IDEAS home Printed from https://ideas.repec.org/a/ire/issued/v20n012017p105-126.html

Global Liquidity, Capital Inflows and House Prices in ASEAN Economies

Author

Listed:
  • Matthew S. Yiu

    (Hong Kong Monetary Authority and ASEAN+3 Macroeconomic Research Office)

  • Sahminan Sahminan

    (Bank Indonesia and ASEAN+3 Macroeconomic Research Office)

Abstract

The quantitative easing policy adopted by the advanced economies since 2009 has led to an abundance in global liquidity. In the same period, the ASEAN-5 economies (Indonesia, Malaysia, the Philippines, Singapore and Thailand) have recorded strong capital inflows, particularly portfolio inflows. The asset prices, in particular, the house prices of these economies, have also experienced excess buoyancy. In this paper, the relationships among global liquidity, house prices and capital flows are studied. Empirically, capital inflows have a positive effect on the residential house prices of Indonesia, Malaysia, the Philippines and Singapore. After accounting for their own domestic demand (by using real GDP growth as a proxy), the capital inflows still have a positive impact in Indonesia and Singapore. The authorities of these economies have implemented similar macroprudential measures to safeguard financial stability and cool down speculative activities. The effectiveness of the measures is mainly the reduction in the transaction volume.

Suggested Citation

  • Matthew S. Yiu & Sahminan Sahminan, 2017. "Global Liquidity, Capital Inflows and House Prices in ASEAN Economies," International Real Estate Review, Global Social Science Institute, vol. 20(1), pages 105-126.
    • Handle: RePEc:ire:issued:v:20:n:01:2017:p:105-126
    as

    Download full text from publisher

    File URL: https://www.gssinst.org/irer/wp-content/uploads/2020/10/v20n1-global-liquidity-capital-inflows-and-house-prices-in-asean-economics.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mahjus Ekananda & Tulus Suryanto, 2021. "The Influence of Global Financial Liquidity on the Indonesian Economy: Dynamic Analysis with Threshold VAR," Economies, MDPI, vol. 9(4), pages 1-20, October.
    2. Yin-Wong Cheung & Kenneth K. Chow & Matthew S. Yiu, 2017. "Effects of capital flow on the equity and housing markets in Hong Kong," Pacific Economic Review, Wiley Blackwell, vol. 22(3), pages 332-349, August.
    3. Christiane Kneer & Alexander Raabe, 2024. "Tracking Foreign Capital: The Effect of Capital Inflows on Bank Lending in the UK," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 72(4), pages 1279-1319, December.
    4. Wei Sun & Matthew S. Yiu, 2023. "Financial conditions and the well‐being of the real estate sector—A bottom‐up default analysis on five ASEAN economies," Contemporary Economic Policy, Western Economic Association International, vol. 41(1), pages 41-60, January.
    5. Hwee Kwan Chow & Taojun Xie, 2016. "Are House Prices Driven by Capital Flows? Evidence from Singapore," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 7(01), pages 1-21, February.
    6. Alexander Raabe & Christiane Kneer, 2019. "Tracking Foreign Capital: The Effect of Capital Inflows on Bank Lending in the UK," IHEID Working Papers 10-2019, Economics Section, The Graduate Institute of International Studies.
    7. Farhad Taghizadeh-Hesary & Naoyuki Yoshino & Alvin Chiu, 2019. "Internal and External Determinants of Housing Price Booms in Hong Kong, China," ADBI Working Papers 948, Asian Development Bank Institute.
    8. Hoang-Anh Le, 2025. "The impact of institutional quality on the relation between FDI and house prices in ASEAN emerging countries," Papers 2504.13459, arXiv.org.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ire:issued:v:20:n:01:2017:p:105-126. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: IRER Graduate Assistant/Webmaster (email available below). General contact details of provider: https://www.gssinst.org/gssinst/index.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.