This property cycle is a concept that claims housing values follow a predictable pattern. It was developed by  British property economist, Fred Harrison, who came up with the hypothesis after studying housing prices from 1953 to the present.

There are four stages to this cycle: Crash & recession, recovery, market correction, and boom.

The length of each stage fluctuates slightly from cycle to cycle, but the overall pattern has been consistent in Harrison's last four cycles.

If we are following the 18-year property cycle, we are currently in the boom phase where prices go up rapidly. 

The boom typically lasts five years, so it should be over by 2025 when we expect the crash and recession phase. There is no guarantee that the cycle will repeat itself exactly each time. Interest rates, economic circumstances, and demand are all elements that can impact the duration and intensity of each stage.

Understanding property cycles could benefit us property investors and help us be more aware and cautious of the market trends we experience today. 

Have you been following the 18 year property cycle? 

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