Property Cycles, By Clare Regan

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As members of IPF (Investment Property Forum) Clare Regan and Lisa Morrison attended the recent seminar in Snow Hill Birmingham on the Nature of Property Cycles – Past, Present and Future.

Robin Goodchild, Senior Adviser of Global Research & Strategy delivered a long term perspective on the cycles in the property market, concluding that we are in a strong equity driven upswing – but not a boom.

The overall gist for the long term outlook is that there is no need to panic.  We had a major bust in 2007/2008 and since then have not had such massive growth that would cause another bust anytime soon.

He explained that economic downturns don’t have to cause a property bust and some lessons from past property cycles is that:

  • if values increase by over 25% in a 2-3 year period there is high probability of a bust
  • debt driven real estate markets are dangerous
  • people who have come into senior positions since the bust will have no experience of its effects.

Apparently it is typical for there to be 16-18 years between cycles, which would bring us in the vicinity of 2025.