What do you think of this 18 year property cycle forecast?

What do you think of this 18 year property cycle forecast?

10:45 AM, 3rd June 2021, About 2 weeks ago 6

Text Size

Fred Harrison has been quoted in the Daily Mail and This Is Money as the British author and economic commentator who correctly predicted 1990 and 2008 property price crashes.

Harrison is now predicting house prices will continue to rise until a crash happens in 2026! What does everyone else think?

Harrison claims he has mapped out all the past data and is able to use an 18-year property cycle model to forecast the next market downturn. Harison is quoted:

“Back in the 1930s, an 18-year business cycle was identified for trends in the city of Chicago. It rested on a theory about the land market, which operated on a 14-year cycle.

“I checked the theory against US-wide evidence for the 19th century and cross-checked the theory against the diverse cultural and geographic evidence from Japan and Australia over the 20th century, and I identified the cycle as operating within the UK for at least 300 years.”

However, would the Pandemic affect his calculations for the 18-year cycle? Apparently not:

‘The evidence reinforced my view that the virus did not have the power to stall the cycle. I concluded that the 2020s would be a re-run of the years after the flu pandemic of 1918, which terminated with the Crash of 1929.

“There might be a short-term easing off, as the post-pandemic world returns to something akin to normal, but the price trend will continue upwards.”

“Each 18-year cycle has a mid-cycle downturn, For the current cycle, that was 2019 and sure enough, there was an on-time downturn.”

“Nothing can stop the crash of 2026, other than if prices were limited to long-run affordable levels, but governments refuse to contemplate that prospect. If people are happy with the booms and busts, there doesn’t need to be a solution.

‘The best I can do is explain the future so that people can make informed judgements.”

Do we think he could be correct 3 times in a row?

 



Comments

by Neil Patterson

10:59 AM, 3rd June 2021, About 2 weeks ago

House prices are currently on the 'watch list' for the Bank of England as a concern for the medium term 2% inflation rate target.

by John

13:09 PM, 3rd June 2021, About 2 weeks ago

I based my purchases around this cycle and it has worked a treat for me

Property is long term so this is useful to know when times are right to buy and sell, but I would not be looking to sell in a crash. The cycle turns again and continues upwards ultimately. What if you were thinking about retiring and cashing out. Knowing you were near a high point could be useful.

Akil Patel (I think) also follows this model and says mid 20’s will be the peak time.

So my prediction is to wait until 2030 to buy again after the crash has happened and blown through. However I am also buying now.

It’s complex but knowing about cycles really helps you

by TrevL

13:24 PM, 3rd June 2021, About 2 weeks ago

Rising interest rates, in response to inflation, would probably undermine the 18 year cycle, they could rise by 0.5% or 1% quite quickly, particularly if the US acts first.

by JB

17:38 PM, 4th June 2021, About 2 weeks ago

Reply to the comment left by Neil Patterson at 03/06/2021 - 10:59
Hi Neil. Please can you enlarge on your comment? Thank you

by Mick Roberts

9:56 AM, 5th June 2021, About 2 weeks ago

I always thought it was 14 year cycle & had in my notes as 2022 was the peak but who knows, let's see.
I've got several houses on same roads.
One road I paid 18k in 1999.
38k in 2002.
54k in 2004.
So 3 houses same road, & 3 times as much for 3rd house.
All same 2 beds.
My point is, none of us know, if we did, I'd have bought the whole road in 1999.
My problem will be I may be totally having enough by 2006 & begging the tenants to let me sell. I'll take it on the chin & maybe a crash will prompt some Landlords to buy & then my tenants may have a choice to be able to move.

by Mick Roberts

9:58 AM, 5th June 2021, About 2 weeks ago

Reply to the comment left by Neil Patterson at 03/06/2021 - 10:59
Yes Neil, the prompts we seeing is high inflation coming, then maybe higher interest rates-If the existing borrowers can stomach them, will the BOE then intervene to not raise rates even if high inflation.....


Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

BECOME A MEMBER