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Singapore, Malaysia, And Thailand Post Flat To Declining Housing Prices, Can The Philippines And Indonesia Be Not Far Behind? - 1st Qtr 2014

|Includes: CKGOY, iShares MSCI Philippines ETF (EPHE)

Singapore, Malaysia, and Thailand Post Flat to Declining Housing Prices, Can the Philippines and Indonesia be Not Far Behind? - 1st Qtr 2014

Almost all countries discussed in this blog post, with the exception of Thailand, have been experiencing rapid growth in home prices that have outstripped inflation by a wide margin. The gap between home prices and their inflation adjusted levels are at the widest ever, particularly in Singapore and the Philippines.

Singapore

Singapore's home prices slid for a second straight quarter, which, according to Bloomberg, is the longest losing streak in five years. Home prices are still 84% above their year end 2004 levels.

Malaysia

Neighboring Malaysia's House Price Index actually topped out at 135.44% in the second quarter of 2011 and has posted a 3.37% decline since then to 130.87% as of the fourth quarter of 2013. In the first quarter of 2014, home prices rebounded to 133.03%, reducing the decline from the peak to just 1.78%. Home prices are just 33.03% above their year end 2004 levels.

Thailand

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. In the first quarter of 2014, home prices have rebounded to 102.13%, or 2.13% higher than its year-end 2004 levels, way below its expected inflation adjusted levels.

Indonesia

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. In the first quarter of 2014, home prices have climbed an additional 2.56% to reach 130.36%. Since the first quarter of 2007, home prices have risen 30.36%. Indonesian Home Prices, like Thailand, have lagged inflation since 2007.

Philippines

Philippine house price index stands at 199.50% at the end of the first quarter 2014 or almost 100.00% above their year-end 2004 levels. 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.