Asian Housing Finance

The story of housing finance in East and Southeast Asia is one of diverse experiences representing a broad spectrum of development across multiple countries. Beginning with post-WWII and Korean War reconstruction, these Asian countries experimented with social and economic planning, with varying degrees of success. East Asian “tigers” experienced high levels of development and economic growth, while several Southeast Asian countries struggled with poverty, growing slum populations, and the aftermath of the Vietnam War. Strong regional growth in the 1980s and 1990s was stymied by the 1997 East Asian financial crisis, which was ultimately the catalyst for a number of government initiatives in response to the economic shock. Securitization and mortgage backed securities have become the dominant approach to economic stability through the housing market, but a number of structural challenges and trends exist. These challenges and trends include decentralization, urbanization, and the need to house people at the lower ends of the market.

During the past century, East and Southeast Asian countries have generally experienced policy shifts from centrally planned to market based economies, from supply to demandside housing policies, and from housing as a need to housing as an investment. The increased role of local governments and the private sector has resulted in a sophisticated housing industry, complete with specialization of housing and financial sector actors.