To Build and 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 Kegiatan usaha yang dilakukan SMF berjalan sesuai dengan evolusi peran seperti tergambar di dalam slide. TAHAP PERSIAPAN mengembangkan model-model transaksi untuk membangun pasar pembiayaan sekunder perumahan. TAHAPAN FASILITATOR Saat ini model transaksi penyaluran pinjaman dalam bentuk REFINANCING PROGRAM telah dilaksanakan dengan beberapa lembaga penyalur KPR yang berbentuk bank umum, bank pembangunan daerah dan perusahaan multifinance. Kami mengedepankan proses REFINANCING, yang berarti lembaga penyalur KPR harus terlebih dahulu membukukan KPRnya. Selanjutnya apabila proses yang dilaksanakan sesuai standar SMF maka SMF akan melakukan pembiayaan kembali atas portfolio KPR tersebut. Dengan dana yang diterima lembaga penyalur KPR dapat mulai melakukan originasi yang baru. Model transaksi yang lainnya adalah sekuritisasi portfolio KPR yang saat ini masih menggunakan struktur transaksi KIK EBA sesuai ketentuan Bapepam LK, yang transaksi perdananya telah kami catatkan di Bursa Efek Indonesia pada tanggal 12 Februari yang lalu. Dalam tahapan ini SMF berperan lebih banyak sebagai fasilitator yang menjembatani antara pelaku dan regulator untuk dapat memastikan bahwa model-model transaksi tersebut dapat dilaksanakan sesuai regulasi yang berlaku dan dapat diterima oleh pelaku pasar pada umumnya. TAHAPAN KATALISATOR Tahapan berikutnya SMF akan bertindak sebagai market catalyst, yang tidak langsung melakukan transaksi tetapi mengeluarkan produk guarantee program yang akan meningkatkan credit worthiness dari efek-efek yang berkaitan dengan KPR yang diterbitkan oleh lembaga penyalur KPR atau efek-efek yang distruktur berdasarkan portfolio KPR dari lembaga penyalur KPR. Pada tahapan ini, SMF akan lebih berperan untuk mengembangkan pasar pembiayaan sekunder dengan melakukan R&D untuk menyediakan model-model transaksi ataupun efek baru lainnya yang dibutuhkan pasar. 17

18 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)

19 SECONDARY MORTGAGE MARKET GROWTH
Secondary mortgage market in Indonesia is conducted through securitization transaction and liquidity facility provided by SMF

20 RMBS SUPPORTED BY SMF PRIME RMBS idAAA Ring-fencing Credit Enhancement
Bankruptcy Remoteness Credit Enhancement Subordination (Junior Class) Reserve Account Servicer transition fund PRIME RMBS idAAA Assets Quality 32 Selection Criteria Payment Seniority Principal payment will be pass through to RMBS class A (Senior Class) Any lost will hit RMBS class B first KPR diseleksi secara ketat Memperoleh rating terbaik (AAA) Mencapai true sale Dimulai dengan struktur yang sederhana 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.

21 Remaining Time to Maturity
RMBS ISSUANCE RMBS Issuance Date Weighted Average Remaining Time to Maturity (Years) Total Issuance (Billion Rp) RMBS Coupon Class-A Class A Rating on Issuance Current Rating I 11/02/2009 5.30 111 13% idAAA II 10/11/2009 5.63 391 11% III 27/12/2010 5.35 750 9.25% IV 17/11/2011 5.94 703 8.75% V 13/12/2012 6.35 1.000 7.75% Performance RMBS Maturity date 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.

22 RMBS HOLDERS Current Position (Dec ‘12)
Variety of investors continues to invest in Residential Mortgage Backed Securities (RMBS)

23 SMF BOND HOLDERS 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

24 CONCLUSION 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 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. 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. Through strengthening the primary mortgage market and developing secondary mortgage market, availability of sustainable medium to long term fund will eventually increase affordability. To develop the secondary mortgage market and to build investor confidence to invest in RMBS, SMF only facilitate prime RMBS with the highest rating. 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.

25 HOUSING FINANCE IN INDONESIA
THANK YOU PT SARANA MULTIGRIYA FINANSIAL (PERSERO) Grha SMF Jl. Panglima Polim I No. 1, Jakarta 12160, Indonesia

26 Mechanism kanisme Transaksi Pembiayaan Sekunder Perumahan
HAK TAGIH KPR EBA SEKURITISASI PRODUKSI KPR PASAR SEKUNDER PENYALUR KPR PASAR MODAL INVESTOR PEMBIAYAAN OBLIGASI AGUNAN KPR DANA OBLIGASI PERAN SMF: PENERBIT EBA (dalam proses) PENATA SEKURITISASI, PENDUKUNG KREDIT, INVESTOR DEVELOPER DANA HASIL PENJUALAN EBA PERUMAHAN


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