20 per cent fall in property market? No, it fell just 4 per cent. A look at 2014 forecast

IT’S the time of year when people make forecasts for the year ahead.

I’ve often wondered how many of those forecasts come true. So this week, I thought I’d look back at some forecasts for 2014 and see if many came true.

Singaporeans being reputedly property-mad (at least before the rounds of cooling measures), I looked at property forecasts.

Propwise, a property blogger, had a useful article in Feb 2014 listing forecasts for the year.

These range from a prediction of a rise of up to 20 per cent, to  headline-grabbing prediction of a fall of up to 20 per cent by 2015.

One bank meanwhile was interesting: its head honcho reportedly warned of a fall of 10 to 15 per cent; while a lowly analyst predicted a fall of of 5 per cent a year over the next two to three years.

A property portal forecast a fall of 6 to 8 per cent for private property and 8 to 11 per cent for HDB resale flats.

In the end, the market proved more stable than most thought.

Private property prices fell 4 per cent over the year in 2014. In the Housing Board market, resale prices fell 6 per cent for the year.

No analyst got it spot on, but the one who predicted a fall of about 5 per cent a year for the next two to three years might prove the winner, given National Development Minister Khaw Boon Wan’s recent confession that a single digit fall in HDB resale flat prices in 2015 would be “a very good development”.

What of qualitative forecasts?

The Financial Times has a habit of gathering its in-house experts and commentators to give their take for the year ahead. To its credit, it then runs an article at the close of the year saying what its writers got right and wrong.

Among the things it would rather not talk about: “Chris Giles said the Bank of England would raise interest rates in 2014. Simon Kuper predicted that Brazil would win the football World Cup. Clive Cookson predicted that Virgin Galactic would launch its first successful commercial flight this year.”

Some got it right: “Victor Mallet correctly declared that Narendra Modi would win India’s general election; Jonathan Ford was bang on about Scotland voting No to independence (even if that looked shaky before the poll); Gideon Rachman foresaw wins for both the French National Front and Britain’s UK Independence party in the May European elections.”

What of The Straits Times’ own forecasts?

Veteran diplomat Tommy Koh’s predictions for 2014 proved quite prescient. He wrote in The Straits Times on Dec 28, 2013:

“Economically, 2014 will be a better year. The US recovery is picking up steam. The euro zone crisis is over and Europe is on the road to recovery. Asia will continue to be buoyant...Asean is likely to remain united. Relations between the US and China are likely to remain stable. Sino-India relations are trending in an optimistic direction. The only potential flashpoint is the increasingly hostile relationship between China and Japan.”

Kishore Mahbubani, another regular Straits Times commentator, went so far as to put his money where his mouth was. Last year, he wagered 10-to-1 against himself that East Asia would not go to war in 2014. He was right.

He’s collecting on his debt, he says.