Every day we read in the media all sorts of property data, research findings and market
forecasts.
Have you ever wondered how these people come up with those numbers and insights?
How reliable are the information and data they provide?
Let's discuss it in this video.
Firstly,, why market predictions are inaccurate?
Next, how authorities come up with their data?
Lastly, why no property data is 100% correct?
Last Friday, the Monetary Authority of Singapore urged property buyers who take up home loans
to carefully consider the impact of interest rate hikes and the upcoming supply.
Remember the last time when MAS told the media that "there is euphoria in the Singapore
property market"? The next day afternoon they were already imposing new cooling measures
and effective the following day.
A few days before the announcement of the July cooling measures, and right after the
release of URA's flash estimate of Q2 data, property analysts and agencies are quick to
predict prices of private residential properties to go up 10 to 20 percent this year.
With three quarters over in 2018, what is the price increment so far?
1st quarter PPI is 136.7 and 3rd quarter PPI is 149.7.
The actual price increment for the first three quarters is 9.5 percent.
The whole year is expected to be lower than 9 percent.
After the introduction of new curbs, growth forecasts of new sale volumes are cut immediately.
Predictions on drop of sales volumes range from 15 percent to a whopping 40 percent.
So what is the actual number of new units sold?
For the first 3 quarters, the new sale volume is 10.5K in 2017.
The full year is estimated to be 8.5K to 9K this year.
This is around 15 to 20 percent lower than last year.
The forecast myopia is not specific to the property industry.
It spreads like a disease in the stock market too.
How many of you can recall The Sunday Times kick-started 2018 with the article "Experts'
outlook on STI", when the journalist interviewed a few financial experts to forecast the growth
of the Straits Times Index this year?
These analysts forecasted STI to reach 3,700 to beyond 3,900 points in 2018.
But the reality is, STI has fallen from the height of 3,500 to 3,090 as of 27 of November.
It is not difficult to imagine that all equity firms would love their clients to buy more
stocks, especially the counters that they recommend.
Just like property agencies and banks would love to see home buyers and investors snapping
up properties and borrowing more to fund their purchase.
But not all spokespersons share their subjective views because of their vested interests.
Many of them are just being pressed by the journalists.
When I was promoting my book No BS Guide to Property Investment in 2014, after a few interviews,
my name was in SPH's "property expert" database.
Every now and then I would receive urgent calls and emails from one of the papers asking
for my comments on anything related to properties, regardless of whether is my focus
or not.
Journalists have tight deadlines for their articles.
You are expected to get back to them the next hour or at least within the day.
If they manage to get you on the phone, they expect an immediate answer from you.
Journalists already have an idea of what they are going to write before they call you.
They ask leading questions and guide you to agree with some statements so they can get your
name behind the quotes.
You can imagine while spokesperson from agency A is hesitating over the phone,
the journalist will tell him what agency B, C and D agree in consensus that the market
will be going up at this percentage.
So what do you think?
Perhaps the spokesperson has told the journalist frankly that this is not his area of interest,
he doesn't have the answer and he cannot predict the future.
But when he is being pressed further, he can only give a ballpark figure or his gut feel.
He might have already reminded the journalist to tell the readers that this is only his
personal opinion, but of course this part is missing when the article is out.
Of course this is different from those who flip-flop their position and trim their sail
to the wind.
There are also cases when those so-called experts from some institutions who share their
vested views in an in-house research report, even if nobody is asking for their input.
They choose to publish their exclusive findings through media with high circulation to make
them sound more authoritative and insightful.
That's why we have CNBC article on Morgan Stanley's forecast of Singapore's property
prices to double by 2030.
And even when all local analysts cut their forecasts for this year after the July cooling
measures, this ultra-optimistic foreign bank insists on the bullish outlook because of
interesting reasons such as Singapore is a global hub and a vibrant global city.
There is a wave of mega-flagship projects such as a new airport terminal.
Do you know how this industry come up with their property data?
Do you know why different parties often release conflicting figures that are contradictory
to each other?
Do you know which set of property data is more representative?
In general, there are three sets of properly price indexes in this market.
I have explained this before in episode #2 "URA 1Q2018 Statistics".
The oldest and most published data is from URA where they release their quarterly flash
estimates and real estate statistics.
The data is largely based on the caveats lodged by property buyers with the Singapore Land
Authority after they exercised the Option-to Purchase or signed the Sales and Purchase
Agreement.
However, it is not mandatory to lodge a caveat.
Some transacted properties may not be recorded by the URA database.
Since 2015, URA supplements their data with stamp duty transactions from the Inland Revenue.
Property Price Indexes also take into considerations more property attributes such as size, age
and proximity to MRT station for more meaning comparisons.
The second set of data is from SRX which is under SPH.
They release monthly flash reports on non-landed residential resale, HDB resale, private and
HDB rents.
Personally, I think the SRX data is most reliable and timely because it is based on the resale
transactions lodged with the major property agencies by their in-house property agents
for claiming their commission.
They also don't track new sales which are relying on honest reporting of the developers.
But I am not sure what will happen when one day all buyers, sellers, landlords and tenants
are going for the DIY way instead of going through property agents.
The third data is from NUS Singapore Residential Price Index which uses a basket-based method
to track month-on-month price changes of 364 condo projects with TOP date between 1998
and 2009.
Let me remind you that all property indexes have their strengths and weaknesses.
There is no property data that is 100% correct.
And similar to a country's GDP, the data and numbers can be revisited and revised later.
Report in the month is only based on estimate so expect changes from time to time.
Remember, there is no such thing as the most reliable data.
There is only more reliable data.
If you cannot produce a better set of data, you don't have a choice but to follow it.
Let me ask you something: Can you trust property data released by the government?
Recently, The Straits Times reported an article from Reuters, saying that China's property
prices increased in October, led by gains in smaller cities.
China's economic growth is still intact.
There is a similar article in Bloomberg titled "China's Home-Price Growth Accelerates as
Curbs Fail to Bite".
Obviously, the journalists behind these articles are not from the China real estate market.
They are simply writing or reporting from some second-hand information they can get
hold of.
On November 15, the National Bureau of Statistics of China released figures that show October
home sales surge in all 70 cities except in four cities in the south.
Even the poorest performing city Shenzhen drops only 0.05 percent.
But the Chinese are puzzled by the statistics.
In fact, property prices in China have been going down since August.
There were also angry mobs of early buyers attacking showflats at various cities
during the Golden Week in October because developers slashed prices .
Mr Shih, founder of Centaline Property Agency, explained that there is strict order from
the central government to control property prices.
Many provincial governments don't allow registration of ownership for new transactions.
They wait for one undervalue property transaction to register, before lodging one overvalue
transaction.
So rise in property prices looks like under control in the province.
There is feedback from property agents that they still have many transactions completed
six months ago waiting for registration.
With more and more undervalue transactions, those properties sold at high prices earlier
are slowly being registered.
The China official data shows 42nd straight month increase in home prices.
Well, it looks like that the real estate market will still be growing for a long time.
Data of property prices and transaction volumes can all be manipulated.
Afterall, it is a known secret that provincial governments are no longer reporting any statistics
to the public.
Do you know that when more and more companies were impacted by the worsening US-China Trade
War, the Chinese government has issued a stern warning to the local media and banned anyone
from reporting negative numbers?
As soon as the government is not saying, there is no contraction in any market.
But not everybody is dumb.
The more you try to hide, the more people will speculate.
Sooner or later, the spread of rumours will grow out of control which speeds up the collapse
of the market.
Do you still think that you can rely solely on official data released by the local government
when you buy overseas properties?
What about the case in Singapore?
Well, I'll let you decide on your own.
Lastly, remember that it is sometimes difficult to get all the necessary facts only from the
statistics.
To get the complete picture of what is happening and what has happened in the market, even
the most accurate data must be supplemented with field observations on the ground.
That's all I have for today.
If you think this video is good, please give me a "Like" and subscribe to my youtube channel.
Take care and talk to you soon.
For more infomation >> FL STUDIO ELEKTRONİK MÜZİK BEAT YAPIMI/HOW TO MAKE EDM BEAT IN FL STUDIO - Duration: 6:53. 
For more infomation >> Guidance by Glazer EP40 - How To Spot The Deal: The 4 Things You Need To Look Out For! - Duration: 11:16. 
For more infomation >> How To Get Started In Property Investing... START HERE! - Duration: 5:21. 
For more infomation >> How to Spray Paint Sliding Mirror Frame Closet Doors Ugly Metal Frames - Duration: 10:57. 
Không có nhận xét nào:
Đăng nhận xét