Thursday, April 1, 2010

Global Real Estate - Long term forecast - Extract from our Special Report

Special Report covering Real Estate trends in different regions of the wold.
                               
This is a long term analysis of real estate using demographics, the interest rate cycle, currency trends, environmental / natural resources potential and social trends. In addition, I use Elliott Wave Theory which is based on the psychology of the masses.
                                                                                                 
We begin by looking at real estates long term price patterns. The charts spanning centuries reveal interesting structures which give an idea about the future of real estate.

We are not covering Africa due to the fact that demographics can not be used as a tool since so many people die young in this region. However, Africa has a large potential for development.

Interest Rates

The 54 year interest rate cycle has already turned up and we expect this rise to continue until 2030's. Interest rates could be higher than 20% in 2020's.
                                                                                           
The western societies are highly loan and credit based and will therefore be most effected by the rising interest rate cycle.                                                                                                                                                                              
Africa, Latin America, the Middle East and Asia are more cash based societies and thus less effected by the coming long term rise in interest rates. Introducing more credit and loans to these societies could have a potitive impact on real estate prices.
The United States and Europe need to deleverage their debt structure and this could be painful and take a long time.
See our "Interest Rates - the 54 year cycle" for more detailed analysis.
                                                         
The case of Japan


















Japan's demographics has been declining since late 1980's and accordingly property prices have fallen. Declining interest rates could not change the result of failed demographics in the case of Japan.

                                                                    
Western Countries vs. Japan





















                                                        
Assuming that the mentioned countries in the graph continue following Japan as they have been until 2005, a long term decline would be expected.


Global price survey - current

Here is an overview of m2 prices in different cities around the world. Buenos Aires is quite favourable with the lowest price for a capital.                                                    
                                                             

Latin America has low property prices in general compared to North America, Europe and Russia.

                                                                                                                    
The United States
                                                                                                                                
 

















Price indexes for residential and commercial properties in the United States are heading down continue.....
                                                                                                             

Read more from our Special Report " Global Real Estate"

- Analysing the impact of demographics, interest rates, natural resources and other factors.

- Identifying the countries and regions in a long term rise and a long term decline.

- Intermediate and long term analysis of the DOW Jones REIT real estate Index.

- Recommended vehicles to trade the index.

Special Reports can be purchases for USD 35. The reports are free for members. You can order the report from our web site elliottwavetechnician.com.

Geir Solem

elliottwavetechnician.com
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