1990s
Summary
Financial Crisis
Housing markets are shaken by the East Asian Financial Crisis in 1997. Deregulation and financial innovations become more widespread throughout Asia as commercial banks become active in mortgage markets, and the use of mortgage backed securities grows.
Global Context
Government As Regulator
Globalization becomes a powerful trend, and government stimulation/regulation of market forces grows at national and local levels. Rapid economic growth in cities around the world leads to impressive housing and real estate developments that highlight social and economic disparities.
Influences
- Real estate appreciates rapidly in Hong Kong, Indonesia, Singapore and Thailand in early 1990s
- Price corrections help induce the East Asian Financial Crisis in 1997
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Policies and Programs
- China phases out provision of housing by work units, selling apartments on a cost recovery basis
- In Singapore, private housing development encouraged
- Philippines decentralizes shelter and urban development policies
- Korea liberalizes interest rates and deregulates the financial system
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Methods, Tools, and Practices
- Philippines applies public and private participation models in municipal finance planning
- In Japan, the Sanwa Bank originates the first Residential Mortgage Backed Security
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Lessons and Outcomes
- Commercial banks and other private financial institutions gain importance in mortgage loan origination
- More diversified mortgage products become available
- In Korea, most households are able to own homes via mortgage loans
- Mortgage-backed securitization becomes established in many Asian economies
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