This paper examines the role of government-supported housing finance agencies in seven Asian countries - Hong Kong, India, Japan, Korea, Malaysia, Singapore and Thailand. The nature and size of the government subsidies received by these agencies are examined as well as their distribution among households, financial institutions and the agencies themselves. The paper finds:
- varying but small levels of government support to housing finance agencies
- transfers of most of the subsidies to either households or financial institutions
- larger transfers to households by agencies that participate directly in primary housing finance markets.
However, given the rapidly growing presence of housing agencies in their domestic markets, they might distort competition, crowd out private lenders and mortgage insurers and ultimately hinder market development. Also, scaling back government involvement tends to be more difficult than introducing it and only very few Asian housing agencies have exit strategies.