Conference on Housing: An Engine for Inclusive Growth

1. Conference onHousing: An Engine for Inclusive Growth April 11-12, 2013 Hotel Imperial , New Delhi, India

2. This year’s conference…. • Participation of delegates from over 12 developed and emerging countries including Bangladesh, Indonesia, Iraq, Japan, Malaysia, Mongolia, Pakistan, Sri Lanka, Thailand, Nigeria and Yemen. The Conference saw representation from Central Banks of various countries, Policy Makers, Planners, Banks, Financial Institutions, Multilateral Agencies and Academia. • 02 days conference – 09 technical sessions

3. About APUHF…. • Asia Pacific Union For Housing Finance, APUHF acts as a platform for knowledge sharing and networking. The forum intends to promote coalition and coordination among the Asia Pacific Countries in exchanging experiences and models on housing and housing finance • APUHF tracks the events and happenings in the housing markets globally • The users of the platform include member country institutions engaged in housing and housing finance • APUHF has entered into collaboration with APMCHUD (Asia Pacific Ministers’ Conference on Housing and Urban Development) • http://www.apuhf.info

4. Inaugural Session Salient Features • Social Indicator • Multiple linkages • Spurs growth and generates employment • Housing shortage in most of the developing countries. Recommendations • Active participation of stakeholders – enablers, promoters, executors • Adoption of a multipronged strategy, encompassing the demand and supply side initiatives • Market infrastructure building • Risk mitigation measures • Awareness building and consumer protection measures

5. Session I: Theme Presentations - Cross Country Experiences Salient Features • The participating countries shared the status of housing sector in their respective countries along with initiatives taken / recommended for the sector. Recommendations • Micro Finance is seen as a plausible solution for inclusive housing • Development of Innovative yet simple products • Securitization • Regulatory Framework required • Rental cum ownership housing • Need for sound long term housing policy • Land and infrastructure – need efficient management

6. Session II : Urbanization and Attendant Challenges Salient features • Urbanization - rapidly growing phenomenon being witnessed by developing countries • New and unprecedented challenges • Policy makers and planners looking for innovative models Recommendations • Single window clearances • Encouragement to PPPs so that the project is not abandoned in the last stages due to financial constraint • Clear and valid titles • Proper infrastructure planning

7. Session III: Inclusive Housing - Regulatory and Policy Framework Salient features • 02 important aspects – land & finance • Limited growth of Micro housing finance • Incremental lending and incremental construction Recommendations • Compact cities - effective and efficient land usage • Improving security of tenure • Attract more housing finance as the market is highly under penetrated

8. Session IV: Housing Challenges: International Financial Institutions’ Perspective Salient features • Affordability and accessibility – land & finance • Affordability is impacted by increase in property costs, increase in cost of building materials, lack of availability of mortgage finance and no access to credit • Different models for slum upgrading, subsidies, housing, microfinance, public rental housing Recommendations • Focus on LIG, EWS as well as lower MIG • Infrastructure to be planned sustainably to solve the urban housing shortage in the long run

9. Session V: Government Policies and Initiatives Salient features • Room for various players including government, private players, development institutions and financial institutions. • Policies that are meant to stimulate demand for housing have both price and quantity effect. • Risks and returns associated with housing sector Recommendations • Prudent policies so as not to generate asset bubble in the housing market • Policy design is very important but flexibility in the policy architecture is equally important • Risks can’t be eliminated but can be mitigated

10. Session VI: Funding Housing Salient features • Two instruments being used in various parts of the world are Covered Bonds and Mortgage Insurance • Benefits of Covered Bonds and Mortgage Insurance • Mortgage insurance is used at higher LTV (70-80 per cent) Recommendations • To continue with pre-crisis growth in a sustainable manner the markets need to evolve not only in regulation but also in product development • Need to be adapted and tested before being implemented in other countries

11. Session VII: Housing Finance Post Sub-prime Salient features • Lenders to know the borrowers • Self-certification of documentation is not sufficient • Market discipline is not enough • Maturity mismatch Recommendations • Macro-economic stability – concern as well as responsibility of Policy Makers • Build in checks and balances and monitoring mechanisms • Healthy LTV ratios which are dynamic and not static • Risk weights should be decided taking into account trends in loan quality and the environment.

12. Session VIII: Low Income Housing - Developing a Sustainable Supply Ecosystem Salient features The following impediments in developing a sustainable supply ecosystem need to be addressed : • Delay in approvals • Rising costs of labour and material • High concentration of housing construction Recommendations • Simple construction and hand over of housing units is not sufficient - construction has to be carried out keeping in view the sustainability of the unit. • Use innovative and new products and technology • Government should launch schemes which benefit LIG and EWS categories

13. Session IX: Data & Statistics and Consumer Related Issues Salient features • Availability, timeliness, accessible, completeness, and accurate data • Credit history is important for borrowers as well as lenders • Challenges exist in data collection and verification – Scale, Registration price is not always reflected of the actual price & Informality Recommendations • Technology penetration • Information Verification – the information being collected should be verified so as to minimize probability of default.

14. Valedictory Session and closing Remarks SUMMARY: • Demand for housing due to rising population and increasing urbanisation • Perceptible housing shortage in most of the developing countries • Strong need for stability in the sector • Liability and asset mismatch of the FIs catering to the sector to be tracked down. • Need for confidence building among the stakeholders

15. Recommendations Housing: • Stakeholders to work in tandem • Need for real estate regulator • Single window clearances - need for IT Platform • Clarity and simplification of related laws. • Fiscal measures - taxes, incentives etc. Waiving VAT, stamp duty and registration fees for low-income customers • Specific Incentives for Affordable Housing Projects • Encouraging “Rent to own” models • Long term funds and technical assistance from the international institutions

16. Recommendations…contd Housing Finance: • Credit to the poor and directed subsidy for the poor, since they have limited affordability. • Domestic savings to be mobilized for innovative schemes. • Underwriting measures and risk diversification. • Regulatory environment to encourage innovation in financial products and also ensure checks and balances. • Need for customized loan Schemes • Micro finance for LIGs • Incremental building • Integration of housing market with housing finance , primary mortgage and capital markets.

17. Some Moments….Day 1 (11th April 2013)

18. Some Moments….Day 2 (12th April 2013)

19. Thank You