african union for housing finance conference: housing investment in mauritius

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EXTENDING THE REACH DOWN THE MARKET By Mr M SEETOHUL MANAGING DIRECTOR MAURITIUS HOUSING CO LTD HOUSING INVESTMENT IN MAURITIUS A NEW LANDSCAPE OF HOUSING FINANCE INVESTORS

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Manilall Seetohul, Mauritius Housing Company. With more than 46 cities in Africa swelling to populations of a million people or more — and 17 of the world's 100 fastest-growing cities located in Africa — there is an acute need to develop housing solutions for so many urban residents. But raising the capital to meet that growing demand for housing remains a significant challenge. In 2013, the African Union for Housing Finance (AUHF) will host a conference under the theme "Raising Capital for Housing Finance.” The Africa-China Urban Initiative will organize a conference panel discussion on "Understanding (and harnessing) Chinese investment interest." Chinese investment in residential development in Africa is increasingly having an impact and demonstrating a track record of opportunity and experience. Panelists invited include Chinese investors setting out their experiences and expectations for the market and an African corporation that has received Chinese financing. http://urban-africa-china.angonet.org/content/29th-annual-conference-mobilising-capital-housing-finance

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Page 1: African Union for Housing Finance Conference: Housing Investment In Mauritius

EXTENDING THE REACH DOWN THE MARKET

By Mr M SEETOHULMANAGING DIRECTOR MAURITIUS HOUSING CO LTD

HOUSING INVESTMENT IN MAURITIUS

A NEW LANDSCAPE OF HOUSING FINANCE INVESTORS

Page 2: African Union for Housing Finance Conference: Housing Investment In Mauritius

Area 2000 M2 Population 1.3 M

The STAR and KEY of the Indian Ocean

Page 3: African Union for Housing Finance Conference: Housing Investment In Mauritius

OVERVIEW OF KEY ECONOMIC INDICATORS

GDP per capitaUS$9,300

Savings Rate 15.1% Investment Rate 23.0% Inflation Rate 3.9% Key Repo Rate 4.65% Growth rate 3.3% Household ownership 88.9% Owners of Bank A/Cs

80.0% Mortgage Debt to GDP 12.0%

Page 4: African Union for Housing Finance Conference: Housing Investment In Mauritius

KEY PLAYERS IN THE HOUSING AND HOUSING FINANCE MARKET

MINISTRY OF HOUSING AND LAND

MAURITIUS HOUSING COMPANY LTD

NATIONAL HOUSING DEVELOPMENT COMPANY

NATIONAL EMPOWERMENT FOUNDATION

PRIVATE PROPERTY DEVELOPERS

BANKS AND FINANCIAL INSTITUTIONS

Page 5: African Union for Housing Finance Conference: Housing Investment In Mauritius

MINISTRY OF HOUSING AND LAND

Preparation of National Development Strategy

Provide the Framework for local authorities

Devise and Implement housing and land policies/ program

Page 6: African Union for Housing Finance Conference: Housing Investment In Mauritius

* Financing High End Clients

* Property Development Large housing projects

* IRS - Integrated Resort Scheme Foreigners with high net worth Property priced more than USD500,000

Banks & Insurance Companies

Page 7: African Union for Housing Finance Conference: Housing Investment In Mauritius
Page 8: African Union for Housing Finance Conference: Housing Investment In Mauritius

Provider of Housing Finance since 1963

Flexible housing loan products Interest rate as from 6.8% One Stop Shop

Government Sponsored loans Low income group – Max MUR10,000 (USD333) Government Grant of 20% of loan amount up

to a maximum of MUR 33,000 (USD 1,000)

Helped approximately 25% of households to become house owners

MAURITIUS HOUSING COMPANY LTD

Page 9: African Union for Housing Finance Conference: Housing Investment In Mauritius
Page 10: African Union for Housing Finance Conference: Housing Investment In Mauritius

SPECIAL HOUSING SAVINGS AND DEPOSITS SCHEME

PLAN EPARGNE LOGEMENT – PEL JUNIOR PEL SAVER – JPS TERM DEPOSIT

Housing Deposit Certificates (HDC)

ESTATE DEVELOPMENT REGULATED BY THE BANK OF

MAURITIUS

MAURITIUS HOUSING COMPANY LTD

Page 11: African Union for Housing Finance Conference: Housing Investment In Mauritius

ESTATE DEVELOPMENT BY MHC

HARBOUR VIEW I LA TOUR KOENIG

HOUSING PROJET

Page 12: African Union for Housing Finance Conference: Housing Investment In Mauritius

ESTATE DEVELOPMENT BY MHC

Vuillemin Centre IICyberVillage - EBENE

BPML/MHC Project

Page 13: African Union for Housing Finance Conference: Housing Investment In Mauritius

Created in 1991. Low cost housing . Household revenue < MUR 8,500 (USD285)

12,000 units constructed.

500 constructed each year against a demand of 20,000 yearly

The real challenge lies at this level.

SITES AND SERVICESState Land leased to households – Area 50 toises

GRANTSTo cast SLAB - up to MUR 65,000 (USD2100)

To purchase construction materials-Max MUR55,000 (USD 1,700)

NATIONAL HOUSING DEVELOPMENT COMPANY

Page 14: African Union for Housing Finance Conference: Housing Investment In Mauritius

NHDC FLATS

Page 15: African Union for Housing Finance Conference: Housing Investment In Mauritius

Squatting Set up in 2011 Vulnerable Group Integrated Social Development

Programme Core housing units of 32 m2 each Repayment starts as low as MUR 500

(US$16) monthly Social Contract MHC acts as Project Manager and Collecting

agent

NATIONAL EMPOWERMENT FOUNDATION

Page 16: African Union for Housing Finance Conference: Housing Investment In Mauritius

NEF PROJECT AT LA VALETTE VILLAGE - BAMBOUS

Page 17: African Union for Housing Finance Conference: Housing Investment In Mauritius

MAURITIUS CREDIT INFORMATION BUREAU (MCIB)

A central Credit Information Bureau is managed by the Bank of Mauritius.

Forty three participants 18 Banks 18 Leasing and Insurance Companies 5 Non Bank Financial Institutions 3 Utilities MHC and NHDC form part of the

system

Page 18: African Union for Housing Finance Conference: Housing Investment In Mauritius

FUNDING

Page 19: African Union for Housing Finance Conference: Housing Investment In Mauritius

FUNDING

Funds for financing mortgages - a challenging issue.

Borrowing from foreign funding agencies USAID European Development Fund International Bank for Reconstruction and Development

(IBRD) World Bank through the Government of Mauritius Common Wealth Corporation

Borrowing from local banks with government guarantee

Facilities no more available

Page 20: African Union for Housing Finance Conference: Housing Investment In Mauritius

FUNDING

Debentures

Deposits from General public

Internally Generated Funds

Page 21: African Union for Housing Finance Conference: Housing Investment In Mauritius

LEGAL FRAMEWORK FOR CREDITBorrowers Protection Act 2007

Bom guidelines

Basel III

Safeguards for the interests of both lenders & borrowers

Encourages “Responsible Credit”

Page 22: African Union for Housing Finance Conference: Housing Investment In Mauritius

WAY FORWARD

Government Strategy CSR Fund - Culture of Corporate Citizenships Companies to contribute 2% of their book

profit Approved program – Housing included

Housing Development Trust (HDT) Boost social housing-Low and Lower income

groups Funded by HDT, Government and

Beneficiary

Page 23: African Union for Housing Finance Conference: Housing Investment In Mauritius

HOUSING INVESTMENT

A NICHE MARKET FOR INVESTORS

Housing key growth area in growing economies

Meet Investment Expectations – Good return

Easily segmented market

WAY FORWARD

Page 24: African Union for Housing Finance Conference: Housing Investment In Mauritius

WAY FORWARD

CHALLENGES

Managing risks

Maintaining incentives

Securitisation

Page 25: African Union for Housing Finance Conference: Housing Investment In Mauritius

CONCLUSION

HOUSING FINANCE AN ENGINE OF DOMESTIC

GROWTH

HOUSING INVESTMENTA NEW PROFITABLE SOCIAL

INVESTMENT

Page 26: African Union for Housing Finance Conference: Housing Investment In Mauritius

THANK YOU