In Jun 2011, I wrote a blog titled, “Outlook for the next few months”. In the article, I wrote about the how I used the Ascendant Assets Index or AAI for short, a proprietary index, to help me determine how the Singapore private property market was doing.

To recap, the basic premises of the AAI are (1) there is a lead-lag relationship between the stock and property market and (2) we are able to tell how the property market is performing by analysing the correlation between the stock and property market. For example, in bullish (or bearish) market conditions, we would expect the correlation between the stock and property market to be high as prices are increasing (or decreasing) in tandem. On the other hand, we would expect the correlation between the stock and property markets to be low during turning points as stock prices, being more liquid, would diverge ...