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Wednesday, March 7, 2018

Singapore Breaks its Controlled Slide of House Prices While Philippine House Prices Hit New Highs in 2017 Q4

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 which have been declining for fourteen straight quarters, have resumed their upward trend. Home prices have rebounded by 1.51% off the low of 166.15 as of the second quarter of 2017. Howevery, home prices are still  68.66% above their year-end 2004 levels. Overall prices levels, as measured by inflation have just increased by 29.67% 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 267.28 as of the third quarter 2017, 167.28% higher than year-end 1998 levels.  General price levels as of the third quarter 2017 are only around 53.54% higher than their year-end 1998 levels.


 Thailand's home prices have still not kept up with inflation. As of the fourth quarter of 2017, home prices are just 19.22% above their year-end 2004 levels, while the inflation index is 34.99% above its 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 150.44 as of the fourth quarter of 2017 or 50.44% above their first quarter 2001 levels. Inflation, however, has marched higher. General prices are 82.71% above their first quarter 2007 levels. House prices, therefore, have lagged inflation by 32.27%.


Philippine house price index stands at 241.08% as of the fourth quarter 2017 or over 141.08% 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 over seventy percentage points.  General prices stood at 168.54% or 68.54% 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.

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