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Applying fundamental and technical analysis to property

The objective of fundamental analysis is to use a systematic approach to value a stock using qualitative and quantitative methods. Qualitative factors can be the quality of management, branding, corporate governance, etc., whereas quantitative factors can be include economic analysis - macro level like inflation, GDP, interest rates; industry - ratios like EV, P/E, P/B, EPS, EBITDA; and company analysis - balance sheet, income statement, and cashflow.

The objective of technical analysis is to observe patterns, usually historical data of price and volume, to make a profit by putting entry and exit positions using techniques from statistical analysis to behavioral economics.

Applying these techniques directly like the ratios or charting indicators may not be so applicable but there are some similar concepts and principles which we can learn from.

Application of fundamental and technical analysis to property

Qualitative factors

Developer - past projects to know the quality of the project, reputation and financial strength - developer going bust, we don't want to be caught in a especially for new launch projects.

Architect and design factors that commands a certain premium.

Management - complaints, legal cases etc.

Estate Title, rights, encumbrances, easements, restrictive covenants.

Property location, tenure and age, amenities, accessibility, facilities, surrounding environment, unit layout and shape, design, height, unit condition, frontage, people's beliefs.

Quantitative factors

Macro level factors like GDP, interest rate and inflation applies.

Price and volume indicators: URA’s Property Price Index, HDB’s Resale Price Index and JTC’s Industrial Property Statistics, Supply pipeline, URA Master Plan.

Property data: development info such as tenure and lease remaining, size of units, number of units (big or small development), number of positive and negative sale, plot ratio.

Technical analysis methods

Price and volume data tells us the general direction and trends with time. Unlike stocks, property volume data is a challenge and chart indicators would not apply so well, more so when evaluating a particular development. However we still look at price trends like support zones to evaluate our options, to buy and exit, as well as consider alternatives.