THE RELEVANCE OF FORECASTING IN THE REAL ESTATE DEVELOPMENT INDUSTRY IN SINGAPORE

Abstract

This dissertation sets out to discover the relevance of forecasting in the real estate development industry in Singapore. It is most people's belief that forecasting is simply too sophisticated for the real estate development industry in this country, but little do they know that most developers are actually forecasting even though they themnselves may not realise it. Forecasting is simply the prediction of the future, or what is believed will happen in the future. It can be in its simplest form - the use of intuition, or using more complex tools such as the time series analysis or the causal method. Areas of application of forecasting are identified, ie, where forecasting comes in handy as an aid to decision-making, as against the use of intuition or judgement alone. In the Singapore context, many of the developers especially the smaller ones find it hard to justify the need for formal forecasting; preferring the well-worn method of using intuition to reach a decision. It should be realised that the use of intuition alone is simply not enough especially in such a volatile market and in such a competitive world. Forecasting, more often than not, is inaccurate; but the act of it helps towards the understanding of the forces underlying the movement of the market, thus contributing to better decisions. Developers can be more sensitive towards market movement, and the needs and desires of the market. This dissertation went on further to illustrate an interesting technique (the conjoint analysis technique) that is able to analyse space demand for a specific project in greater depth. It is a simple technique but with great potential. Recommendations made include some suggestions for the REDAS to promote the use of forecasting.