Property Bust after 14 year Boom- Fred Harrison, part 1
Is there a property crash every 18 years? Fred Harrison thinks so. In his book: Boom Bust, House Prices, Banking and the Depression of 2010, Harrison describes a cycle of 18 years. If he is right, we are headed towards a Depression by 2010, and it will be many years before those who bought at the peak will be back to even. After the Introduction, I look at price developments in the UK Property market since the 1994 Low. After a strong 14 year upswing, the market peaked in August 2007, and is now headed into a severe downturn. How long will it last, the Video provides a possible answer.
@athertg Somehow we just cannot make regressions on future data…retro it is…always. That’s regression modelling for you.
@Macrocompassion
There is no logical explanation for the 18 years. It is just an observation of factual events.
I thought it was harsh on Gordon Brown who did keep the UK out of the post 9/11 recession – not by luck by good observation and judgement to what was right at the time.
@janosabel
Property is the bricks on the land. Land Value Tax taxes the land only, not the bricks.
Buying land and homes and leaving until the price is “right” creates a homes shortage. London had/has 200,000 homes vacant, in a city short of accommodation.
Greed kills ahhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh
Good posting. You will only ever convince those who havent been lured by the age old broken promise of increased wealth without working for it! I tried to tell friends not to buy for the last 6 yrs and took ridicule for it and still havent had an apology. We are heading into a neo fuedal society were your bonded by the debts around your neck!
The 18 year cycle in house prices has been known about for years. The late Robert Beckman certainly knew about it.
He’s a Freemason. He’s in on this conspiracy.
“Property” consists of the building and the land on which it stands. If you rent the house you pay income tax—a penalty. If you do not rent it you pay nothing.
This encourages the worst type of property ownership by high salaried executives who can buy a property for cash and do nothing with it until the sell it with a huge capital gain *after capital gains tax*.
Insane!
Bruno Powroznik is back as brunopowroznikagain
The 18 year cycle has no logical explanation. It simply is what happens. Why is this exactly the same?
Could it be because the relative positions of the sun the moon and the earth are the same every 18 years and 11 days? No other natural phenomena suggest themselves!
I think you are absolutey right athertz, extrapolating from a few chosen variables in a system as complicated the economy is wrong.He may be right but it is not likely that an argument like this is correct, these types of sytems involve uncountable variables and worse exhibit chaotic behaviour. After this problem is over we will hear about all the guys who made accurate prediction and ignore the 90% who were completely wrong.
“retro-fitted”?
Harrison started making his forecasts well before 1990, and he prediction the 2007/8 peak many, many years before it happened. Why not do your research before making ridiculous accusations.(!)
I believe in land value taxation but I do not believe this theory of cycles. The theory has been conveniently retro-fitted with the benefit of hindsight to it all the events since 1990.
There are, in my view, better expalanations for the recent boom and busts in housing land prices.
DrBubb?
I have never owned property, but I do not criticise people who do who view it as their home and shelter.
I do criticise people like you. You are the worst kind of speculator. One who deludes himself that he is doing right when he is doing wrong. You are not proving a “service”. That is just a soundbite. You are living off the backs of others.
Are you telling us, Vic, that you have never owned property? Personally, I see property investment as a service- providing homes that others want to rent, UNTIL prices jump and a “Speculative Premium” comes into the market. At that point, it becomes cheaper to Rent than Buying. And if people keep buying, they are pushing prices higher, gambling on gains. That is when it is parasitic, but it is also a more risky investment, reliant on capital gains.
The increase in land value which accounts for most of the increase in real estate values when people do not do significant renovations or add improvements. Owners of land do not create land value because the community as a whole creates it. All economists agree. If you do not create the value of something yet get to pocket it either through rents and sale price in the case of land this is a wholly unearned income and it is at the expense of everyone else. At least It is wholly unearned.
Property profits are not “something for nothing”, except when banks require nothing down, and there is no risk of loss. Now at the recent top, when banks were financing 90% and even 100% or more, it may have seemed like that. That’s why so many jumped in, and pushed prices so high.
The risks of property ownership are being brought home to everyone by the current price slide. There is no free lunch. Lives are being ruined by property debts.
Hollandparker, you remind me of those arks in hitchhiker’s guide. Society doesn’t want or need you and would be better off without you
So, let me get this straight. You say it’s parasitic but you do it anyway to make your fortune. In making your fortune you screw others. Then you spend SOME of that fortune , not ALL but SOME. Why not just leave people alone and stop being a parasite?
Correct. When appropriate I tell people that I have made several $100Ks of totally unearned increase in land value over the years without trying merely by selling homes I bought to live in. I thank these people for helping to make my land more valuable, which they and everyone else did. I point out to them, in a polite manner of course, that they were foolish to give this value to me because they could have taken it all via a tax to benefit all of them without doing any injustice to me.
Okay, so it is parasitic.
But why not use the cycles to make a fortune, and then spend some of that fortune changing the laws. Else, you stay a victim- stuck JUST WATCHING a process you understand better than most. “Only Nixon could go to China,” and only a big property speculator can change the system, I fear.
Harrison is indeed not a real estate speculator and is not promoting same rather just the opposite. On the other hand people who have the good fortune of understanding what Henry George said have often engaged in land speculation which is what investment in “real estate” is all about because it is what makes it profitable. The fact is that real estate speculation is land speculation and is a parasitical practice on a par with chattel slavery because done at the expense of everyone else.
Greed manifests when people can get something for nothing. In the case of the housing market greed is primarily about cashing in on the increasing value of land the value of which is created by (because it is bid up by) the community as a whole. This is the age old game of a few claiming to own not only the land (fair enough) but also the value the community creates and then turning around and charging others for access to their own planet. It is a parasitical scam not unlike chattel slavery.
One would suppose that Fred is a big speculator in property and is trying to help other similar friends and bank in their ability to make a killing on the property market! Whilst in fact as Georgists, we know that the introduction of new leglislation to stop this kind of speculation and to encourage the more propper use of land including those sites presently being held out of use and waiting for municipal and local developments to make them more desirable and costly. David Chester.