Urbanization, Urban Housing And Housing Finance In Indonesia Pascasarjana UI

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ISKANDAR SALEH

HOUSING FINANCE SYSTEM

AND HOUSING FINANCE SUBSIDY

Jakarta, 7 November 2016

INDONESIA BANKING SCHOOL

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Decreased to globlal crisis, Only few countries in positive growth

2010 2011 2012 2013 2014 2015

3,010 3,540 3,751 3,669 3,531 3,362

INCOME PERCAPITA

( x000 USD)

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KEY VARIABLES

2009

2010

2011

2012

2013

2014

2015

GDP (USD Billion)

510,2 539,4 706,6 846,8

878,0

890,4

861,9

GDP Growth (%)

4.5

6.0

6.4

6.2

5.8

5.0

4.8 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

6,00

7,25

7,75

7,50

Years

Avg. Growth

Rate (%)

1998

–

1999

-6.65

2000

–

2004

4.60 2005

–

2009

5.64 2010

–

2015

5.70 DRIVERS OF GROWTH



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.

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Total Housing Backlogs 2015

Sumber: Bank Indonesia, Kemenpera, HDFC, Hofinet, SMF Research 2013

Housing Finance in Indonesia

11,3

JUTA UNIT

Housing Backlogs

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100%

1990

2000

2010

2015

< 5K USD

10K-15K USD

5K-10K USD

>15K USD

Average household disposable Income (RHS)

Annu

Source : CEIC, UBS Research

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GOVERNMENT

HOUSING FINANCE POLICIES AND PROGRAMS

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 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

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Figure

FLPP Mortgage and Down Payment Subsidy

Mortgage (Rp.)

PMT FLPP

18

2 4 6 8 10 12 14 16 20

Repayment Period (Years)

PMT@5,0% Down Payment Subsidy

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Figure

Interest Rate Subsidy Mortgage and Down Payment Subsidy

Mortgage (Rp.)

PMT Market Rate

Repayment Period (Years)

BI Rate + 5%

PMT@5.0%

PMT IRS

Down Payment

18

2 4 6 8 10 12 14 16 20

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Housing Finance Programs

2015 - 2019

JENIS BANTUAN PEMBIAYAAN PERUMAHAN SATUAN

TARGET DAN ANGGARAN

2015 2016

2017 2018 2019 TOTAL Renstra DIPA Renstra Pagu

Anggaran 1. Bantuan Uang Muka bagi MBR*

- Jumlah rumah tangga yang mendapatkan Bantuan

Uang Muka (BUM) Rumah Tangga 55,000 55,000 106,500 337,839 124,250 124,370 65,880 476,000

Anggaran ( x Rp 1 jt) Rupiah 220,000 220,000 479,250 1,351,000 621,250 684,035 395,280 2,399,815

2. Bantuan Pembiayaan Perumahan (KPR-FLPP) bagi MBR

- Jumlah rumah tangga yang mendapatkan bantuan

pembiayaan perumahan KPR sejahtera tapak Rumah Tangga 130,000 65,625 150,000 89,186 175,000 173,500 91,500 720,000

pembiayaan perumahan KPR sarusun Rumah Tangga - 25,000 50,000 75,000 26,500 176,500

pembiayaan perumahan KPR sewa beli sarusun Rumah Tangga - - - 1,500 2,000 3,500

- Jumlah unit rumah yang mendapatkan fasilitas

bantuan pembiayaan Kredit Konstruksi Unit Rumah - 1,000 1,500 2,000 1,500 6,000

pembiayaan perumahan KPR Swadaya Rumah Tangga - 50,000 150,000 200,000 50,000 450,000

Anggaran ( x Rp 1 jt) Rupiah 10,115,391 5,106,330 25,070,893 9,227,000 42,738,884 58,136,629 26,030,835 162,092,632

ANGGARAN SUBSIDI BANTUAN UANG MUKA

(BA 033.08/ BA 999.07) 220,000 220,000 479,250 1,351,000 621,250 684,035 395,280 2,399,815 ANGGARAN FLPP (BA 999.03) 10,115,391 5,106,330 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 5,326,330 25,550,143 10,578,000 43,360,134 58,820,664 26,426,115 164,492,447

Catatan:

 * ) TA. 2015 dibiayai melalui bansos (BA 033), mulai TA. 2016 dialokasikan melalui BA. 999.07.

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Catatan:

 Pagu tersebut berdasarkan pagu Nota Keuangan.

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CURRENT HOUSING FINANCE SYSTEM

AND HOUSING FINANCE SUBSIDIES IN INDONESIA

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.

2015 - Current

Integrating HFS to CM

Establishing Housing

Provident Fund (Tapera)

Increasing Participation of

Primary Mortgage Lenders

Level Playing Field

Bolstering HFS with LF

●

Construction Credit

Interest Rate Subsidy

on Budget (Spending)

Liquidity Facility

on Budget (Financing)

Subsidy toward People

Revive and Develop

Subsidy for Micro HF

Reactivate Subsidy for DP

Suspend Subsidy for

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

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PARTICIPATING BANKS

•BANK BTN

•OTHER BANKS

INFORMAL

Commercial Loans

Savings and Loan Repayments

Savings & Loan Repayments

C

Subsidized Housing Loans

Tax

Cash Bonds

Special

•MEDIUM UNIT

•LUXURY UNIT

HOUSEHOLDS

•HIGH INCOME GROUP

•MEDIUM INCOME GROUP

•LOW INCOME GROUP

GOVERNMENT

BLU PPDPP

INSTITUTIONAL INVESTORS

•PENSION FUNDS

•INSURANCE COMPANIES

PT. SARANA

MULTIGRYA FINANSIAL (SMF)

CAPITAL MARKET

•RMBS (EBA-SP) •BONDS

HOUSING FINANCE SYSTEM

Mortgage Assets Cash

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THE IMPACTS OF GOVERNMENT

HOUSING FINANCE POLICIES AND PROGRAMS



ON HOUSING FINANCE SYSTEM

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PARTICIPATING BANKS

•BANK BTN

•OTHER BANKS

INFORMAL

Commercial Loans

Savings and Loan Repayments

Savings & Loan Repayments

C

Subsidized Housing Loans

Tax

Cash Bonds

Special

•MEDIUM UNIT

•LUXURY UNIT

HOUSEHOLDS

•HIGH INCOME GROUP

•MEDIUM INCOME GROUP

•LOW INCOME GROUP

GOVERNMENT

BLU PPDPP

INSTITUTIONAL INVESTORS

•PENSION FUNDS

•INSURANCE COMPANIES

PT. SARANA

MULTIGRYA FINANSIAL (SMF)

CAPITAL MARKET

•RMBS (EBA-SP) •BONDS

Mortgage Assets Cash

PRIMARY HOUSING FINANCE MARKET:

 SEGMENTED

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PEMBIAYAAN PERUMAHAN

o

SPECIAL CIRCUIT ADALAH SUATU MEKANISME MOBILISASI DANA MELALUI LEMBAGA ATAU INSTRUMEN PEMBIAYAAN YANG DILENGKAPI DENGAN INSENTIF DAN PENGENDALIAN YANG DIOPERASIKAN, BAIK SECARA LANGSUNG ATAUPUN TIDAK LANGSUNG, OLEH PEMERINTAH.

KARAKTERISTIK

SISTEM PEMBIAYAN PERUMAHAN

SPECIAL CIRCUIT

o

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.

o

SPECIAL CIRCUIT DI NEGARA LAIN :



JERMAN: BAUSPARKASEN (SAVING-FOR-BUILDING)



INGGRIS: THE BUILDING SOCIETES

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PEMBIAYAAN PERUMAHAN

 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 TERSEGMENTASI

 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.

PASAR YANG TERISOLASI

KARAKTERISTIK

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BLU

PPDPP

MBR

Portion=10% Rate= X%

Portion= 90% Rate= 0,3%

Blended Rate=5%

CAPITAL

MARKET

BANK

APBN

Repayment

CREATION OF FISCAL BURDEN

ON FLPP MORTGAGE PROGRAM

FISCAL

BURDEN

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BLU

PPDPP

MBR

Portion= 100% Rate= Y%

Portion= 0%

CAPITAL

MARKET

BANK

APBN

Repayment

FISCAL

BURDEN

RATE= 5% SSB n= Tenor

CREATION OF FISCAL BURDEN

ON INTEREST RATE SUBSIDY MORTGAGE PROGRAM

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BLU

PPDPP

MBR

Portion=10% Rate= X%

Portion= 90% Rate= 0,3%

Blended

MITIGATING FISCAL BURDEN

ON FLPP MORTGAGE PROGRAM

FISCAL

BURDEN

SMF

Rate= <<x%

SCENARIO TO REDUCE FISCAL BURDEN:

REDUCE APBN PORTION SEGMENT TARGET GROUPS APPLY DIFFERENT RATES APPLY ROLLOVER MORTGAGE ASSIGNED SMF TO SUPPLY

THE REQUIRED FUNDING

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BLU

PPDPP

MBR

Portion= 100% Rate= Y%

Portion= 0%

CAPITAL

n= Tenor

FRM

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

MITIGATING FISCAL BURDEN

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DEVELOPING SCENARIO

TO MITIGATE FISCAL BURDEN ON FLPP MORTGAGE

Portion Rate Portion Rate Portion Rate Portion Rate Portion Rate Portion Rate

1 , ≤ I ≤ ,00 60,00 0,30 40,00 6,27 6,50

2 , 0 ≤ I < , 70,00 0,30 30,00 6,27 5,75

3 I ≤ , 0 80,00 0,30 20,00 6,27 5,00

FLPP REFORM (FRM ROLLOVER 5 Years + Int Diff.)

FLPP (%) Bank (%) Blended Rate (%) FLPP REFORM (FRM ROLLOVER 5 Years)

FLPP (%) Bank (%) Blended Rate (%)

80,00 0,30 20,00 6,27 5,00 Blended

Rate (%) FLPP EXISTING (FRM 20 Years)

FLPP (%)

90,00 0,30 10,00 11,91 5,00 No.

Target Groups' Income (I)

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i (%) n (yrs) PV i (%) n (yrs) PV i (%) n (yrs) PV i (%) n (yrs) PV

1 , ≤ I ≤ ,00 180.000.000 5,00 20 6,50 20 Yrs 58.117.469 6,50 10 Yrs 37.541.641 6,50 4 Yrs 17.900.881

2 , 0 ≤ I < , 147.500.000 5,00 20 5,75 20 Yrs 53.449.849 5,75 10 Yrs 34.648.164 5,75 7 Yrs 26.435.019

3 I ≤ , 0 113.000.000 5,00 20 5,00 20 Yrs 45.271.422 5,00 10 Yrs 29.461.114 5,00 10 Yrs 29.461.114 72.113.769

Segmentation + Shorten Segment + Shorten Diif. No.

Target Groups' Income (I) [Miilions Rp]

Maximum Credit

SUBSIDY SCHEMES (Market Rate 12% per year)

A = Existing Program B C D No Segmentation With Segmentation

DEVELOPING SCENARIO

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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

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