Interim Review of Crystal Ball Prediction

By Centauri78

If you have been following the blog, you may recall a prediction that I made a while back in August 2012 with regard to the residential property market, as measured by the URA housing price index. The prediction was for prices to rise for a couple of years from the beginning of 2012, and for prices to stagnate thereafter. Now that the first period of the prediction is over, let’s take a look as to where the market is now.

Price Index
1Q/12 2Q/12 3Q/12 4Q/12 1Q/13 2Q/13 3Q/13 4Q/13
All Residential 206.0 206.9 208.2 212.0 213.2 215.4 216.3 214.3
Landed Property 235.0 236.0 238.7 243.0 244.1 244.9 245.6 243.1
Detached 247.1 246.1 251.0 255.8 256.7 255.9 252.5 250.3
Semi-detached 218.9 220.2 221.6 227.9 228.2 227.1 229.5 224.1
Terrace 233.1 236.0 237.8 240.6 242.7 246.4 250.1 249.1
Non-Landed Property 198.1 199.0 200.0 203.5 205.0 208.0 209.2 207.4
Apartment 210.9 212.9 215.3 220.6 222.7 226.2 225.6 222.2
Condominium 192.9 193.2 193.6 196.0 197.1 199.9 201.9 201.0

So far the prediction is quite accurate, with the pricing index up year-on-year. At the end of 2013, it looks like the cooling measures have taken hold, together with the general buyers’ fatigue associated with persistent high prices, leading to a small dip of about 1% from 3Q13.

Going forward, I would expect the same sort of lethargy to continue, with a slight downward bias from the knock-on effects of the large supply of HDBs coming online bringing down public housing. All in all, looking really good for my prediction. We shall revisit this again at a later date.

Disclaimer:
Centauri78 is not a licensed financial advisor. The information contained here is purely personal opinion, and whilst I make every attempt to ensure the accuracy and reliability of the information, this information should not be relied upon as a substitute for formal advice or as basis for investment.

Advertisements

3 thoughts on “Interim Review of Crystal Ball Prediction

    1. It could well be that prices continue to slide, but I don’t really foresee an exodus from the property market that would result in a major crash. Remember, crashes are inherently bad for the government, so they would want to keep it as supported as possible. That being said, the magnitude of the decline is not as important as the gradient of decline. If the market continues to go down gradually, policy is unlikely to change drastically.

      TDSR will continue to be a drag on transaction volumes, but I think it is an important exercise in prudence, which will maintain the integrity of the property market. However, the magnitude of the TDSR could bear a little tweaking.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s