Is the global property market about to crash?

We are in the final growth year of an 18-year cycle, says Fred Harrison. Find out why the good times are coming to end - and why the government is unlikely to come to the rescue.

Betting against the UK property market has been a losing proposition for years. And even though inflationary pressure, rising interest rates and troubles in the US and Spain have sent tremors through the UK market, most expect a soft landing. After all, we've been here before. In mid-2005, annual price growth was slowing, almost turning negative. And yet, as I forecast in MoneyWeek in August 2005, the UK was about to launch into the final phase of the cycle - a two-year period I dubbed the Winner's Curse, characterised by gazumping and reckless lending. Prices surged in 2006, as speculators sought capital gains from real estate.

But the good times won't last much longer. By the start of next year, prices will stall, before falling. I believe UK prices will fall by 20%-30%- and as we're seeing in Spain, Ireland and the US, the pain will not be limited to the UK. The crash will be a global event leading to a depression. The signs are everywhere: overblown real-estate markets in India and China, record prices for property in Latin America and Africa, the rush to erect record-high skyscrapers in the Gulf states- all point to property markets heading for a synchronised bust-up.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up