Good article from Michael Matusik on Property Observer this week.
The article starts with:
Given the amount of rhetoric about the housing cycle of late and the typical mudslinging that eventuates, it feels like it’s time, again, to discuss the obvious – that there is a distinct residential property cycle in Australia.
Past cycles have averaged between seven and eight years in duration.
They have largely been smooth affairs – only on rare occasions have they rapidly peaked and troughed. Also, I cannot find – on an Australia-wide basis, going all the way back through more than a hundred years of data – when a current market low fell below a previous trough.
But I do think that residential cycles will get shorter and that they will become more ‘lumpy’. Future lows might even drop below past furrows. There is also likely to be less growth on an annual basis, throughout an entire cycle, than in the past.
But essentially, what drives a property cycle and how it behaves is unlikely to change.