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, Hong Kong, and the Philippines.
Singapore's home prices have now been declining for thirteen straight quarters, which, according to Bloomberg, is the longest losing streak in five years. Home prices are still 68.93% above their year-end 2004 levels. Overall prices levels, as measured by inflation have just increased by 28.97% since year end 2004. In other words, for the past ten years, Singaporean home prices have outpaced inflation by almost than 40 percentage points.
Neighboring Malaysia's House Price Index now stands at 235.06 as of the third quarter 2016, 135.06% higher than year-end 2004 levels. General price levels as of the third quarter 2016 are only around 34.15% higher than their year end 2004 levels.
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 0.54% 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. Since 2013, home prices have rebounded to 114.69 or 14.69% higher than its year-end 2004 levels, way below its expected inflation adjusted levels. General Price levels are 34.09% above their year-end 2004 levels. In other words, Thailand Home Prices have lagged inflation by as much as 19.40% since their year-end 2004 levels.
Meanwhile, in Indonesia, home prices have shown no signs of slowing down their upward trajectory. In fact, prices are now at 146.88 or 46.88% above their first quarter 2007 levels. Inflation, however, has marched higher. General prices are 75.92% above first quarter 2007 levels, lagging inflation by 29.04%.
Philippine house price index stands at 218.47% as of year-end 2016 or over 118.48% above their year-end 2004 levels. Philippine home prices have posted one of the largest 10 year gains among all the countries considered in this blog post. Philippine home prices have outstripped inflation by more than fifty percentage points. General prices stood at 163.35% or 63.35% above their year-end 2004 levels. Like Indonesia, Philippine 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.