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BOOM or CRASH : find a crystal ball?

Something I remember form my Economics A Level – when demand for goods or services exceeds supply – prices tend to rise!

How many people have you recently heard talking about the value of property? Property TV shows, office conversations huddled around the coffee machine, “it is mad”, “I can’t believe interest rates have gone up”, “my fuel bill has doubled”; does it seem that we are sitting in some crazy post COVID bubble about to burst?

Or are we in a BOOM phase?

Now I certainly don’t have a crystal ball, but being on the other side of 50, I can remember being in negative equity on my second home in the early 1990’s, waiting for years to sell just to break even. Bank of England Base Rate hitting 14.875%; fast forward to 2008 the most recent crash, something we can all remember. We saw 5 consecutive quarters where there was a real GDP reduction, noted as the worst recession since the Second World War.

But check out the Gov.UK site – an annual price rise to December 21 of 10.7%! And here it is in black and white.

So, the BIG question many people are asking, should I buy now or wait until after the crash?

Where is that crystal ball again?

Even though I have been in property for a long time I had never heard of the 18-year property cycle, an extremely powerful framework for informing on what is going to happen to property prices. If you have never heard of it before do not worry, many people haven’t! Just Google it – the economist Fred Harrison was one of the first people to identify it. The basic concept is property prices are cyclical and they will BOOM and CRASH and it will happen in a cycle over a period of 18 years, a set pattern is followed. 

SPOILER ALERT!!!!

There are many indicators pointing towards a period of rapid growth, have we just started a growth phase and are not yet in the final two years of the cycle? 

When recently pushed by Money Week for a date as to when the CRASH would be; Fred Harrison said – “It will be 2026”.

Our plans are based on seeing growth until the end of 2024 where we will then adapt our strategies – 2025 / 2026 with a higher purchase threshold towards high quality assets in high quality areas. Where you buy and when you buy becomes more important as the cycle moves towards the end of the 18 years. 

None of this is an exact science; but it certainly makes for interesting reading……….enjoy!

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