Where Are We On The Property Cycle?

Much has been written on the Property Cycle and the interested reader will be very familiar with the representation of the Property Cycle as a sinusoidal curve with various parts of the curve labelled in terms of the state of the Property Market (expansion, contraction, etc.) and the associated features of the market at that particular point of the cycle (the point at which one would expect high and low vacancy rates, increasing or decreasing levels of property investment, increasing and decreasing levels of construction or take-up of space, etc.). Little has been written, however, on the ìrealî shape of the cycle or on estimation of where we are on the property cycle at particular points of time. Is the cycle, in fact, as symmetric as is usually represented (typically with equal up-side and down-side amplitudes and similar time on the up-swing and down-swing)? This paper will briefly consider the shape of the property cycle together with the question of estimating our position on the property cycle. The latter seems like quite an easy matter to estimate a position on the cycle but there are, in fact, a number of considerations which make this not such a straight forward question to answer. Data from the Property Directions Survey (conducted semi-annually in Australia over the last 10 years) will be considered.