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.