3. Taimur Samad UI Housing Presentation November 7 2016
Affordable Housing For All:
National Affordable Housing Program
Jakarta, November 7, 2016
Indonesia is undergoing rapid urbanization
I do esia s ur a populatio has grow fro
7 to per e t of the populatio si e 97 , a d is e pe ted to
reach 71 percent by 2035, while the rural population will shrink
350
70
300
60
250
50
200
40
150
30
100
20
50
10
0
0
1970 75
80
85
90
95 2000 05
Urban
Source: WDI for 1970-2015, BPS for 2020-35
Rural
10
15
20f
Urbanisation Rate
25f
30f
35f
Urbanisation (%)
Millions
Indonesian Population, 1970-2035
1970-2015
2015-35f
Urban
CAGR*
4.4%
2.0%
Rural
CAGR*
0.5%
-0.8%
Urban %
Change
37ppt
17ppt
The eed for afforda le housi g i reases with I do esia s rapid
urbanization
Urbanization rate is one of the highest in the
developing region
Urbanization Rate (%), 2015
Malaysia
Urbanization drives economic growth and
creates higher income opportunities: 18
mm of 21 mm new jobs between 20012011 were in urban areas.
Demand for housing is growing along with
urbanization rate and rising incomes
China
Indonesia
Urbanization exposes poorer households in
cities to negative externalities, increased
overcrowding1 and limited access to key
services and amenities
Thailand
Philippines
Vietnam
India
0
Source:
WDI
20
40
60
80
(1) Reaching ~20% in core cities, as per Susenas 2014
There is a substantial existing housing deficit
Of the 64.1 million housing units in Indonesia, 20% are in poor condition
Housing backlog ranges from 3.9 mm to 17.2 mm (see below).
820K units of housing are required each year to meet new demand, estimate that 200K - 370K HHs will not have
their housing needs met.
Market-rate housing without subsidy enhancements is affordable only to the top 20%.
60% of Indonesians do not form part of the formal workforce, no mortgage products available for this segment.
Without intervention, households will resort to overcrowding and slum areas are expected to increase.
Various Housing Backlog Estimates
Backlog Estimate
Classification
Total Units
Low Estimate
Only Slum Households
3.9 million
Middle Estimate
Only overcrowded units
7.5 million
High Estimate
Non-home ownership, reported
by BPS and MPWH
17.2 million
GoI sets Satu Juta Rumah Annual Housing Target in 2015
• GoI Housing Budget of ~21 T IDR (~0.2% GDP) in 2016
• Conservative relative to peer countries: Thailand at
2.2% GDP and Philippines of 0.3% GDP
• Inadequate to meet 1M housing units target
• On the housing finance subsidy side - FLPP:
• 2015: Spending of ~6T IDR delivered 90,000 units
• 2016: Budget of ~13.2T IDR expected ~200,000 units
• On the housing supply side - BSPS:
• 2015: Spending of ~1.2T IDR only 83,000 units
• 2016: Budget of ~1.4T IDR to deliver 95,000 units
12000
10000
8000
6000
4000
2000
0
2012
2013
FLPP
2014
BSPS
2015
2016
Others
Housing Budget Allocation for Different
Housing Programs (in IDR B)
Increased public spending cannot fill the gap to 1M Homes:
Need efficiency of spending and massive mobilization of private sector participation
Only the Top 2 Deciles of Income Distribution are Well Served; 5th to 8th
Deciles Underserved and Mostly by One Bank
*Sources: BI Residential Property for Primary Houses, MPWH data and World Bank Assumptions
Decile
9-10
6 Banks
@ Avg 500M IDR;
~
K Loa s
76% Share
Decile
5-8
BTN
@ Avg 100M IDR;
~7 K Loa s
98% Share
FLPP
Product
(Formal Income)
Decile
1-4
Gaps:
Middle Low
Income & NonFixed
UNSERVED
*Mortgage Loan Origination of ~80 T IDR in 2015
No Housing Finance Available for Non-Fixed and
National Affordable Housing Program
Jakarta, November 7, 2016
Indonesia is undergoing rapid urbanization
I do esia s ur a populatio has grow fro
7 to per e t of the populatio si e 97 , a d is e pe ted to
reach 71 percent by 2035, while the rural population will shrink
350
70
300
60
250
50
200
40
150
30
100
20
50
10
0
0
1970 75
80
85
90
95 2000 05
Urban
Source: WDI for 1970-2015, BPS for 2020-35
Rural
10
15
20f
Urbanisation Rate
25f
30f
35f
Urbanisation (%)
Millions
Indonesian Population, 1970-2035
1970-2015
2015-35f
Urban
CAGR*
4.4%
2.0%
Rural
CAGR*
0.5%
-0.8%
Urban %
Change
37ppt
17ppt
The eed for afforda le housi g i reases with I do esia s rapid
urbanization
Urbanization rate is one of the highest in the
developing region
Urbanization Rate (%), 2015
Malaysia
Urbanization drives economic growth and
creates higher income opportunities: 18
mm of 21 mm new jobs between 20012011 were in urban areas.
Demand for housing is growing along with
urbanization rate and rising incomes
China
Indonesia
Urbanization exposes poorer households in
cities to negative externalities, increased
overcrowding1 and limited access to key
services and amenities
Thailand
Philippines
Vietnam
India
0
Source:
WDI
20
40
60
80
(1) Reaching ~20% in core cities, as per Susenas 2014
There is a substantial existing housing deficit
Of the 64.1 million housing units in Indonesia, 20% are in poor condition
Housing backlog ranges from 3.9 mm to 17.2 mm (see below).
820K units of housing are required each year to meet new demand, estimate that 200K - 370K HHs will not have
their housing needs met.
Market-rate housing without subsidy enhancements is affordable only to the top 20%.
60% of Indonesians do not form part of the formal workforce, no mortgage products available for this segment.
Without intervention, households will resort to overcrowding and slum areas are expected to increase.
Various Housing Backlog Estimates
Backlog Estimate
Classification
Total Units
Low Estimate
Only Slum Households
3.9 million
Middle Estimate
Only overcrowded units
7.5 million
High Estimate
Non-home ownership, reported
by BPS and MPWH
17.2 million
GoI sets Satu Juta Rumah Annual Housing Target in 2015
• GoI Housing Budget of ~21 T IDR (~0.2% GDP) in 2016
• Conservative relative to peer countries: Thailand at
2.2% GDP and Philippines of 0.3% GDP
• Inadequate to meet 1M housing units target
• On the housing finance subsidy side - FLPP:
• 2015: Spending of ~6T IDR delivered 90,000 units
• 2016: Budget of ~13.2T IDR expected ~200,000 units
• On the housing supply side - BSPS:
• 2015: Spending of ~1.2T IDR only 83,000 units
• 2016: Budget of ~1.4T IDR to deliver 95,000 units
12000
10000
8000
6000
4000
2000
0
2012
2013
FLPP
2014
BSPS
2015
2016
Others
Housing Budget Allocation for Different
Housing Programs (in IDR B)
Increased public spending cannot fill the gap to 1M Homes:
Need efficiency of spending and massive mobilization of private sector participation
Only the Top 2 Deciles of Income Distribution are Well Served; 5th to 8th
Deciles Underserved and Mostly by One Bank
*Sources: BI Residential Property for Primary Houses, MPWH data and World Bank Assumptions
Decile
9-10
6 Banks
@ Avg 500M IDR;
~
K Loa s
76% Share
Decile
5-8
BTN
@ Avg 100M IDR;
~7 K Loa s
98% Share
FLPP
Product
(Formal Income)
Decile
1-4
Gaps:
Middle Low
Income & NonFixed
UNSERVED
*Mortgage Loan Origination of ~80 T IDR in 2015
No Housing Finance Available for Non-Fixed and