The Looming House Price Crash: Fred Harrison on the 2026 Property Cycle

 

The Looming House Price Crash: Fred Harrison on the 2026 Property Cycle

Fred Harrison, renowned economic commentator and author, has long warned of the cyclical nature of property markets. In a recent conversation with Peter Smith, Harrison laid out a compelling and sobering analysis of the current housing crisis, its roots in economic rent, and the inevitable crash he predicts will unfold within the next 12 months.

The 18-Year Property Cycle

Harrison explains that property prices have followed a predictable 18-year cycle, shaped by a 14-year upswing followed by a 4-year downturn. This cycle, he argues, has been disrupted by COVID-19 interventions but is now approaching its peak. Despite stabilisation in global housing markets, Harrison cautions that this is not a sign of resilience but rather a precursor to a dramatic downturn.

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Misallocation of Wealth

A key theme in Harrison’s analysis is the misallocation of household wealth. Outside the United States, wealth has been channelled into property rather than productive assets. This trend, he argues, undermines national prosperity by diverting capital away from job-creating industries. In contrast, the US has invested heavily in digital technologies, which Harrison sees as a more sustainable path.

The Coming Crash

Harrison is unequivocal: a house price crash is imminent. He predicts falling wages and declining property values, with unpredictable regional variations. The convergence of global crises—economic contraction, climate change, geopolitical tensions, and mass migration—will amplify the impact. He warns of social chaos and rising unemployment, particularly among younger generations already burdened by poor housing conditions and exploitative rents.

The Taxation Trap

One of Harrison’s most striking examples is the story of Don Riley, a London property owner who profited immensely from public infrastructure investments. Riley documented how the Jubilee Line uplifted property values around its stations, allowing him to recoup more in land value appreciation than he paid in taxes over his lifetime. This, Harrison argues, exemplifies the injustice of current tax regimes, which reward landowners at the expense of working taxpayers.

Lessons from China

Harrison contrasts the UK’s predicament with China’s recent property collapse. While China suffered a dramatic downturn, it redirected investment into productivity, boosting exports and stabilising its economy. However, Harrison warns that declining Western demand for Chinese goods could trigger another crisis, compounding global instability.

The Betrayal of Future Generations

Harrison laments the reversal of a fundamental human aspiration: parents improving life for their children. Today, he argues, older generations live off future ones through government deficits and rising land values. This intergenerational injustice is exacerbated by poor housing policies and speculative land hoarding by developers.

The Path to Reform

The solution, according to Harrison, lies in restructuring government revenue systems. By shifting taxation from earned income to location-based rents, governments can incentivise productive investment and reduce inequality. He advocates for a gradual transition to protect homeowners and avoid financial shocks, ensuring mortgage payments are fairly split between banks and the public purse.

Dispelling Myths and Fears

Harrison addresses common concerns about land value taxation, including fears of corporate land grabs and homeowner vulnerability. He argues that properly implemented reforms would discourage speculative landholding and empower tenants by increasing housing supply and improving quality. Large corporations would lose their rent-seeking advantages, and landlords would be forced to compete on service and efficiency.

The Aristocratic Regression

Harrison draws historical parallels between today’s economy and feudal aristocracy. He contends that modern capitalism has regressed into a system where landowners extract unearned wealth, much like medieval lords. This, he believes, is the root of economic dysfunction—not the money system, which he sees as a symptom rather than a cause.

A Call for Practical Guidance

Many followers of Harrison’s work seek practical advice on preparing for the coming crisis. While he refrains from offering quick fixes, he emphasises the need for informed democratic engagement and policy reform. He warns against opportunistic schemes and urges citizens to demand accountability from lawmakers.

Conclusion: Hope Through Understanding

Harrison’s message is clear: only by understanding the mechanics of land value and economic rent can society begin to address the housing crisis. He calls for a shift from fear to hope, grounded in informed dialogue and systemic reform. The stakes are high, but the path forward is within reach—if enough people are willing to challenge entrenched interests and demand change.

Watch Fred Explain Here in His Own Words:

Further Reading and Resources

Fred Harrison’s work offers deep insights into property cycles and economic reform. Explore his books and website for more: https://shepheardwalwyn.com/fred-harrison-author/

  • “Boom Bust: House Prices, Banking and the Depression of 2010” – Amazon UK

  • “The Power in the Land” – Amazon UK

  • “Ricardo’s Law: House Prices and the Great Tax Clawback Scam” – Amazon UK

  • Fred Harrison’s official website – https://www.sharetherents.org

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