Fortunetellers Predict Rising Prices
By Chan Sue Ling
Bloomberg News
Saturday, January 28, 2006
Singapore home prices will rise this year at more than twice the 3.8 percent pace of 2005, according to the forecast of Chong Swan Lek.
His prediction comes not from studying the real estate market or economic data, but from a type of fortunetelling known as geomancy.
"It's the year of fire and earth, which means you'll make money out of property," said Chong, 65, a fourth-generation Chinese geomancer. "We can expect anything between a 7 and 10 percent rise in property prices."
As the Year of the Dog looms on the Chinese lunar calendar, geomancers tap their ancient study of energy flows, or feng shui, numerology and astrology to dispense tips for good fortune. Like analysts who map out stock patterns, Chong uses lines and charts to predict trends for the year starting Jan. 29.
Investor Louis Wong agrees that home prices will rise, though he doubts the precision of Chong's tools. A geomancer's key instrument, called a compass, is a round board with components that include nine flying stars, eight lunar mansions and the five elements of earth, fire, metal, water and wood.
"Property prices will rise by 5 percent because the economy is getting better," said Wong, who helps manage $20 million at Phillip Asset Management Ltd. in Hong Kong. "I rely on fundamentals."
Still, human behavior is affected by the chi, or energy, that surrounds us, Wong said. Sometimes, geomancers get it right.
"There have been predictions in the past about catastrophes, epidemics and natural disasters, which have come true because of the movement of the stars," he said. "But for trends such as property, I don't think it can be accurate."
Chong's forecast mirrors that of CapitaLand Ltd., Southeast Asia's largest property developer by sales. Home prices will rise by as much as 10 percent this year, Patricia Chia, chief executive of the Singapore company's local residential unit, forecast in October.
Tan Khoon Yong expects an even bigger increase. The 11th animal in the Chinese zodiac will usher in an "energetic" year for the property market, the Singapore geomancer said. He sees home prices rising 10 percent to 15 percent.
Tan, 51, also bases his forecast on his compass, taking into account the dog's characteristics. Trends from past years support his prediction, he said.
"Property prices usually drop drastically during the Year of the Tiger and recover slowly but steadily in the subsequent years," Tan said. "The last two years of the Tiger, 1986 and 1998, were very bad years."
Singapore's residential property price index fell 34 percent in 1998, according to data compiled by Bloomberg, as the 1997- 1998 Asian financial crisis damped consumer spending.
In 1986, the island's property cycle bottomed out, said Leslie Chua, head of research at the Singapore unit of Jones Lang LaSalle Inc., a Chicago-based real estate brokerage.
Chua forecasts a 5 percent to 10 percent rise. An index measuring property shares climbed 0.9 percent today, taking its gains in the past 12 months to 44 percent.
"The entire region has seen huge upsides in their prices," he said, citing Bangkok, Hong Kong, Jakarta, Kuala Lumpur and Manila. "Singapore is the last case."
Tan has been right before. In 2004, the Year of the Monkey, he predicted that Singapore's Straits Times Index would break 2000 by about midyear for the first time since Dec. 13, 2000.
The benchmark measure reached 2003 on Sept. 15 and ended the western Gregorian calendar year at 2066.
This year, the index probably will rise 10 percent from the end of 2005 to a record 2600, Tan said, adding that the impulsive nature of dogs means the gains may not be sustained.
"The Year of the Dog is a strange year, because it's a 'volcano' year," he said. "When it erupts, there'll be very quick, very large gains, but then it will sink quickly and to very low depths as well."
Citigroup Inc.'s head of research in Singapore, Lim Jit Soon, said on Jan. 3 that the index may reach 2600 as the economy expands and the government restructures some state-owned companies.
Merrill Lynch & Co. last month forecast a high of 2460 by mid-year, while UBS AG said it expects a peak of about 2550. Macquarie Securities Ltd.'s 12-month forecast is 2400.
Geomancers from Seoul to San Francisco also are tapped to choose auspicious dates for weddings and advise on the design and interior layout of buildings. Tan said he charges a minimum of $237 for wedding dates and $850 for arranging homes.
Merrill Lynch in Singapore consulted a geomancer when a building with "sharp" metal edges arose near its office, said Kong Eng Huat, managing director of the lender's private banking arm. Sharp edges are said to direct negative energy.
"We actually had someone come in and take a look," Kong said. "They gave us a few suggestions, like changing the location of plants, but nothing drastic."
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