The economy and our property markets move in cycles

One of the most significant trends seen over and over in the past almost 50 years of being a student of economics is that investment markets constantly go through cyclical phases of good times and bad.

However, it’s a common fallacy that Australian property cycles last 7-10 years.

They vary in length and are affected by a myriad of social and economic factors and then, at times, the government lengthens or shortens the cycle by changing economic policies or interest rates.

Market sentiment is one of the key drivers of property cycles and one of the reasons why our markets overreact, overshooting the mark during booms and getting too depressed during slumps.

Of course, cyclical events can also create opportunities.

Remember that each property boom sets us up for the next downturn, just as each downturn sets the scene for the next upswing.

But it’s important to try and avoid being thrown off well-thought-out long-term investment strategies by cyclical swings in markets.

It's very difficult to make sound financial decisions unless you know what you want to achieve/ If you don't have a plan you tend to default to what other people are doing or what the media is telling you.

RealRenta has all the tools that a property manager has but for less than ¼ the cost of a property manager.

Join now and the cost is less than a cup of coffee a week to manage your rental property.

RealRenta also has a free vision, so why not check it out.

Jason Gwerder
Friday, 26 May 2023

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