2013 Spring

The Cyclical Nature Of The Property Market
Along with other forms of investment; it is widely recognised that property follows a predictable cycle.
The property cycle, if unimpeded, has thee recognised recurring phases of boom, bust, and recovery;
this is a consistent cycle which can be accurately assessed. The property cycle must have a ‘free market’
where ownership is attainable by citizens without significant Government restrictions, or any form of
ownership.
Boom
When the Boom phase
commences, most people
don’t think it will last because
they do not have the context
of understanding the property
cycle. It is not until prices have
increased to a noticeable level
that the number of buyers start to
overcome the number of sellers,
this margin increases rapidly as
prices are pushed higher in the
fierce completion, culminating in
a final and short spike in values
just before a collapse. There are
number of factors that fester the
right environment for a boom,
these factors start well before
the boom and some expire
during the boom. These are the
signs that the astute investors in
property pick up and make their
decisions whether to buy, sell or
hold.
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