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
Population Distribution
2%
7%
21%
7%
6%
Sumatera
Java
Kalimantan
Sulawesi
Papua
Others
57%
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
ECONOMIC OUTLOOK
3
7.00%
6.50%
6.23%
6.10%
6.00%
6.00%
250
245
Millions
GDP GROWTH & POPULATION
4.60%
5.00%
240
4.00%
235
3.00%
230
2.00%
225
1.00%
0.00%
220
2008
2009
Population
2010
2011
2012
GDP
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%
6.00%
6.00%
10.73%
10.85%
10.80%
10.71%
10.68%
10.67%
10.65%
10.65%
10.65%
10.65%
10.63%
5.75%
5.75%
5.75%
5.75%
5.75%
5.75%
5.75%
5.75%
5.75%
5.75%
5.75%
4.50%
4.45%
4.53%
4.56%
4.58%
4.32%
4.30%
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Nov-12
Dec-12
10.00%
8.00%
6.00%
4.00%
3.97%
3.79%
3.65%
3.56%
Dec-11
Jan-12
Feb-12
4.31%
4.61%
2.00%
0.00%
Mar-12
Mortgage Base Lending Rate
BI Rate
Sep-12
Oct-12
Inflation
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%
Indonesia Mortgage to GDP Ratio
3.0%
2.70%
2.46%
2.5%
2.2%
57.9%
2.0%
37.0%
2.1%
1.8%
2.0%
31.0% 31.2%
2.0%
1.7%
1.3%
1.5%
1.2%
24.9%
1.0%
0.8%
0.7%
1.0%
2.6%
4.0% 4.5% 6.1%
9.0%
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
257 milion
Population growth
1.49% per year
Needs for housing
800,000 per year
Estimation National demand
position (*)
15 milion
Estimation time to address
20 years
Needs for housing
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
Residential Property Price Index
40
162.04
165
35
250
200
150
160
30
155
25
150
152.64
145
20
140
15
100
50
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
Volume (Thousand Units) 106.5 121.3 134.5 150.6
169
163.6 191.7 231.4 173.4 212.3 242.3
Value (IDR Trillion)
16.2
17.56
4.04
7.13
8.16
11.45
23
10
130
5
125
120
0
201
1
143.23
135
Small
29.37 25.93 31.08 37.96
Medium
Large
Construction Loans
120,000
95,921
100,000
75,395
billion IDR
80,000
58,753
64,225
63,500
2009
2010
60,000
44,088
40,000
33,088
20,000
0
2006
2007
2008
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
Outstanding Mortgage Portofolio
Mortgage to Total Bank Loans Ratio
250
9.00%
222
200
183
7.72%
7.69%
8.00%
7.78%
7.96% 8.30%
8.01%
8.21%
7.00%
6.63%
Trillion IDR
6.00%
141
150
124
5.46%
5.00%
4.76%
108
4.00%
100
84
65
46
50
12
11
21
31
3.00%
3.83%
2.91%
2.00%
1.00%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
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
0.95%
5.62%
0.34%
46.32%
State Owned Banks
Private National Banks
46.77%
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
8.67%
11.33%
Mortgage Loan
Cash Instalment
Hard Cash
80.00%
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
2018
2005
Catalysator
Facilitator
To Develop secondary mortgage market
To Build and develop secondary mortgage
market.
 Liquidity Facility
 Securitization
Liquidity Facility
Securitization
 Securitization & Guarantor (Mortgage
& RMBS)
 Housing Finance Information System /
HFIS
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
5,555
5,000
In billion IDR
4,000
3,303
3,000
2,955
2,049
2,000
1,347
1,954
1,252
1,000
502
0
0
2005
2006
2007
2008
Securitization
2009
2010
2011
2012
Lending
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
PRIME RMBS

Subordination (Junior Class)

Reserve Account

Servicer transition fund
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
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
Weighted Average
Class A
Remaining Time to Total Issuance RMBS Coupon
Rating on
Maturity
(Billion Rp)
Class-A
Issuance
(Years)
Current
Rating
RMBS
Issuance Date
I
11/02/2009
5.30
111
13%
idAAA
idAAA
II
10/11/2009
5.63
391
11%
idAAA
idAAA
III
27/12/2010
5.35
750
9.25%
idAAA
idAAA
IV
17/11/2011
5.94
703
8.75%
idAAA
idAAA
V
13/12/2012
6.35
1.000
7.75%
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)
RMBS I
13.00%
RMBS IV
3.30%
1.55%
11.63%
32.56%
52.01%
31.69%
Financial Institution
23.26%
Pension Fund
Government Institution
Financial Institution
Banks
31.01%
Banks
Private Companies
0.73%
RMBS III
Pension Fund
Foundation
0.29%
7.26%
5.34%
Banks
Pension Fund
47.20%
39.18%
Foreign Institution
Financial Institution
Foundation
RMBS II
Insurance
RMBS V
5.73%
5.76% 0.76%
1.08%
12.57%
21.67%
Pension Fund
Mutual Fund
Pension Fund
71.82%
20.00%
60.62%
Insurance
Financial Institution
Financial Institution
Foundation
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 Individual 1.56%
1.87%
Mutual Fund More
Than 5 Years 1.31%
Foundation 0.75%
Mutual Fund 5.80%
Incorporated
Company 12.23%
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
HAK
TAGIH
KPR
SEKURITISASI
EBA
PEMBIAYAAN
OBLIGASI
AGUNAN KPR
DANA OBLIGASI
PASAR
MODAL
PENYALUR
KPR
INVESTOR
PERAN SMF:
 PENERBIT EBA (dalam proses)
 PENATA SEKURITISASI,
 PENDUKUNG KREDIT,
 INVESTOR
DEVELOPER
PERUMAHAN
26