This March companies are busy preparing sales forecasts for the new financial year. Regarding forecasts, I have said this in my book Behind The Scenes of The Property Market:
“With high uncertainties looming in the global economy, it is doubtful whether anyone can predict what will happen in six months, let alone the full year. Those who claim that they can do so are most likely either fortune-tellers or liars.”
Let me add that sharing speculations with strangers is not the privilege of fortune-tellers and liars, but salespeople too. Honestly, if you were a salesperson, to save your job in the next round of retrenchment, you would also submit an ambitious sales forecast now.
New home sales forecast – Here we go again
On a January EdgeProp article, PropNex said developers will sell 8,000 to 9,000 new units in 2025. ERA made an estimation between 7,000 and 8,000 units. Huttons agreed with a similar guess of 7,000 to 8,000 units.
EdgeProp published a February article with the title “CBRE projects between 7,000 to 8,000 new homes could be sold in 2025, increasing from 2024’s 6,469 units.”
Interestingly, last year’s “CBRE 2024 Singapore Real Estate Market Outlook” also mentioned the same numbers: “CBRE Research expects 7,000 – 8,000 new homes to be sold in 2024, an improvement from the 6,421 units in 2023.”
Is 7,000 to 8,000 units a sophisticated projection, a pure coincidence, or a simple copy and paste from the previous year? In 2024, URA only reported 6,469 total new units sold. Maybe 2025 will also turn out to be 500 to 1,500 units short of CBRE’s forecast?
Don’t worry. To avoid embarrassment, I am not going to highlight one by one the gap between each property agency’s 2024 prediction and the actual volume developers sold. Anyway, during the course of 2024, the agencies had revised downwards their forecasts from a five-digit number to a lower four-digit figure.
“Never mind the numbers are based on gut feel or a wild guess. It is not required to back it up with assumptions, calculations or formula.
There is no consequence for making a wrong prediction. No spokesperson has ever been backtracked to be held responsible for an inaccurate forecast … Anyway, if the market direction changes during the year, they can always flip-flop their position and trim their sail to the wind. “
– Vina Ip, Behind The Scenes of The Property Market
Finding faults with wrong forecasts
At the beginning of every year, the Hong Kong media will backtrack what property players and fortune tellers said the previous year. Then compare their past predictions with what actually happened. People believe this is the best way to test the capabilities of these “experts”. Furthermore, the revelations satisfy those who enjoy seeing others being wrong, or well-known people being embarrassed.
Shih Wing-ching (施永青) is the founder of Hong Kong’s top property agency Centaline (中原地產). In early 2024, he predicted the city’s home prices to rise 5 to 8 percent. Unfortunately, they fell 7.1 percent last year.
When questioned by the local media, Shih replied, “I was bullish about the market. All market players can have their own tick. Most forecasts turn out to be different from reality. We all make wrong predictions for the future.“
Nonetheless, Hong Kong ex-Chief Executive and surveyor Leung Chun-ying (梁振英) wouldn’t let him off the hook.
“Shih is the main shareholder of Hong Kong’s largest property agency and the boss of a local media. He often shared his analyses and predictions of the property market. He is an influential and vested KOL We are highly concerned about the motive of his views. His forecast is accurate or not is another matter. The biggest problem here is the approach and motive behind his forecasts.”
Shih explained, “The market was filled with pessimism in early 2024. I was just making a comparatively more optimistic prediction to balance the pessimism.”
“From now on, Shih and all Centaline agents should begin with this opening line whenever they analyze the property market for their clients and the general public,” suggested Leung.
Singaporeans are forgiving of wrong forecasts
Fortunately, Singaporeans are more courteous. We believe whatever the media reports. Usually, we don’t question any motive or vested interest behind the articles. Above all, our forgiving media never backtrack any past prediction of the spokespersons.
For instance, in 2017 RHB Research projected property prices to rebound 20 percent by 2019. Likewise, Morgan Stanley believed Singapore home prices would double by 2030.
However, in 2019, no one questioned why private home prices barely went up 10 percent. Similarly, we can bet in 2030 no one will ask Morgan Stanley why prices haven’t doubled since 2017.
It is like the weather. Things can be unpredictable.
“Over the years, many of these unfounded forecasts have proved themselves wrong. As time passes and the mistakes of the fortune-tellers forgotten, similar market prophecies come up again with the start of every new year.
If we turned back the clock to the Berkshire Hathaway annual shareholder meeting in 2011, Warren Buffett reminded investors not to pay attention to the media because the media has proved to be most inaccurate when predicting what will happen to the market.”
– Vina Ip, Behind The Scenes of The Property Market
We are open to analyses, forecasts and recommendations. A brokerage firm can issue a “buy” or “sell” call. Whereas the only recommendation from property agencies is “It’s the best project and the best time to buy now”. They are not required to declare their position.
Anyway, we can’t deny the fact that we lack individual judgment and often have difficulties making decisions. From time to time, we are desperately looking for signs or directions with words of encouragement to make a move. Even if the boat sinks later, it is not too bad if we see that many are inside too.
Holding vested experts responsible for their forecasts
Meanwhile, HK01, a leading Hong Kong news website, invited two guests to talk about “2024 stock and property investment review”. They were Dr. Jacinto Tong, CEO of a property investment firm, and Master Seven, a fortune-teller who used to be a financial journalist.
Consequently, the whole session became a heated debate with Master Seven confronting and challenging Dr. Tong.
“You said you are bullish about the stock market. But you cashed out in private. What does that mean? Were you fishing in troubled waters?”
“I don’t believe what you said. Don’t bluff me. You are keeping many secrets in your heart.”
“What infinite demand, Mr. Tong? Supply is also infinite. We need many years to digest first-hand properties.”
“You said you are bullish on properties. Why don’t you rush in and buy now?”
“Bullish? I heard you sold a building not long ago. You are showing your hairy tail. The audience know you are an old fox.”
“Last year you predicted property prices to rise 3 to 4 percent. Now you said 2025 prices will go up at least 15 percent. Do you dare to make a bet with your own properties? Because I will definitely win.”
“You take out HK$100 million as a stake. Do it in front of the audience. We mean what we say.”
“Housing prices will fall this year. I guarantee. See I leave my ring and diamond necklace here. Put down your watch now. How much is it worth?”
“See, ask you to take your watch off you are already nervous and sweating. Don’t even dare to use it to bet. Would you trust me or trust him?”
“I was testing you. You just fell into the trap.”
What an exciting video on market forecasts!
Food for thought
I was listening to Spotify. Suddenly, the DJ said, “I am going to play some really nice songs. If you don’t like them, I will eat my hat.”
Wow, I am impressed. There are still people who stick by their words.
“I find it profoundly unethical to talk without doing, without exposure to harm, without having one’s skin in the game, without having something at risk. You express your opinion; it can hurt others (who rely on it), yet you incur no liability. “
– Nassim Nicholas Taleb, Antifragile: Things that Gain from Disorder
“We know it is common that people don’t keep promises. Listen to what they say with a pinch of salt. Above all, be realistic when setting expectations. Focus on things that are under our control.”
– “Why people miss the big picture“, PropertySoul.com
Incidentally, before his retirement, former Canadian Prime Minister Jean Chrétien was elected twelve times as an MP in his 30 years serving in the cabinet. In fact, Chrétien never lost an election. He won three terms as Prime Minister – the longest running in the history of Canada.
The 91-year-old politician shared an advice on politics.
“Some people are very eloquent. That doesn’t mean that they are right. So put distance between the decision and the discussion.”
My book Behind The Scenes of The Property Market is available for preview and order online.
Check out my new online courses How To Buy Good Quality Properties and Buy The Right Condos.
If you need advice on property matters or residential properties in Singapore, you can check out my one-to-one consultation service.
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