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eric pebble

Bust To Follow Boom - But For 3 Years - To 2008:

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Hmmm ... in a nushell -

This analysis is based on a theory of the property cycle. I have drawn on 300 years of business-cycle history and reached one firm conclusion: housing booms precede recessions … my research shows that this tends to work in 18-year cycles. There are usually 14 years of rising prices followed by four years of recession across the broader economy.

Therefore we have 1990 + 18 = 2008, three more years of boom up the peak! :unsure:

Edit: math typo!

Edited by spline

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Housing booms CAUSE recessions, well actually it is the enormous amount of debt traditionally associated with housing booms that cause it - first the extra money strangles the economy with high costs and secondly the consumer is stuffed with liabilities and interest to be paid which impedes their normal ability to consume.

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The 18 years between peaks is a very long term prediction that could have easily been made in 1992, and is just an average, guess what, somethings it can be longer or shorter. I would like to know where the extra money is going to come from even for stagnition for the next 3 years to keep the current prices for the next 3 years.

I trust Dr Bubb a lot more for short term predictions, but the problem with markets is that timing them is very difficult, predicting where they are going to go is relatively easy.

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charts prove nothing but the history of the past. they cant predict things.

this boom has run its course in the uk. downturn might be mild. sipps wont dent it and i think prices will fall as low as -40% over the next 1-3 yrs. i dont see the high street picking up to boom times again, though i dont see it getting any worse. i think if they are surviving now they will continue. if not they were wrongly set up anyway and had to fail. btls will be hurt. young new buyers who paid top will have to sit tight. we should be back to being normal 2008-ish.

these are my own personal views.

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too to , wrong answer again 1998

Nope! :P His argument goes something like this (but with the increments locked at 18 years): peaks in 1974, [ignore 1980] (+15) 1989 , (+19) 2008 …

Agree with The Masked Tulip – this sort of thing is no better than looking at tea leaves.

Edited by spline

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All this cycle stuff is just astrology. The cycle people look at the past and see what they want to see.

Everytime is different, the only thing one can be sure about is that there will be ups and downs.

We are just about to have a down. One more year of mild reduction at most, then the direction will be clear.

This is like the internet crash of 2000, it was predicted from 1995 or 1997... but it took longer to arrive than expected. The HPC has been predicted since 2000...

A legion of little triggers are going off. Now we are about to start going daaahn!

Yippee.

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Guest Riser

Benny made a good point about the timing of the house price cycles being linked to the Fibinacci series:

CRASH Due Q3 2005 according to Fibonacci

QUOTE(Riser @ Jun 2 2005, 05:57 PM)

It shows:

Q2 1974 Peak +45% (75k) Low -8% (52k) Crash from Peak -30%

Q2 1980 Peak +15% (69k) Low -10% (57k) Crash from Peak -17%

Q4 1989 Peak +37% (103k) Low -26% (64k) Crash from Peak -37%

Q3 2005 Peak +45% (157k)

Ahh , I do love a chart myself. Looking at these numbers I got to thinking why this cycle has taken so long , 16 long years since 1989 seems to be a neverending bull run. So anyway for some reason I thought about the golden ratio , ya know the fibonnaci number 1.618….interesting how this worked out.

Q2 1974 , to Q2 1980 = 6 years

6 * 1.618 = 9.708 ….lets call it 9 3/4 years until next peak.

Q2 1980 + 9 and 3 qtrs = 1990 Q1 , ok so were out by 1qtr here from your numbers but who can really be sure of the exact top back then.

9.708 * 1.618 = 15.7…lets call this 15 3/4 years until next peak

1990 Q1 + 15 and 3 qtrs = 2005 Q3…..and here we are.

Using these numbers you’ve posted , and the golden ratio , could have predicted this peak some 15 years ago.

Oh , in case anyone was wondering , next peak from here is 25 1/4 years away. So , if it drops and we can pick one up here , there a good possibility we can cash in 25years from now , just when your mortgage is finally finished.

Anyone find this of interest , or am I talking rot ?

http://www.google.co.uk/search?hl=en&q=gol...le+Search&meta=

Q3 2005 sounds good to me B)

Edited by Riser

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He seems to be saying that the boom is likely to continue up to a peak in 2008, much later than our 2004 or 2005 concensus, and then fall as expected down to the bottom (in 2013?)

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Fred Harrison basically says that in the past interest rates were set at 5% (fact, by building societies before the banks became involved, we're talking 19th century).

This allowed a person who bought a house to repay the capital and interest over 15 years (1.05^15=2).

This effectively gives us the building cycle that has dominated the UK economy.

There are variations, through history he has found the cycle to be closer to 18 years in total, allowing for what he calls the winner's curse.

The last housing peaks were around 1973/4, then 1989/90, and predicted 2008.

Now bearing in mind that the housing market usually tanks about 2 years before the wider economy, we're pretty much well on target.

Recessions in 1976, 1992, and the next one 2010.

The exact timing may be slightly out, this one looks like it's coming sooner.

Which ever way you look at it, we're fairly stuffed in this country...

Edited by BandWagon

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I'm not sure I buy this rigid 18 years thing.

Drawing a comparison with physics: the period of a pendulum swing or oscilating spring depends on the forces involved. With a pendulum, it's down to the length of the pendulum and the strength of gravity. If these change, then the pendulum speeds up or slows down.

So too with property cycles - we need to look at the factors which cause it to rise above and below long-run trend. These are things like: how fast people realise the market has changed, how swiftly interest rates respond to the new environment, how quickly people can borrow to buy and sell, and so on. If any of these variables change, then the house-market cycle can speed up or slow down, too.

I would argue that the new speculative interest in property will speed up the cycle, meaning the period may shorten from 18 years.

Incidentally, the house-market cycle has already changed in other ways: the amplitude of the wave has increased. Whereas before it stuck neatly between 3x and 5x salary, in the early-90s dip, it fell below 3x, and now has risen above 5x. In other words, house prices are becoming more volatile (perhaps as they become more speculative). Hence, there is every reason to expect a previous 18 year cycle to change, too.

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Guest growl

It a bunch of bollo. :D

Look these people know the boom is finished. They are trying anything to string it out for a another few years. It wouldn't surprise me if this so called economist is secretly working for the government. They know the end is nigh. But they need the bust to happen in about 3 to 4 years time.

But its happening now. We have tipped over the cliff and are just hanging onto the prcipice with one hand, while the other is holding a fistful of notes. The thing is that there are little trickles of stones falling past. Pretty soon...after Christmas that hand is going to let go and an avalanche will begin. Those money notes are going to fritter away into the breaze.

As for me. Well I'm on a different mountain now holding my binoculars :)

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Fred Harrison has spent much of his life understanding the role land plays in the development of our economies (and advising goverments over land policy)

The 18 year cycle is something that he has observed over hundreds of years.

What he's saying is that this cycle has dominated the British economy for centuries, and there is no evidence that it has changed.

If you're going to say that it no longer applies, I'd quite like to see your reasoning.

Try reading his book, you may not believe what he says, but it is at least a very detailed analysis of the nature of the property market in relation to the wider economy..

Edited by BandWagon

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Now bearing in mind that the housing market usually tanks about 2 years before the wider economy, we're pretty much well on target.

Recessions in 1976, 1992, and the next one 2010.

The 70's was packed full of lots of stop-start recessions, same for the early 80's, big market crash in '87 too. I'm not buying this 18 year thing, you can make anything fit if you ignore enough data and only include the things that match, it's too ideal I'm afraid.

Markets are just a reflection of human fear and greed, and humans are very complicated things to understand, well, at least their timing is.

Edited by BuyingBear

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I agree with this analysis...

Bust will follow boom - but when?

Many think that the global real-estate bubble has nearly run its course. Fred Harrison disagrees. He thinks it has another three years to run. Here he tells us why.

http://www.moneyweek.com/article/1346/inve...using-boom.html

I think that we're now on a steady slide in prices for the next 6 years, probably reducing by 40%.

You only have to look at the last peaks and troughs for this, peak 1989 - trough 1996, peak 2004 - trough 2010 ? The interesting thing is that you should be able to pay todays prices in 2014! As 1999 prices were exactly the same as in 1989?

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charts prove nothing but the history of the past. they cant predict things.

funny how history has a habit of repeating itself though isn't it??

...the good thing about charts is they can help you avoid making mistakes people made last time around.

with respect to the time cycle mentioned.....I think he's got it a bit wrong,my estimate is about 15 years.....which would give 1988 price peak at about 2003(accurate?)

bubbles are a means to transfer wealth,so don't be too surprised if you see another bubble materialise quickly,with a corresponding quick bust of the old one.....this will not be a soft landing.

Edited by oracle

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Fantastic - Can you use the Fibonacci system to predict the weather aswell?

Should be able to to as it occurs in nature so much?

Oh, no thats right, the weather is an incredibly complex system

Not at all like interest rates being decided by the VI spin of people blaming a seasonal downturn on the death of a pope...

Personally I'm still holding on to my tulip bulbs, its been about 400 years since the last crash so they're sure to rocket soon...

History repeats itself, it has to, noone listens...

Incidentally if anyones interested I've got 50% off some tickets for the Two Ronnies...

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Fred Harrison has spent much of his life understanding the role land plays in the development of our economies (and advising goverments over land policy)

The 18 year cycle is something that he has observed over hundreds of years.

If he's learnt the secret of eternal life perhaps he would be kind enough to share it with me?

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Fantastic - Can you use the Fibonacci system to predict the weather aswell?

Should be able to to as it occurs in nature so much?

Oh, no thats right, the weather is an incredibly complex system

Actually you can predict the weather. It tends to follow a cyclical pattern. It gets hot and sunny every 12 months. At the mid way point it gets cold and icy. (in the UK)

Your cheap joke about the Two Ronnies is offensive BTW. I would advise you to remove it.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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