Which Way Will the Housing Market Go from Here?

Dear Reader,

Note from Ryan Dinse

Since the stock market first took a dive in late February, everyone’s been asking us if we think the same fate awaits Australia’s property market.

Well, for the last few days we’ve been trying to address this question on your behalf, with the help of real estate experts Catherine Cashmore and Callum Newman, from Fat Tail Media’s Cycles, Trends & Forecasts.

So far, they’ve moved to reassure homeowners and real estate investors that we’re unlikely to see a major real estate crash this year…more of a slowdown.

But more interestingly, they say that this market slowdown was expected…and in fact they’ve been predicting it for years.

Now I know not everyone is super bullish on housing. I’ve (Ryan D) gone on record plenty of times with my own doubts. But this explanation merits further consideration. Especially as Catherine and Callum are two of the most respected real estate analysts in Australia.

In today’s guest essay you’ll get the chance to hear a conversation Cal and Catherine recorded a week or so ago with cycle guru and investment legend Fred Harrison (he joins on the phone from the UK).

They talk more about this idea of a ‘mid-cycle slowdown’ in the housing market…and go on to discuss where their analysis shows property is headed in the short to medium term…when the big real estate crash is finally likely to happen…why governments are ‘uncivilised’…and the future of real estate as we know it…

This is super interesting…read on below!

Which Way Will the Housing Market Go from Here

SPECIAL REPORT by Callum Newman
With Catherine Cashmore and Fred Harrison

Dear Reader,

Imagine there was a kind of ‘silent rhythm’ that guides all asset price movement…

…a predictable pattern that can help you forecast stock and property market booms and busts well ahead of time.

What kind of advantage could knowledge of that rhythm give you?

Well, someone who understands this advantage better than most is UK cycles guru, Fred Harrison.

Source: creative-conscience.org.uk

Fred, pictured right, predicted the financial crash of 2008 in 1997…

11 years before it happened!

He also predicted the recession of 1991 — back in 1983.

He made these remarkable forecasts using his knowledge of the 18-year cycle.

I first interviewed Fred back in 2015. And when he explained it to me — the relationship between bank credit and land values…how it waxes and wanes in a logical pattern — it just made perfect sense.

It helped solidify everything I’d learned up to that point.

Fred’s template — 14 years of generally rising prices, with a mid-cycle slowdown, followed by four years of falling prices — quickly formed the basis of my own investing strategy…

…and it’s this same strategy Catherine Cashmore and I share with readers of our newsletter, Cycles, Trends & Forecasts.

Anyway, with all the chaos and uncertainty of recent weeks fresh in the mind, I wanted to talk to Fred again.

I wanted to get his take on how the coronavirus crisis is affecting the 18-year cycle…and whether it reveals where property prices are headed from here.

You can listen into our conversation here.

(Catherine joins us part way through, as well.)

Fred is an intellectual powerhouse. But he speaks so plainly and eloquently, it really is a joy to talk to him. Please take this rare opportunity to listen to him in full flow.

You’ll learn…

• Why Fred believes the 18-year cycle will continue — after this mid-cycle slowdown — to push house prices up to our expected peak in 2026…

• How governments are preventing a much bigger, nastier downturn now and the effect this will have on land values…

• The reason politicians never address the dangerous and systematic issues in the economic system that cause these crashes in the first place…

• The distraction and foolishness of Modern Monetary Theory…

And more!

It’s a fascinating insight into a theory that explains a lot about why markets move the way they do…and how you can use this knowledge to predict what’s likely to come next.

Listen to our interview with the Grandfather of the 18-year real estate cycle here.

Sincerely,

Callum Newman For Money Weekend