Transcript view presentation here - Asia Pacific Union For Housing Finance

Housing and Housing Finance in
Pakistan
State Bank of Pakistan
Key Statistics – Housing & Housing Finance
• Population: More than 170 million,
– 2/3rd rural-1/3rd urban
• Number of persons per room: 3
• Access to formal finance: 14%
• Housing Finance to GDP ratio
approximately 1%
• Economic Survey of Pakistan, 2011
• WB Study-Expanding Housing Finance to the Underserved in South Asia,
2011
Key Statistics – Housing & Housing Finance
Housing Shortfall = 8 million units, 6 million of which
concentrated in lower middle income group
Housing Supply per Year = 0.3 million units
Total housing needs = 0.7 million units per year
Major metropolitans like Karachi are facing high rate of
urbanization – Karachi population 16 million plus, growing @
of 7-8% pa. Nearly half of Karachi’s population is squatter
settlements (around 600-800). Karachi alone needs 100,000
new housing units per year to meet natural growth, cover
backlog & urbanization pressure
•
•
•
•

WB Study-Expanding Housing Finance to the Underserved in South Asia, 2011
Key Statistics – Housing & Housing Finance
Mortgage Finance Outstanding (Billion Rupees)
90
84
80
77
76
67
70
62
59
60
50
40
30
20
10
0
2006
2007
2008
2009
2010
2011
Key Statistics – Housing & Housing Finance
Weighted Average Interest Rate (%)
20
17.3
18
16.02
15.64
16
14.65
14
12.14
12
10.31
10
8
6
4
2
0
2006
2007
2008
2009
2010
2011
Efforts for Housing in Pakistan
•
•
•
•
•
•
•
National Housing Policy 2001
National Housing Authority/Pakistan Housing Authority
Prime Minister Housing Schemes
House Building Finance Company Limited
Formation of Housing Advisory Group by SBP
Initiatives by Provincial Governments
Private Sector Initiatives
Role of SBP in Promotion of Housing
Finance in Pakistan
• Formation of Housing Advisory Group
– Implementation of HAG recommendations
•
•
•
•
Review of Prudential Regulations for Housing Finance
Preparation of Housing Finance Guidelines
Development of a Model for Builders/Developers Finance
Capacity Building of Financial Institution in housing finance
through seminars, workshops and training programs
• Development of secondary mortgage market in Pakistan by
creating a Mortgage Refinance Company (MRC)
• Championing Low-income housing finance
• Involving key Stakeholders – ABAD, AMB
Housing Advisory Group
SBP formulated a Housing Advisory Group (HAG), drawing membership
from different stakeholders. Its recommendations are being actively
pursued by SBP
• Reforming Legal Framework affecting Foreclosure, Transfer, Tenancy,
Rent Control and Credit bureaus etc
• Rationalization of Transaction Costs
• Establishing an integrated land registration information system
• Increasing supply of land for affordable housing
• Structuring and streamlining large scale developer’s finance
• Facilitate low-cost/low-income housing models and products
• Facilitate Real Estate Investment Trusts (REITs)
• Provision of long term funding for housing loans
• Housing Observatory (housing market information system)
• Capacity building of the mortgage banking industry in Pakistan
Mortgage Refinance Company
• Develop the Primary Mortgage Market
– Provide financial resources to enable primary mortgage lenders
(PMLs) to grant more loans at fixed/hybrid rates and for longer
tenure
– Prepare PMLs for BASEL compliance by narrowing the gap
between the maturity structure of the housing loans and the
source of funds
– Ensure loan standardization across primary lending institutions
which is necessary for any future securitization
• Develop the capital markets
– Provide more private debt securities (Bonds) with different
maturities and rates for investment of surplus funds
– Promote ABS as a tool for raising funds from the capital markets
– Create a Yield Curve to serve as a benchmark for other
institutions
Development of Prudential Regulations
• The Housing Finance regulations are covered under
Consumer Finance Prudential Regulations.
• Since Housing Finance has its distinct nature and
scope, there has been growing demand from all
stakeholders to separate Housing Finance from
Consumer Finance.
• SBP intends to announce reviewed Housing Finance
Prudential Regulations this year.
Development of Mortgage Guidelines
• Comprehensive set of Mortgage Finance Guidelines
covering all facets of Housing Finance (Conventional
and Faith-Based) based on best lending practices.
• With active involvement of Association of Mortgage
Bankers and feedback from other Stakeholders,
these Guidelines would be launched this year.
Large Scale Builders Finance Model
• SBP is working to develop financing models to facilitate
large-scale builders/ developers’ access to formal financial
sector.
• The Association of the Builders and Developers (ABAD),
Investment Bankers, Association of Mortgage bankers
(AMB) and Rating Agency have been consulted for the
purpose.
• Key challenges include:
– Corporatization of large-scale developers
– Bankable financial statements
– Credit rating (Entity and Instrument Ratings)
– Fiscal issues relating to Book Value and Market Value,
declared income and wealth etc.
Initiatives in Low cost Housing
• Ashiana Housing Scheme by Punjab Land
Development Company (Punjab Govt.).
• Hawksbay Scheme 42 by Lyari Development
Authority Karachi (plots + residential
infrastructure)
• Lyari Re-settlement Project
• Housing Project by Ansar Management
Company
• Incremental Housing Scheme “Khuda Ki Basti”
by Saaiban-NGO
Initiatives in Low cost Housing
• Naya Nazimabad, Karachi
• Khayabane Ameen, Lahore
Thank You