HOUSING FINANCE SYSTEM AND HOUSING FINANCE SUBSIDY A Case Study of Indonesia
ISKANDAR SALEH
INDONESIA BANKING SCHOOL Jakarta, 7 November 2016
Decreased to globlal crisis, Only few countries in positive growth
INCOME PERCAPITA ( x000 USD) 3,010
3,540 3,751 3,669 3,531 3,362
2010 2011 2012 2013 2014 2015 Source : BPS
DRIVERS OF GROWTH
KEY VARIABLES GDP (USD Billion) GDP Growth (%)
2009
2010
2012
2013
2014
2015
510,2 539,4 706,6 846,8
878,0
890,4
861,9
5.8
5.0
4.8
4.5
6.0
2011 6.4
6.2
GDP per Capita
2,345 3,010 3,540 3,751
3,669
3,531
3,362
Inflation (%)
4,90
6,96
4,61
4,30
8,08
8,36
3,35
BI Rate (%)
6,50
6,50
6,50
6,00
7,25
7,75
7,50
Except over the period 1998 – 1999, GDP growth allows for credit expansion
Increased in GDP per Capita (2013) has moved Indonesia up to Middle-Income Country As inflation decreasing in 2015, the country expects higher credit growth in 2015-2016. Source : BPS
Years 1998 – 1999 2000 – 2004 2005 – 2009 2010 – 2015
Avg. Growth Rate (%) -6.65 4.60 5.64 5.70
Housing Finance in Indonesia Mortgage Market Size as % GDP
Total Housing Backlogs 2015
11,3 JUTA UNIT
Housing Backlogs
Sumber: Bank Indonesia, Kemenpera, HDFC, Hofinet, SMF Research 2013
Source : ppdpp.id
100% % of household
80%
8.000 6.000
60%
4.000
40% 2.000
20% 0%
1990
2000
2010
2015
0
5K-10K USD < 5K USD 10K-15K USD >15K USD Average household disposable Income (RHS) Source : CEIC, UBS Research
Annual household disposable Income (USD)
Rising middle class
GOVERNMENT HOUSING FINANCE POLICIES AND PROGRAMS POLICIES:
1) Affordability Make the PMT affordable; 2) Accesability Provide better credit access 3) Availability Promote the Supply of Mortgage thru Special Circuit in Housing Finance 4) Sustainability Integrating Housing Finance to Capital Market thru Secondary Mortgage Facility
PROGRAMS: 1) Interest Rate Subsidy: Provide Liquidity to Partly Finance the Required Mortgage Principal; and Provide Subsidy to Interest Differential between Market Rate and Subsidized Rate 2) Down Payment Subsidy: Reduce the Principal to be Repaid by the Target Group
Mortgage (Rp.) Down Payment Down Payment Subsidy
PMT@5,0%
PMT FLPP
2
4
6
8
10
12
14
16
Repayment Period (Years) Figure FLPP Mortgage and Down Payment Subsidy
18
20
Mortgage (Rp.) Down Payment Down Payment Subsidy
BI Rate + 5%
PMT Market Rate
[email protected]%
PMT IRS
2
4
6
8
10
12
14
16
18
20
Repayment Period (Years) Figure
Interest Rate Subsidy Mortgage and Down Payment Subsidy
A MILLION HOUSING PROGRAM
Housing Finance Programs 2015 - 2019 JENIS BANTUAN PEMBIAYAAN PERUMAHAN
SATUAN
1. Bantuan Uang Muka bagi MBR* - Jumlah rumah tangga yang mendapatkan Bantuan Rumah Tangga Uang Muka (BUM)
2015
Renstra
DIPA
TARGET DAN ANGGARAN 2016 Pagu 2017 Renstra Anggaran
2018
2019
TOTAL
55,000
55,000
106,500
337,839
124,250
124,370
65,880
476,000
220,000
220,000
479,250
1,351,000
621,250
684,035
395,280
2,399,815
- Jumlah rumah tangga yang mendapatkan bantuan Rumah Tangga pembiayaan perumahan KPR sejahtera tapak
130,000
65,625
150,000
89,186
175,000
173,500
91,500
720,000
- Jumlah rumah tangga yang mendapatkan bantuan Rumah Tangga pembiayaan perumahan KPR sarusun
-
25,000
50,000
75,000
26,500
176,500
- Jumlah rumah tangga yang mendapatkan bantuan Rumah Tangga pembiayaan perumahan KPR sewa beli sarusun
-
-
-
1,500
2,000
3,500
- Jumlah unit rumah yang mendapatkan fasilitas bantuan pembiayaan Kredit Konstruksi
-
1,000
1,500
2,000
1,500
6,000
-
50,000
150,000
200,000
50,000
450,000
Rupiah
Anggaran ( x Rp 1 jt) 2. Bantuan Pembiayaan Perumahan (KPR-FLPP) bagi MBR
Unit Rumah
- Jumlah rumah tangga yang mendapatkan bantuan Rumah Tangga pembiayaan perumahan KPR Swadaya Rupiah
Anggaran ( x Rp 1 jt)
10,115,391
5,106,330
25,070,893
9,227,000
42,738,884
58,136,629
ANGGARAN SUBSIDI BANTUAN UANG MUKA (BA 033.08/ BA 999.07)
220,000
220,000
479,250
1,351,000
621,250
684,035
ANGGARAN FLPP (BA 999.03)
10,115,391
25,070,893
9,227,000
42,738,884
58,136,629
26,030,835 162,092,632
TOTAL ANGGARAN SUBSIDI DAN FLPP (BA 999.03 DAN 999.07)
10,335,391
25,550,143
10,578,000
43,360,134
58,820,664
26,426,115 164,492,447
5,106,330
5,326,330
26,030,835 162,092,632
395,280
Catatan: * ) TA. 2015 dibiayai melalui bansos (BA 033), mulai TA. 2016 dialokasikan melalui BA. 999.07. BA BUN 999.07 selain untuk BUM juga dialokasikan untuk Subsidi Selisih Bunga (SSB). Pada TA. 2016 telah diusulkan untuk pembayaran SSB tahun kedua yang diterbitkan TA. 2015 sebesar Rp. 1,718 Miliar untuk sebanyak 199,052 unit dan pembiayaan SSB tahun pertama sebesar Rp. 900 Miliar untuk 386,644 unit.
2,399,815
HOUSING FINANCE PROGRAM 2016
Catatan: Pagu tersebut berdasarkan pagu Nota Keuangan.
CURRENT HOUSING FINANCE SYSTEM AND HOUSING FINANCE SUBSIDIES IN INDONESIA ●
Level Playing Field
●
Bolstering HFS with LF Increasing Participation of Primary Mortgage Lenders Integrating HFS to CM Establishing Housing Provident Fund (Tapera)
● ● ●
● ● ● ● ● ●
Liquidity Facility on Budget (Financing) Subsidy toward People Revive and Develop Subsidy for Micro HF Reactivate Subsidy for DP Suspend Subsidy for Construction Credit Interest Rate Subsidy on Budget (Spending)
2015 - Current
HOUSING FINANCE SYSTEM DEVELOPMENT Establishing the Liquidity Facility for mortgage origination to invite more market participants and promote risk-based mortgages subsidized mortgages business, resulting in: Promoting Level Playing Field Re-establshing Special Circuit in HFS Integrating Primary Mortgage Market with Capital Market thru further establishing the SMF Elaborating Housing Provident Fund to HFS
HOUSING FINANCE SUBSIDIES Housing Finance Subsidy is intended to broaden banks participation in serving down market, by: Inviting partipating banks to originate affordable mortgage (5%/year) in which the required principal comes partly from the banks and mostly from the government (10% vs 90%) Promoting housing affordability thru interest rate subsidy over the mortgages term; target group pays subsidized mortgage with rates much lower than market rates (12% vs 5%) Government pays the difference Provide down payment subsidy to make mortgage accesible by the target group.
DEVELOPERS
INFORMAL FINANCE INSTITUTIONS
DEVELOPERS
INSTITUTIONAL INVESTORS
• BANK BTN • OTHER BANKS
Cash
• PENSION FUNDS • INSURANCE COMPANIES
Bonds
Cash
Cash
Bonds
Bonds
Mortgage Assets Cash
HOUSING FINANCE SYSTEM
PT. SARANA MULTIGRYA FINANSIAL (SMF)
CAPITAL MARKET • RMBS (EBA-SP) • BONDS
Deposits & Loan Repayments
Cash
Pension & Interest
Bonds
PARTICIPATING BANKS
Taxes
Commercial Loans
EMPLOYERS
BLU PPDPP Special Circuit
COMMERCIAL BANKS
Mortgage Assets Cash
Commercial Loans
Savings and Loan Repayments
Wages
GOVERNMENT
• HIGH INCOME GROUP • MEDIUM INCOME GROUP • LOW INCOME GROUP
Savings & Insurance Premium
Subsidized Housing Loans
Commercial Loans
Savings and Loan Repayments
Loans
• MEDIUM UNIT • LUXURY UNIT
HOUSEHOLDS
Taxes
Savings & Loan Repayments
Loan Repayments
Construction Loans
• RIT • RSH
THE IMPACTS OF GOVERNMENT HOUSING FINANCE POLICIES AND PROGRAMS
ON HOUSING FINANCE SYSTEM ON GOVERNMENT FISCAL
DEVELOPERS
INFORMAL FINANCE INSTITUTIONS
DEVELOPERS
• BANK BTN • OTHER BANKS
INSTITUTIONAL INVESTORS Cash
• PENSION FUNDS • INSURANCE COMPANIES
Bonds
Cash
Cash
Bonds
Bonds
Mortgage Assets Cash
PRIMARY HOUSING FINANCE MARKET: SEGMENTED PARTIALLY DETACHED FROM THE CAPITAL MARKET
PT. SARANA MULTIGRYA FINANSIAL (SMF)
CAPITAL MARKET • RMBS (EBA-SP) • BONDS
Deposits & Loan Repayments
Cash
Pension & Interest
Bonds
PARTICIPATING BANKS
Taxes
Commercial Loans
EMPLOYERS
BLU PPDPP Special Circuit
COMMERCIAL BANKS
Mortgage Assets Cash
Commercial Loans
Savings and Loan Repayments
Wages
GOVERNMENT
• HIGH INCOME GROUP • MEDIUM INCOME GROUP • LOW INCOME GROUP
Savings & Insurance Premium
Subsidized Housing Loans
Commercial Loans
Savings and Loan Repayments
Loans
• MEDIUM UNIT • LUXURY UNIT
HOUSEHOLDS
Taxes
Savings & Loan Repayments
Loan Repayments
Construction Loans
• RIT • RSH
PEMBIAYAAN PERUMAHAN KARAKTERISTIK SISTEM PEMBIAYAN PERUMAHAN SPECIAL CIRCUIT
o SPECIAL CIRCUIT ADALAH SUATU MEKANISME MOBILISASI DANA MELALUI
o
o
LEMBAGA ATAU INSTRUMEN PEMBIAYAAN YANG DILENGKAPI DENGAN INSENTIF DAN PENGENDALIAN YANG DIOPERASIKAN, BAIK SECARA LANGSUNG ATAUPUN TIDAK LANGSUNG, OLEH PEMERINTAH. DI INDONESIA DIJUMPAI PADA USAHA PEMERINTAH UNTUK MEMOBILISASI DANA BAGI KPR PROGRAM LEWAT FASILITAS LIKUIDITAS PEMBIAYAAN (FLPP). DALAM KONTEKS INI, PEMERINTAH MENYEDIAKAN SEBAGIAN POKOK PINJAMAN KEPADA BANK PELAKSANA KPR PROGRAM (BTN DAN BANK LAINNYA) MELALUI BLU PPDPP. INSENTIF DIBERIKAN BERUPA DANA MURAH FLPP. PEMERINTAH MELAKUKAN HAL TERSEBUT AGAR MASYARAKAT BERPENDAPATAN RENDAH DAPAT MEMILIKI RUMAH LAYAK HUNI DAN TERJANGKAU. SPECIAL CIRCUIT DI NEGARA LAIN : JERMAN: BAUSPARKASEN (SAVING-FOR-BUILDING) INGGRIS: THE BUILDING SOCIETES AMERIKA SERIKAT: SAVING AND LOAN ASSOCIATIONS
PEMBIAYAAN PERUMAHAN KARAKTERISTIK SISTEM PEMBIAYAN PERUMAHAN PASAR YANG TERSEGMENTASI DENGAN MEMPROMOSIKAN PINJAMAN LUNAK MELALUI BANK TERTENTU, PEMERINTAH TELAH SECARA SADAR MENCIPTAKAN SEGMENTASI DALAM SISTEM PEMBIAYAAN PERUMAHAN. BENTUK SEGMENTASI DAPAT DILIHAT DARI FAKTA BAHWA KELOMPOK MASYARAKAT BERPENDAPATAN RENDAH DAN MENENGAH DILAYANI OLEH BANK BTN DAN BANK PELAKSANA LAINNYA, SEDANGKAN KELOMPOK MASYARAKAT BERPENDAPATAN TINGGI DILAYANI OLEH BANK KOMERSIAL. PASAR YANG TERISOLASI LEBIH JAUH LAGI, TERLEPAS DARI PESATNYA PERKEMBANGAN PASAR MODAL DI INDONESIA, SPP YANG SEKARANG BEROPERASI MASIH BELUM SEPENUHNYA TERHUBUNG DENGAN PASAR MODAL. HAL INI MERUPAKAN TANTANGAN DALAM KETERSEDIAAN DANA “MURAH” JANGKA PANJANG YANG DIBUTUHKAN OLEH PEMBIAYAAN PRIMER PERUMAHAN.
CAPITAL MARKET
APBN
BANK
BLU PPDPP
Portion=10% Rate= X%
Portion= 90% Rate= 0,3%
FRM
Blended Rate=5%
MBR Repayment
CREATION OF FISCAL BURDEN ON FLPP MORTGAGE PROGRAM
FISCAL BURDEN
CAPITAL MARKET
APBN
BLU PPDPP
BANK Portion= 100% Rate= Y%
FRM
Portion= 0%
RATE= 5% SSB n= Tenor
MBR
FISCAL BURDEN
Repayment
CREATION OF FISCAL BURDEN ON INTEREST RATE SUBSIDY MORTGAGE PROGRAM
CAPITAL MARKET
PMN
APBN
SMF
BANK
BLU PPDPP
Rate= <<x%
Portion=10% Rate= X%
Portion= 90% Rate= 0,3%
FRM ROLLOVER
Blended Rate=5% SCENARIO TO REDUCE FISCAL BURDEN: REDUCE APBN PORTION SEGMENT TARGET GROUPS APPLY DIFFERENT RATES APPLY ROLLOVER MORTGAGE ASSIGNED SMF TO SUPPLY THE REQUIRED FUNDING
MBR Repayment
MITIGATING FISCAL BURDEN ON FLPP MORTGAGE PROGRAM
FISCAL BURDEN
CAPITAL MARKET
APBN
BLU PPDPP
BANK Portion= 100% Rate= Y%
FRM
Portion= 0%
RATE= 5% SSB n= Tenor SCENARIO TO REDUCE FISCAL BURDEN: INCREASE SUBSIDIZED RATE SEGMENT TARGET GROUPS APPLY DIFFERENT RATES SHORTEN SUBSIDY PERIODS APPLY ROLLOVER MORTGAGES ASSIGNED SMF TO SUPPLY THE REQUIRED FUNDING
MBR Repayment
MITIGATING FISCAL BURDEN ON INT. RATE SUBSIDIZED MORTGAGE PROGRAM
FISCAL BURDEN
DEVELOPING SCENARIO TO MITIGATE FISCAL BURDEN ON FLPP MORTGAGE
Target Groups' No. Income (I) [Miilions Rp]
FLPP REFORM (FRM ROLLOVER 5 Years + Int Diff.) FLPP (%) Bank (%) Blended FLPP (%) Bank (%) Blended FLPP (%) Bank (%) Blended Portion Rate Portion Rate Rate (%) Portion Rate Portion Rate Rate (%) Portion Rate Portion Rate Rate (%) FLPP EXISTING (FRM 20 Years)
FLPP REFORM (FRM ROLLOVER 5 Years)
1 3,25 ≤ I ≤ 4,00 2 2,50 ≤ I < 3,25 3
I ≤ 2,50
90,00 0,30 10,00 11,91
5,00
80,00 0,30 20,00 6,27
5,00
60,00 0,30 40,00 6,27
6,50
70,00 0,30 30,00 6,27
5,75
80,00 0,30 20,00 6,27
5,00
DEVELOPING SCENARIO TO MITIGATE FISCAL BURDEN ON INT RATE SUB MORTGAGE
Target Groups' Maximum No. Income (I) Credit [Miilions Rp]
A = Existing Program No Segmentation i (%) n (yrs) PV
SUBSIDY SCHEMES (Market Rate 12% per year) B C D With Segmentation Segmentation + Shorten Segment + Shorten Diif. i (%) n (yrs) PV i (%) n (yrs) PV i (%) n (yrs) PV
1 3,25 ≤ I ≤ 4,00
180.000.000 5,00
20
2 2,50 ≤ I < 3,25
147.500.000 5,00
20 72.113.769 5,75 20 Yrs 53.449.849 5,75 10 Yrs 34.648.164 5,75 7 Yrs 26.435.019
3
113.000.000 5,00
20
I ≤ 2,50
6,50 20 Yrs 58.117.469 6,50 10 Yrs 37.541.641 6,50 4 Yrs 17.900.881
5,00 20 Yrs 45.271.422 5,00 10 Yrs 29.461.114 5,00 10 Yrs 29.461.114
CONCLUDING REMARKS 1. WHILE THE LIQUIDITY FACILITY HAS BEEN SUCCESFULLY EXPAND MORTGAGES AVAILABILTIY FOR LOW-INCOME HOUSEHOLDS, IT HAS THE POTENTIAL TO DISTORT THE MARKET. 2. THE OVERALL HOUSING FINANCE SUBSIDY IS TOO DEEP SO THAT SIGNIFICANTLY CREATING FISCAL BURDEN; 3. MITIGATING THOSE FISCAL BURDEN CAN BE PURSUED BY APPLYING FRM ROLLOVER AND SEGMENTING THE TARGET GROUPS WITH DIFFERENT SUBSIDIZED RATES AS WELL AS SHORTEN THE SUBSIDY PERIOD; 4. WHILE IT WAS TARGETED IN THE RPJMN 2015-2019, THE CURRENT HOUSING FINANCE SUBSIDY HAS NOT HAD HOUSING MICRO FINANCE SCHEMES SERVING THOSE OF INFORMAL SECTOR HOUSEHOLDS IN BUILDING OR PURCHASING THEIR HOUSES.
