having only seen 1 property cycle, I am relying on past data. From what I can gather, the main CG’s seem to come from the 2 years emerging from the trough and the last 2 years. The last 2 years seem to be the most profitable, with usually 20%pa type returns. Cycle time seems to be 9-16 years with median 12 years trough to trough.
Syd (my estimate, inflation adjusted) : last cycle peak 1988, trough 1993 (5 years). Real price drawdown peak-trough 20%.
1979 peak, trough 1986 (7 years), 1974 peak 1977 trough (3 years). Peak to trough for last 3 cycles 3-7 years.
This is the problem with reliance on charts and statistical data. Times have changed. The world is becoming a single market place. Policies change and Government can manipulate market conditions. I would not give much wait to past data and concentrate on current policy and economic conditions both Nationally and Internationally.
Robert Bou-Hamdan
Mortgage Adviser
http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter – Click Here
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty LtdI tried using all that last time, it just got me confused
Well I would think that the new property cycle in Australia is well and truly on the way. Some facts about it Another Australian property cycle in full swing
Cheers
Dan
The good thing about property cycles is they move rather slowly compared to stocks and shares.
If you are studying the market all the time as professional investors do, you will be able to spot when the cycles are turning.
Of course; every neighborhood has it's own cycle as well, so you need to look on a macro scale as well as micro.I know some investors who only invest in one neighborhood and sit around waiting for years for the bargain to turn up; much like a spider waiting in a web for a meal to come along once in a while. You can do very well like this, but it is only one strategy.
If you don't keep studying the market you won't know when the cycles are or when the bargains turn up. Looking at past data doesn't tell you much other than past performance of an area. It won't tell you the future.
I like Warren Buffet's quote: "I buy my straw hats in the winter". He watches the seasons.
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