Download 2009 - Homex

Asociación Hipotecaria
Mexicana
Mexican Housing Day
2010
José Manuel Rivero Andreu
President
Mexican Mortgage Association
February 2010
Associates and Affiliates
Associates
Associates
Associates
Banco del Bajío
GE Money
Santander
Banorte
GMAC Hipotecaria
Scotiabank
Banamex
Hip. Su Casita
SHF
Bancomer
Hip. Casa Mexicana
Hipotecaria Nacional
Hip. Independiente
Banregio
Hip. Vértice
ANNM
Corporación Hipotecaria
HSBC
Cibergestion
Crédito Inmobiliario
Inbursa
Concord Servicing
Crédito y Casa
Infonavit
Hito
Fincasa
ING Hipotecaria
Tinsa
Ixe
Metrofinanciera
Fovissste
Genworth Financial
Patrimonio
Affiliates
Content
• Housing Investment
• Mortgage Loans Performance
• Construction Lending
• 2010 Forecast and Conclusions
3
Housing Investment
Housing Industry in Mexico has been an important growth factor in
the economy
economy..
(Billion Pesos at 2009 Prices)
Annual Growth rate of investment in real terms during last decade,
decade,
has been 15.2% versus a 2.5% of GDP.
Source: BBVA Bancomer with Presidencia de la República data
4
Housing Investment
Such outstanding growth rate during last decade was mainly due to
to::
Macroeconomic Stability (Low rate of inflation)
inflation)
Ample availability of funding and debt in the markets
markets..
Low interest rate and peso fixed rate mortgages
mortgages..
Diversification of financial intermediaries and products.
Role of Housing agencies (Infonavit
(Infonavit,, Fovissste)
Fovissste)
Active Participation of Home Builders
Demographic Bonus
5
Demographic Bonus
Housing needs of the population in Mexico,
Mexico, the so called “Bono
Demografico”,
Demografico
”, will increase substantially in the next decades.
decades.
Mexico Demographics
1950-2050
Number of family members for each 100 persons
Total
Young Population
“Bono Demografico”
Older Population
Source: Estimates of the Consejo Nacional de Población
6
Content
• Housing Investment
• Mortgage Loans Performance
• Construction Lending
• 2010 Forecast and Conclusions
7
Mortgage Loans Performance
In spite of world economic recession and a 7% fall of GDP in our country
mortgage activity in Mexico had a better performance than expected.
expected.
771,974
677,594
640,846
566,810
NUMBER OF MORTGAGE LOANS
NUMBER OF HOUSES
2008
Only includes Acquisition
2009
Source: AHM with data of Infonavit, Fovissste, Banks, Sofoles/Sofomes
8
Mortgage Loans Performance
Fovissste,, Banks and Infonavit led the market
Fovissste
494,073
447,481
187,761
90,140
130,031
100,082
FOVISSSTE
PRIVATE SECTOR
2008
Private Sector: Banks and Sofoles/Sofomes
Only includes Acquisition
INFONAVIT
2009
Source: AHM
9
Mortgage Loans Performance
Amount of mortgage loans in mexican pesos was lower due to reduced
levels of demand and a shift to low income housing
housing..
Amount of Mortgage Loans
(Millions of Pesos)
231,569
2008
Only includes Acquisition
217,784
2009
Source: AHM
10
Structure of Mortgage Loans by Sector
Most participants in the sector increased their market penetration in 2009
at the expense of Sofoles/
Sofoles/Sofomes
Sofomes..
2009
2008
Fovissste
12%
Banks
11%
Fovissste
15%
Banks
14%
Sofoles/
Sofomes
5%
Sofoles/
Sofomes
13%
Infonavit
Infonavit
64%
66%
Source: AHM
11
Mortgage Loan Delinquencies
Delinquencies..
In spite of higher unemployment in the country, loan delinquencies do
not represent an undo risk
risk..
Banks
4.40%
Sofoles/Sofomes
7.25%
Infonavit
4.81%
Weighted Average
4.74%
Units
Source: AHM
•Agressive restructuring programs have mitigated delinquencies
delinquencies..
•Unemployment insurance and mortgage insurance have played a
relevant role in reducing severity
severity..
•Loan provisions are in general adequate to cover delinquencies and
potential write
write--offs.
offs.
12
Loan Delinquencies
Delinquencies..
Delinquency rates
(180+ days)
Delinquencies by type of loan
•
Joint programs Apoyo Infonavit
and Cofinavit, show better
delinquency rates than nonInfonavit related loans (mercado
abierto)
•
This performance trend is
consistently observed among
commercial banks and
mortgage banks (Sofols /
Sofoms)
Source: Fitch, “Mexican RMBS performance update”, Sept. 09
13
Loan Delinquencies
Delinquencies..
Inflation linked portfolio and
mortgage insurance
•
Cumulative defaults (180+ days)
in mortgage banks (Sofols / Sofoms)
Delinquency rates for inflation
linked (UDI) portfolio is almost
twice than that for peso
denominated loans.
•
Mortgage insurance becomes
particularly relevant for inflation
linked portfolio in order to limit
potential losses and increase
profitability (ROE)
Source: AHM estimates
14
Content
• Housing Investment
• Mortgage Loans Performance
• Construction Lending
• 2010 Forecast and Conclusions
15
Construction Lending
Bank lending for construction was slightly lower than previous year
however Sofoles/
Sofoles/Sofomes
Sofomes were severly impacted by lack of funding in
the markets
markets..
60,000
51,822
Million of Pesos
50,000
40,000
18,247
34,985
7,769
30,000
20,000
33,575
27,216
10,000
0
2008
Banks
2009
Sofoles/Sofomes
Source: AHM
16
Construction Lending
Number of houses financed during 2009 fell by 50,000 homes,
homes, which
offers aditional business opportunities for home builders this year
250,000
195,885
200,000
Homes
146,879
150,000
70,177
30,223
100,000
125,708
116,656
2008
2009
50,000
0
Banks
Sofoles/Sofomes
Source: AHM
17
Construction Lending
Low income housing grew in 2009 at a higher rate than other sectors
35
25
15
5
-5
-15
2006
2007
2008
Low income
2009
Total
Source : BBVA Bancomer with Softec Data
18
Registry of Housing Supply (RUV)
AHM has signed an agreement with INFONAVIT to publicize monthly in its Web
page (www.
(www.ahm.
ahm.org.
org.mx) the statistics of new homes being built by home
builders registered.
registered.
New Homes Registry (RUV)
New Homes Registry (RUV) is a system and data base where all homes being built
by developers are registered before construction begins and until the new homes are
finish and finally sold
sold..
General Purpose
Purpose::
The objective is to standardize the registry of total homes being constructed in the
country, so financial institutions and other interested parties could have information of
the home supply that is complete, useful, reliable and on time.
time.
Scope::
Scope
RUV reflects the total amount of new homes being built and their location, that are
subject to a firm take out by individual mortgages granted by the housing agencies,
mainly Infonavit and Fovissste.
Fovissste.
19
Housing Supply (RUV)
Home Supply by State
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
Infonavit Availability
Other Entities Availability
Estimated Real Home Supply Infonavit 2010
Source: Infonavit
20
Content
• Housing Investment
• Mortgage Loans Performance
• Construction Lending
• 2010 Forecast and Conclusions
21
2010 Mortgage Loans Forecast
Mortgage Loans
Private Sector
2009
#
$
Forecast 2010
#
$
Acquisition
130,031
70,011.39
157,000
74,111.68
Improvements and Liquidity
11,804
5,445.83
13,000
5,888.32
Total Private Sector
141,835
75,457.22
170,000
80,000.00
Million of Pesos
22
2010 Construction Lending Forecast
New Construction Loans
Private Sector
Total
# Projects
2009
Contract
Value
($)
996 34,985.08
Forecast 2010
Contract
# Homes # Projects Value
# Homes
($)
146,879
1,078 38,364.39
160,392
Million of Pesos
23
Conclusions
• Mortgage industry in Mexico proved its strength in this difficult times
and also identified areas of opportunity, in spite of economic downturn
and unemployment.
• Financial Institutions have strenghthened their origination loan
process and loan servicing standards, including collection policies to
cope with the economic situation.
• Funding has been a limitation for some sectors, like Sofoles and
Sofomes,, both for the origination of mortgage loans and construction
Sofomes
lending.
• Financing of construction of new homes represents a challenge, but
also an opportunity for new business.
24
Conclusions
• The most efficient financial institutions with solid capitalization will take
advantage of the opportunities in the Housing Sector during this year
• Home Builders with such characteristics will increase as well their
market share
25