CONAVI

CONAVI
MEXICAN HOUSING
OUTLOOK
February 2011
Outlook
Global economic crisis not only did not affect long term
growth within the Mexican Housing Sector, but it helped as
an accelerator to consolidate different processes:
A. A strong and robust mortgage origination
B. Housing production recovery, under sustainable basis
C. Consolidation of the housing production financing,
due to the banks bigger participation and the
strengthening of no bank banks
Outlook
Global economic crisis not only did not affect long term
growth within the Mexican Housing Sector, but it helped as
an accelerator to consolidate different processes:
A. A strong and robust mortgage origination
B. Housing production recovery, under sustainable basis
C. Consolidation of the housing production financing,
due to the banks bigger participation and the
strengthening of No Bank Banks
Strong and robust mortgage origination
Even though the crisis made 2008 the best year in history, two
years away, Mexican Housing Sector remains dynamic and
healthy, with a market value around US$ 20,000 million.
Figures in million US dollars
1,200,000
40,000
35,000
1,000,000
30,000
800,000
25,000
600,000
20,000
15,000
400,000
10,000
200,000
5,000
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
0
1993
0
1992
F
i
n
a
n
c
i
n
g
s
I
n
v
e
s
t
m
e
n
t
Strong and robust mortgage origination
2011
•Investment range between:
US $21,000 to US $ 23,000
•Infonavit and Fovissste will
provide 7 out of 10 mortgages
Mortgages
•265,000 subsidies
Subsidies
•765,000 mortgages
Entity
Baseline Scenario
Likely Scenario
#
$
#
$
480,000
8,692
515,000
9,987
90,000
2,450
100,000
2,722
158,600
8,502
161,910
8,907
Other
Entities
36,099
318
36,099
318
SUBTOTAL
764,699
19,962
813,009
21,934
170,000
430
170,000
430
94,852
182
94,852
182
264,852
612
264,852
612
SUBTOTAL
TOTAL
1,029,551
81,575
GRAND TOTAL 1,111,126
Figures in million US Dollars
Other Entities Include: CFE, Fonacot, Habitat, Issfam, Orevis, PET, Pemex, y PEFVM.
Source CONAVI
20,574 1,077,861 22,548
449
81,575
449
21,023 1,159,436 22,995
Strong and robust mortgage origination
Credit risk management best practices are already in place, making
portfolio quality a minor issue to deal with during the crisis period.
Default Rate %
*Conavi estimated figures for 2011 - 2014
Source : Banxico
Strong and robust mortgage origination
• Mortgage securitization was indifferent to the crisis.
• Main RMBS issuers are Fovissste (T-Fovis), Infonavit (Cedevis)
and Hipotecaria Total (BonHitos).
$2,959
$2,857
$2,960
$2,936
2007
2008
2009
2010
$1,498
$381
$497
2004
2005
$48
2003
2006
Figures in million dollars
Source: CONAVI with data from INFONAVIT, FOVISSSTE, SHF, HITO.
Outlook
Global economic crisis not only did not affect long term
growth within the Mexican Housing Sector, but it helped as
an accelerator to consolidate different processes:
A. A strong and robust mortgage origination
B. Housing production recovery, under sustainable
basis
C. Consolidation of the housing production financing,
due to the banks bigger participation and the
strengthening of No Bank Banks
Housing production recovery, under sustainable basis
New Houses inventory and inventories replacement got recovered
during 2010, supported in the low income housing segment (value
below US$40,000).
Inventories
Start Homes
(houses)
(anual variation)
160,000
150%
140,000
100%
120,000
50%
100,000
80,000
0%
60,000
-50%
Jan - Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
10
40,000
-100%
20,000
2010 vs 2009
Jan-07
Jan-08
Jan-09
<=20,000
$20,001 to $40,000
$89,001 a $202,000
> $202,001
Source: Softec
Jan-10
Dec-10
$40,001 a $89,000
Source: RUV
2010 vs 2008
Housing production recovery, under sustainable basis
Healthy depuration in the number of housing developers after de
crisis. Professional players have remained strong.
Number of Developers
Market Share
Homex
8.5%
1,762
Geo
8.5%
1,417
1,364
1,156
Urbi
6.3%
1,159
1,049
934
Ara
3.4%
72%
1.1%
0.2%
Sare
Hogar
Others
2004
2005
2006
2007
2008
2009
2010
*deeded units
Source: RUV / Infonavit
Housing production recovery, under sustainable basis
Public policy succeed in bringing gradually sustainable guidelines
for territorial and urban planning and enviroment friendly
housing edification.
i. DUIS as a new model for building cities, not only houses
ii. Green Mortgage already as an industry standard
iii. COP 16, as a benchmark for bringing international green
funds for the sector
Sustainable Urban Developments (DUIS)
Valle San Pedro, Tijuana, B.C.
•
Estimated
investment
US$7,531
millions
Includes 180,000 houses to be
build over the next 20 years
Walking areas
Stores
Sub urban center
Puerta de Anza, Nogales, Son
• 28,700 houses
Access
Recreational
areas
Parking
Sport fields
Recreational
areas
Dúplex 9X15
Stores
Cuádruplex14 X15
El Rehilete, Villagrán, Gto
•
11,688 houses
Villa El Cielo, Villahermosa, Tab.
• 30,000 houses
Green mortgage
Green Mortgages 2007-2010
Total 256,881
151,777
103,380
68,088
Subsidized
593
2007
Unsubsidized
1,131
2008
36,124
67,256
2009
83,689
2010
Outlook
Global economic crisis not only did not affect long term
growth within the Mexican Housing Sector, but it helped as
an accelerator to consolidate different processes:
A. A strong and robust mortgage origination
B. Housing production recovery, under sustainable basis
C. Consolidation of the housing production financing,
due to the banks bigger participation and the
strengthening of No Bank Banks
Consolidation of the housing production financing
• Global economic crisis evidenced weak players within the
housing financing, which are not anymore in the sector
• The larger Developers have accesed the Capital Markets,
Banks have increase their participation and the healthy Non
Bank Banks have strengthened their financial condition and
will receive funding from SHF
Bridge loans
(% Investment)
20%
26%
34%
66%
74%
80%
2008
2009
2010
Banks
Non BB / SHF
*does not include the funding obtained from capital markets
Federal Public Policy Guidelines
1. Develop the credit supply for the non-wage earner , non affiliated to
social security population.
•
•
•
Saving schemes
New credit/subsidy products
New financial intermediaries
2. Facilitate proper banking schemes for the population who is not entitled
to a housing program, so they can migrate to existing programs.
•
•
State and municipal goverment employees
Domestic workers
3. Develop new alternatives to the housing needs of low income population.
•
•
Housing improvement and enlargement
House rental
4. Finance projects that promotes and consolidates a Sustainable Housing
Public Policy: territorial planing, urban planing and building sustainable
housing.
•
•
DUIS
Ecotechnologies: Green Mortgage
Final remarks
A. Mortage supply
STRONG
B. Housing demand
STRONG
C. Housing financing
STRONG
D. Sustainable housing production
IN PLACE
E. Federal public policy supporting market
IN PLACE
F. Credit risk best practices
IN PLACE
Investment Housing Menu
www.conavi.gob.mx
CONAVI
Thank you…
February 2011