Forecast of development of real estate market in 2011

10.12.2010 00:00
Real Estate Market Analysis | Forecast of development of real estate market in 2011 Forecast prices of real estate market remains negative. The real estate market is experiencing very difficult times over the past 50 years, analysts believe. Unable to learn the lesson of history from the first time, be sure to come on the same rake again and again. This applies to the deep economic and financial crisis that engulfed the whole world. What is behind it? The answer is simple: cyclic processes on the real estate market, driven by credit. Living in the USA, UK, Spain and Ireland have begun to actively speculate in land and real estate. The negative consequences of such behavior is still poison the life of the world economy. In 1984 I bought a house in London. At today's prices, the land on which it is built, would cost me 100,000 pounds. Its price rose sharply, quite possibly, ten times. In this case, I could not implicated in such an impressive rise in price. This piece of land went up in price thanks to the efforts of others hard mode of urban planning and a generous tax policies - property tax is low, and the resulting profits and not taxable. Thus, it appears that I am a land speculator, a kind of mini-aristocrat, for which a regular appropriation of the results of the efforts of others is the first step on the path to riches. What I done to deserve such an increase in their welfare? Nothing. So clearly the consequences will be sad. First, the country needs to finance itself through taxation, ingenuity and vision. Taxes on labor income and capital gains tax cut and labor income and capital. However, this does not apply to the tax on resources because natural resources are granted. Such taxes reduce the unearned income of their owners. Secondly, the system triggers the formation of harmful political incentives. In a world in which people gained a huge debt to own land, increasing land prices will be greeted with "cheers", and everything will be done to prevent them from falling. Thus, we have played an eccentric performance: the newspapers proclaim the coming of the increase in home prices - the most important benefit. Those who benefit from such rise in prices - not just land speculators. They are inspired followers of the ideas market manipulation. For example, in the UK, landlords warmly welcomed the creation of artificial shortage of land by absurd restrictive regime for the control of urban planning. This is one of the most important ways to move wealth from the poor to the haves old boy. In his new book, David Uilletts, Minister of University Affairs and Science, addresses the issue of inequitable distribution of wealth between generations. Speculative land market - the main cause of the catastrophe occurred. Third, we are caught in a vicious circle: the opportunity for land speculation provokes the development of the credit cycle, and vice versa, again and again destabilizing the economy. Journalist Fred Harrison argues that this cycle duration of 18 years was totally expected and predictable, at least for him. In essence, the buyers have rented the property from the bankers, and instead played for promotion. The mass of agents profit from fees for training, a nice package and treat the fruits of a highly speculative. During long-term economic growth (the most recent cycle of growth in the UK lasted 11 years) they are enriched by an explosive surge in lending and leverage. When will collapse yesterday borrowers, financial institutions and taxpayers will suffer huge losses. This is nothing more than a giant Ponzi scheme with familiar sad consequences. Ultimately, according to Harrison, this way of doing things will lead to disaster. For a long time, we are convinced that the fee for using the resources should be unified for all and no increase for the individual owners. Nevertheless, according to Harrison, as a society, we socialize earned by their labor income (wages and salaries), while our public revenue (from land ownership) remains private. " Who would have thought that about the fairness of such a system, in practice it led to terrible results. Do we want to restart the credit-oriented process in the property market as soon as we can eliminate the effects of the previous? If the "crisis - it's a difficult situation, you want to take advantage of," now is the time to act. Complete socialization of the rental value of land will destroy the financial system and the welfare of significant portions of society. It is obvious that this is impossible. However, the socialization of profits from the current moment will be less painful. This decision will help cool the ardor of speculators. It will also shift the burden of taxation. H e is less important plans for the UK, concerning the revision of laws on urban planning. Many believe that such liberalization will affect the situation in rural areas. But these fears are totally groundless: Increase radius to 5 miles of London to increase the available space by 50%. Is it able to somehow influence the charming greenery of English land? No government is able to wean the British from their belief that the land speculation - it's way to riches. But we can at least try. The growth of housing costs and inefficient taxes - is in itself a bad thing. But the fact that speculative fever destabilized the entire world economy - is worse. Let this guess until only a few, but the time for change has come.

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Content tags: Overseas property
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