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Singapore, Malaysia, And Thailand Post Flat To Declining Housing Prices, Can The Philippines And Indonesia Be Not Far Behind?

|Includes: EIDO, iShares MSCI Philippines ETF (EPHE), EWM, EWS, THD


Singapore's home prices slid for a third straight quarter, which, according to Bloomberg, is the longest losing streak in five years. Home prices are still 86% above their year end 2004 levels. As can be seen from the chart below, Singapore's home prices have outstripped inflation by a wide margin.


Neighboring Malaysia's House Price Index actually topped out at 141.25% in the second quarter of 2012 and has posted a 3.37% decline since then to 136.48% as of the fourth quarter of 2013. Home prices are just 36.48% above their year end 2004 levels. Malaysian home prices tracked inflation for some time between 2004 and late 2009. However, beginning in 2010, house prices outstripped inflation and have never looked back.


In Thailand, which has been experiencing political turmoil for some time, home prices have remained essentially flat since the end of 2004. Home Prices ended 2013 with the index at 100.54%, just 054% higher than the end of 2004, but showing a substantial recovery since the recent low of 74.08% posted in the third quarter of 2009. Thailand, along with Indonesia, is one of the few ASEAN countries whose home prices have significantly lagged inflation, particularly since mid 2006.


Meanwhile in Indonesia, home prices have showed no signs of slowing down their upward trajectory. In fact, prices seem to have gone parabolic, climbing 4.63% in the last quarter of 2013, from a base of 121.49% as of the third quarter of 2013 to 127.11% as of year end 2013. Since 2006, home prices have risen 36.48%. Indonesian home prices, like in Thailand, have lagged inflation since 2007.


Philippine house price index stands at 196.65% at year end 2013, 96.65% above their year-end 2004 levels and have consistently outstripped inflation by a wide margin. Philippine home prices have posted the largest 10 year gains among all the countries considered in this blog post. Like Indonesia, home prices have so far no signs of slowing down their upward trajectory for the foreseeable future. The question is, is this momentum sustainable? Or will the Philippines and Indonesia follow its ASEAN neighbors, Singapore, Malaysia, and Thailand, in exhibiting plateauing or declining house prices? That remains to be seen.