AHML’s role in housing market development and providing
housing to low-income families in Russia
2013
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Russian mortgage market dynamics
Post-crisis recovery of the mortgage market
656 153 380 717 1.032 16,9% 11,9% 14,6% 17,6% 20,9% 0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 0 200 400 600 800 1000 1200 2008 2009 2010 2011 2012 Объем выданных ипотечных кредитов, млрд руб. Доля сделок с ипотекой на рынке жилья, % (правая шкала)* 14,9% 11,4% 12,9% 10,5% 11,0% 11,5% 12,0% 12,5% 13,0% 13,5% 14,0% 14,5% 15,0% 15,5%
Monthly ruble mortgage loan rates, %
Mortgage loans issued, bln. RUR Share of deals in the housing market
involving mortgage loans, % (right scale)*
09 ar 09 ay 09 Jul 09 ep 09 ov 09 10 ar 10 ay 10 Jul 10 ep 10 ov 10 11 ar 11 ay 11 Jul 11 ep 11 ov 11 12 ar 12 ay 12 Jul 12 ep 12 ov 12 13 ar 13
Housing affordability
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Housing market price index and inflation, %
Housing affordability index (2005=100%), % 144 139 135 131 116 117 117 115 105 101 98 97 96 96 98 98 104 105 105 106 109 110 110 110 109 148 145 139 134 119 120 121 120 106 100 96 95 93 95 97 98 106 106 107 108 109 111 113 115 110 80 90 100 110 120 130 140 150 160
I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I
2007 2008 2009 2010 2011 2012 2013 Inflation, YTD , % YOY
Primary market, YTD, % YOY Secondary market, YTD, % YOY
70% 80% 90% 100% 110% 120% 130% 140%
Primary market Secondary market
2007 2008 2009 2010 2011 2012 2013 2006
11% 13%
76%
Market demand
Need, but cannot buy
Do not plan to buy housing
72% 15%
10% 3%
Own housing
Municipal or state housing
Rent from an individual
Rent from a legal entity
Demand for housing over the next five years, as self-assessed by the population
Households distribution by type of tenure
Target groups of the housing policy
Development of subsidies for households of group 2 and development of lease (including social
lease) as an alternative to housing ownership for not solvent households of groups 3 and 4.
5 TARGET GROUP NEED % of total in need of housing under 13 sq.m. per person under 20 sq.m. per person
Group 1 - property is available for purchase on
the market with a mortgage loan 16,30% 4,60% 11,80%
Group 2 – the market provides for an extension
of living space with use of a mortgage loan 14,40% 4,90% 9,50%
Group 3 – no housing improvement is available on the market, even with a mortgage loan, but the households themselves do not belong to the lowest-income category
53,20% 20,20% 33,10%
Group 4 – the lowest-income households 16,00% 8,00% 8,00%
Main types of government housing subsidies
FEDERAL PROGRAMS
In the framework of the Federal Target Program "Housing":
- Downpayment subsidies for young families, young teachers
- State Housing Certificates (discharged military personnel, firemen, migrants)
Rental subsidies for certain categories of the population (military personnel,
employees of national security agencies, etc.)
Maternal subsidy (for down payment, loan repayment)
REGIONAL PROGRAMS
Interest rate subsidy programs (e.g. Kaliningrad – subsidy for house purchase in the
primary market granted to residents of the Kaliningrad Region in need of housing)
Programs that take over a part of the rental payments (e.g. for health care workers,
AHML summary
Providing liquidity to other market participants by purchasing of mortgage loans and mortgage-backed securities
Providing targeted loans for housing
construction
Increasing availability of mortgage loans for certain categories of citizens
Credit support through provision of guarantees for issues of mortgage-backed securities
Development of mortgage insurance market
Source : AHML IFRS
Key areas of activity
Structure of AHML Group
AHML OJSC Mortgage loans restructuring agency AHML Insurance Company Government
of the Russian Federation
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AHML was founded in 1997 by decision of the Government of the Russian Federation as a national institution for the housing mortgage market development
Fully owned by the government
– Included in the list of strategic enterprises of the Russian Federation
Sovereign investment ratings
– Moody’s: Baa1 (stable outlook)
– Standard & Poor’s: BBB (stable outlook)
Facts
Key financial indicators
bln. RUR 2010 2011 2012 Assets 197.5 268.9 295.8 - Mortgages 131.9 156.8 187.0 - Mortgage-backed securities 4.7 8.0 20.9 Equity 106.9 114.0 121.0 Net profit 7.3 8.0 8.3
AHML standards and programs for certain categories of
population
AHML standards
Key specialty products Military mortgage loan
Maternal subsidy loan Newly built house loan Low-rise housing loan Loan for Young scientists Loan for Young teachers
Loan granting Refinancing / mortgage pool formation Borrowers
Regional operators and Service agents Primary creditor Primary creditor Primary creditor
AHML refinancing system
Mutual funds Mutual funds Other sources of financing Mutual funds Mutual funds Securitization Mutual funds Mutual fundsBonds
Raising funds in the capital
markets
Currency Rubles
Down payment Min 30%
(min. 10% subject to mortgage insurance)
Maximum loan amount
Depends on the region and LTV
Maximum loan period 30 years (loan maturity date must occur no later than the borrower reaches the age of 65)
Payment-to-income ratio
Maximum 45% (the remaining borrower income shall be no less than one minimum living wage per person)
Documents Official confirmation of employment and income
Insurance Property insurance is obligatory, life insurance - optional
Key Principles of Military Mortgage Plan
9 Payments Mortgage holderFederal budget
of the RF
AHML Management Company (individual savings accounts) Borrower Provision of savings contributions to military servicemen is governed by the corresponding Federal Law.
The loan amount does not depend on the military serviceman income.
The plan allows military servicemen to purchase housing with little or no involvement of own funds.
Interest rates under the Military Mortgage Plan are lower than the market rates.
The agency was the first to start implementing the program in 2007 as part of trial implementation. Then, market players – major state and private banks – followed.
Shares of market participants
Rental Housing, AHML’s new activity
MECHANISM:
Long-term mortgage loans to legal entities (housing companies) for the purpose of purchasing rental property
TARGET GROUP:
Governments of regions and towns of Russia, large enterprises, investors in rental housing GOAL:
Creation/ enlargement of the housing rental market by housing companies/ legal entities Increase housing construction volumes
Defuse the housing "queue" problem, reduce social tensions
Create conditions for growth of population migration activity and ensure influx of labor in cost-effective industries and regions
Create conditions for the efficient management of an apartment house by a single owner of all the apartments.
FEATURES:
The product can be combined with federal, regional and local programs for commercial housing development, including:
– preferential allocation of land plots
– financial participation of budgets of all levels
– compensation of interest on infrastructure and construction loans – legal entity mortgage guarantees
AHML Creditor bank
Borrower (lesser and
manager of the Rental Housing)
Real estate developer (with economy-class cost) Government of the territory/ municipality 11
