Wednesday, Nov 07, 2007
The next downturn will turn into a depression
MoneyWeek: House prices: expect the worst
In August 2005, Fred Harrison told MoneyWeek that the UK property boom would last for another three years, before ending in 2008. Here he updates his forecast.
Posted by mary @ 05:24 PM (306 views) Add Comment
5 Comments
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1. Ill_handle_it said...
"Reckless mortgage lending will go unpunished, leading to even "worse" practices in the next property cycle." - Even worse ! Yikes !
2. Terry F said...
er, but prices are still going up and it's only another 2 months until 2008.
Check the bbc house price website if you don't believe me.
3. sold 2 rent 1 said...
Fred is the man
"My model suggests that the property market runs in 18-year cycles. There have been three in the postwar years (1956-74, 1975-1992 and 1993-2010). "
"The phenomenal rise in land prices since 1993 is the main reason why the next downturn will turn into a depression"
"expect the worst. Sell your buy-to-lets – and investing in ‘safe haven’ assets such as gold may also be a wise move."
4. Tom101 said...
HOW DO YOU SAFELY BUY GOLD!!!
5. cyril said...
I must admit I haven't read Fred's book but I am a bit suspicious about 18-year cycle theories (although I know a lot of HPC readers are fond of this sort of thing). The world has changed quite a bit since 1956 so it seems funny that 18 years should remain a constant over that time. However, it looks like we are heading for a fall, so he seems to be right this time. Maybe it's a generational issue - 18 years is about the length of time it takes for a new generation of people to come along who have no memory of the last slump?
Alternatively, it could just be a load of tosh and Fred just happens to be lucky this time. Roger Bootle is another favorite and his predictions have been consistently wrong so far.