Professional Documents
Culture Documents
Outline
Why Housing Finance ? How to Expand Housing Finance World Bank Strategy, Products IFC Strategy, Products Challenges for the World Bank Group
Meet a growing housing demand (urbanization, demographics) Prevent slum proliferation (cities built the way they are financed) Reduce poverty (asset building, retirement, empowerment,
community strengthening, improved living conditions)
Policy
Affordable land use & urban development rules Efficient registration of property titles & liens Smarter HF-related subsidies Instruments to reallocate part of the additional risks Framework for long-term mortgage securities (different models)
5
. 1 .6 11.1 8.3
P r o pe r ty pr ic e s in s u b u r b a n M u m b a i b y a n n u a l ho u s e ho ld in c o m e
Housing Pr ices in subur ban M um bai by annual incom e
6.6
.3
.1
4.7
4.3
1996
1997
1998
1999
2000
2001
2002
2003
200
l -0
l -0
l -0
l -0
l -9
l -9
l -9
l -9
l -9
n9
n9
n0
n0
n0
n0
Ju
Ju
Ju
Ju
Ju
n0 Ja
n9
n9
n9
Ja
Ja
Ja
Ja
Ja
Ja
Ja
Ja
Mo n t s
Ja
Ju
Ju
Ju
Ju
Ju
l -0
Grounds for Cautious Optimism Still gap between advanced economies (large and low-risk portfolios) and emerging economies Yet promising portfolio growth & affordability (Chile, Malaysia, Baltic, Mexico, Jordan, India ) No optimal model: customization & sequencing, menu of products for different target groups Key to develop primary local-currency mortgage markets before more sophisticated instruments Caution needed to develop this sensitive sector
7
Debt As % GDP
10% 20% 30% 40% 50% 60% 70% 0%
ENVIRONMENT/ INFRASTRUCTURE
PRIMARY MARKET
SECONDARY MARKET
What do we do ?
Growing scope (up to 0 countries, ambitious reforms) Broader range of TA and loans Conferences & training programs HF flagship book in FY0 Limited anchor size Challenge to access grant funds
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Sustainable development in a small economy Support to a liquidity facility (issue bonds, refinance lenders) Reduce lending risks, catalyst of credit affordability gains Targeted program of interest buy down vouchers
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WBG Loans
From 1982 to 2003: WBG: $ 5.1 billion of HF loans High 89% satisfaction rate (OED, Bank projects) Small part - 1.5% - of WBG loans Large part - 46% - of urban shelter loans Recent increase of HF activities Stronger presence in MENA, LAC, South Asia Business development stage in ECA, Africa
o o o U D on
$609 $613
$84
$2,661
12
13
Investment
14
Credit En Risk Sharing ebt: Credit Lines Warehouse Credit Lines Liquidity Facilities Equity: Conduits Mortgage Ins Servicing Co Originators
Land Finance
15
SECON ARY
16
F
2 22
IFC
25 2
151 4
5%
8%
15 1
L e
F
2 75 2 6 1.7
80
15
70 60
2 7.
75 80 100
F Y0 3
F Y0 4
e r
17
1 0)( '
&%
"
!
#
46
11
5 2 21 11
L Q 84%
Mortgages Credit Line eveloper-cummortgage originator Trustee Collateral for IFC Phase II Security Vehicle
Local Mortgage Market
Home Buyers
Institutional Investors
Securitization
Local Capital Market
Access to long term local currency (NIPC program) Islamic housing finance Energy efficiency products Mortgage finance provided by sub-sovereigns
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