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Real Estate

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Dear  Armstrong,

Your work is absolutely brilliant – Thank You.

In your paper “a forecast for real estate”, your graph forecasts real estate trending down from 2015 till 2033. Based on this forecast will the real estate collapse begin in Australia after 2015.75? If so when will buying opportunities begin?

In some of your interviews you mention that private assets will rise sharply after 2015.75. Given the above time line for the decline in real estate does private assets refer to all non real estate assets (stocks ext.) ?

Many Thanks.

Kind Regards,


ANSWER: That chart is the U.S. market. However, the 2015 reaction rally in the USA has seen only the high-end of the market rise. The 2007 high remains intact for the broader market that peaked as a bubble. That applies to the speculative areas that were really in the low-end fueled by the banks.

The 2015 target is in REAL terms (adjusted for purchasing power of the currency). There will be a decline in the high-end markets for the USA, Europe, Asia, India, and Australia. However, this appears to be impacted by the likely rise in dollar interest rates, shrinkage in liquidity that should reduce banks’ appetite to lend, and rising taxes. These are all negatives. The cycle is prolonged because we are looking at a complete restructure in government and debt — the sovereign default so to speak. Real estate has counted on inflation and availability of loans, which has leveraged the entire market higher. So there should be a decline in REAL terms (under deflation), and only when the threat of taxation subsides can real estate make a comeback.