subject: British Economist Fred Harrison's "18 Year Cycle" Model [print this page] If the real estate market in 1998, the first year, the twelfth round of the real estate cycle has entered the year. Many signs are exactly with the British economist Fred Harrison's "18 year cycle" model increasingly similar.
Harrison has accurately predicted the United States and the United Kingdom several times the last three years of the bubble collapse. He believes that since the Gucci Sunglasses industrial revolution, a complete real estate cycle, maintained at 18 years. Such as the 1974, 1992 and 2010 U.S. real estate market can be seen as the lowest point of each round cycle. Harrison's study concluded that "prices will be up 7 years, and then fall short may occur, and then experienced rapid increases in 5 years, then followed by 2 years of madness (Harrison called the" winner's curse ") . The last is for 4 years or so to collapse. "He believes that this law is currently still at work.
Indeed, after a long period of 12 years, to promote continued expansion of the housing bubble are multiple factors showed a spent force in the trend? Although there are numerous factors that call prices, but the major factor is nothing less than a rigid demand, fiscal and monetary flood the land. If remove these three points, house prices bubble will lose the existing infrastructure.
In fact, after several years of a continuous advance, rigid demand has been difficult to support housing prices continue to climb. When prices have been a far cry from ordinary income, and the acceleration continues to widen the gap between house prices Gucci Outlet already bought into the bubble phase, house prices rose to 30,000, or 50,000, with most of the people has been completely does not matter. The price earnings ratio of 20 times more frequently the case, how long can the rigid demands, is doubtful. Therefore, I think that high prices are impeding the process of urbanization is precisely the biggest stumbling block, rigid demand could not be the driving force housing prices rebound. Rigid demand propped up the buyer, price control can not be reversed completely.
Over the past two years, China released nearly 18 trillion of new loans, of tension, a rapid surge in broad money supply. Momentum in the second half of the rapid rise of inflation, caused by the central government has finally issued the alert for the money over. Shift of monetary policy next year, and recently the central bank's monetary control frequency, monetary growth are bound to make next fall, the inevitable end of the pattern of currency blowout.
According to past experience, the annual amount of new loans remained at 3 to 5 trillion levels, fully guarantee economic growth above 8%. Even in 2004, the year before and after the overheating of the economy, the credit delta is only maintained at about three to four trillion. Therefore, the size of new loans in 2011 can be maintained at 5 trillion to good. While down significantly compared to the past two years, but for the normalization of China's economy, this is still the size of the amount of days.
Once again the times of high inflation sweeping the globe, other central banks will be completely ignored, but will all the energy used to deal with the deterioration of the inflation. Among them, the rate of the Federal Reserve may keep raising rates more than expected in Gucci Bags just one year to two years, the federal benchmark interest rate will move up from 0.5% to 4% or more is entirely possible. And if the U.S. benchmark interest rate to 4% of China's central bank will certainly have to enter the rate hike cycle, such as the benchmark lending rate close to 8% or even higher. These monetary tightening efforts, to combat the forces of real estate speculation will be enormous.
Although we do not see the possibility of the country's reform the tax system, the financial dependence of local government land looks unabated, however, the decline of land financial model trend was no longer doubt. Always limited urban land, planning area can not be extended indefinitely. According to the author's observation, in recent years, the cities can be seen everywhere in the zone, real estate, one after another wave of urban expansion, and ultimately manifested in soaring house prices and land prices, and this process has emerged in the country of features. Once the next few years, not to curb this phenomenon, then ten years later most of the city's land resources will be sold almost the same. More and more people have realized that land is being hollowed out China's future fiscal space for development.
Recent media reports, Shanghai, Chongqing, will be formally introduced next year or real estate tax. This of course is to improve the tax structure, but also to curb prices, but in my opinion is much more significance, which was the first, stepped in starting the reform the tax system. Only by allowing local governments to find new sources of income, land only with the end of the financial foundation. Otherwise, Tax-sharing system reform how also can't start.
Overall, the housing bubble is not likely to think about how crazy. Especially when the support price bubbles of the three most critical factors are faded on the occasion, "only up not down" the prices will return to normal time. Today, most people have realized that the real estate bubble is the biggest risk the future of China's economy, housing prices can not be a long time against the economic law, if the monetary tightening cycle will not relax because of the real estate slump and once again, if the "second Five-Year" step to transform the economic growth model solid stride, then the next three years, the real estate bubble is the trend will be discouraged.
