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Mongolia Housing Market: Growth, Mining Towns, and Mortgage Market Overview

Learn about the growth of Mongolia's housing market, development in mining towns, mortgage market overview, and MIK's role in the secondary mortgage market. Discover the potential for investment and development in Mongolia's real estate sector.

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Mongolia Housing Market: Growth, Mining Towns, and Mortgage Market Overview

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  1. Country Highlights Mongolia NHB-APUHF International conference 30/Jan/ 2012 Enkhbayar Tsedendorj

  2. Content • Mongolian housing market growth • Mining town Housing development • Mortgage market overview • Potential development of Mortgage market • Development of Secondary mortgage market and MIK’s function • Conclusion

  3. Housing Areas: Ger area • Population 2,75 million, Total # Households-714,000 • 45% of them in Ger including 33% urban households • Urban- 67%; Rural 33% • Ger and Housing, % • Urban: 33:67; Rural: 71:29 Source: Mongolian 2010 Census

  4. Mongolian housing market growth • Over the 20000 units under construction in UB alone • The volume of housing units per year will have to be at least 10,000 to meet demand, including the mining towns Source: MRTCUD Housing supply, by thousand sq m

  5. “TSETSII” Mining Town Housing development in South Gobi, TsogtTsetsii soum, by Energy Resources Company Area: 21 hectare 1648 flats for mining workers Social and physical infrastructure facilities will be provided Source: ER, MCS property

  6. Current Housing Development

  7. Ulaanbaatar city

  8. Country side picture-1

  9. Country side picture-2

  10. Country side picture-3

  11. Mongolian Ger

  12. Country side picture-4

  13. The strong growth of banks begun in 2004 has resumed Source: BOM and TDB

  14. Mongolia’s strong GDP growth will drive strong loan growth Source: IMF and TDB

  15. Mortgage lending in Mongolia will grow dramatically The sources are BoM, IMF, MIK TDB

  16. Providing Home ownership to more and more Mongolians Source: MIK and TDB

  17. Mongolian mortgage market overview(1) • Mortgage Standard: • LTV <70% • DTI>45% NPL % Mortgage loans-0,45% MIK portfolio-0.0% * Source: Monetary Policy and Research Department, Bank of Mongolia

  18. Mongolian mortgage market overview(2) * Source: Monetary Policy and Research Department, Bank of Mongolia

  19. Housing Price Index , by 6 districts of the Capital city * Source: Bulletin of National Statistic office **Note: Statistical substitutional methodology has been used on some apartment price data.

  20. MONGOLIAN MORTGAGE CORPORATION + Established 06.09.2006 Why we established MIK • Increase the affordability of the housing loan • Stable structure for long term financing • Liquidity facility • Increase in housing mortgage market • Need for capital market development

  21. Mission statement • Promotion and development of primary and secondary mortgage markets • By raising medium to long term funds on domestic and foreign capital market • Through a series of capital market tools to create and ensure smooth functioning of long-term financing system • To promote affordable home ownership and urban development for Mongolia’s people.

  22. МIK OPERATION • Purchased 10 Mortgage pools • MIK issued Covered Mortgage Bond in 2009 -9,7 Bln MNT, 2, 3.5, 5 years, 14-14.5% • Got an approval from the Financial Regulatory Commission to issue 25 bln MNT bond ; • Mortgage Legal and Regulatory framework • Mortgage standardization and Documentation - IFC and KfW, EBRD • Mortgage law July 2009 • Asset based security law April 2010 • Shelf registration , OTC procedure • Listed as a repo financing instrument under Central Bank of Mongolia • Capital increase, offering equity investment to potential investors

  23. Cooperation and recent development • Cooperation with IFC, KfW, USAID, APUHF, EBRD • IFC: 2 Small TA-Mortgage toolkit adaptation and Housing micro finance • KfW: Loan and TA project through Government FSM • USAID: Legal framework and Mortgage bond Guarantee 50% • Wharton school International HFP, Hofinet data : • CAGAMAS

  24. Conclusion • Considerable housing needs to be built in Mongolia • Mongolian mortgage market is developing rapidly • Secondary market development will be essential • Foreign investors in covered bonds or mortgage backed securities will be needed • MIK, with strong local and international support, is poised to create quality investment instruments • Investors in the housing market, as well as the secondary mortgage market are welcome

  25. THANK YOU Mongolian Mortgage Corporation LLC /MIK/ MIK Building , United Nations street-38 Chingeltei district-4, 15160 Ulaabaatar, Mongolia www.mik.mn, info@mik.mn Tel: (976) 11-328267 Fax (976) 11-313338

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