Property Market

Forecasting what’s next for the economy is usually considered nearly impossible. But here at Money Morning we don’t let that stop us from trying.

Understanding the underlying forces which drive the economy will go a long way to accessing the insight that few will ever attain.

It is often thought that forecasting the economy includes factors such as the movement of central banks or the stock market. Or even the movement in interest rates and inflation. But while they may play a small part, their impact doesn’t hold weight.

So what’s it based on? The real estate market.

Here at Money Morning, we believe the economic cycle is largely underlined by what happens in the real estate market. And the cycle simply continues to repeat.

Property Markets History

Homer Hoyt’s book published in 1933, One Hundred Years of Land Values in Chicago, identified the repetition of Chicago’s real estate cycle.

Hoyt’s study of history, which focused on land values, makes a strong case that the economy moves in a clear sequence of around 18–20 year cycles.

As Hoyt notes, real estate cycles are directly related to land price. The cycle repeats regardless of the government in power and their policies.

Since Hoyt’s book was published in 1933, little has changed in the real estate cycle. The cycle just continues to repeat itself.

The Global Financial Crisis wasn’t financial in nature, and so it appears that the reforms initiated after the GFC have only set in motion another real estate cycle.

Instead, we’ve seen a land crisis.

The underlying cause of the crisis may have been ignored, but the real estate cycle looks set to repeat.

Has COVID-19 Killed the Australian Property Market?

How is the COVID-19 health crisis impacting the Australian property market? You’d think all this would have a negative effect on house prices... Well, ordinarily. But this situation is anything but ordinary. And it seems the Australian government has other ideas.

The Bottom Is about to Fall out the Aussie Property Market. Here’s Why

The property market has been a one-way ticket to riches for most Australians. Not even the ferocity of the GFC in 2008 could put a halt to it And it cemented the belief that Aussie house prices only ever went one way — up. But as this amazing chart shows, we’ve been living a distorted reality for far too long…
Money Morning Australia