domino effect in property market
- Thread starter rodimus
- Start date
When you have a line of dominos and the first falls over, it pushes the next one over, which pushes the next one and so on. If the dominos are arranged in a pattern, the entire pattern gets pushed over. It looks really cool.
In the context of the property market, this might have a similar behaviour. If one area does something, the surrounding areas feel the effects. As the effect on the first area increases, the surrounding areas also feel greater effect. Then the next lot of surrounding areas start to feel a similar effect and so on.
Because of the pattern of localities in the propterty market, it's often more like the ripples in a pond.
It's also really cool, because if you can see the effect and the direction it's moving, it may give some indication of what's going to happen in an area where the effect is yet to reach.
Prices started going up quickly in inner city areas (< 7 km from CBD) of the capital cities about 4-8 years ago. Before long, prices in the next range started to follow the price increase and thus the price increase rippled outwards, even to country areas.
In the context of the property market, this might have a similar behaviour. If one area does something, the surrounding areas feel the effects. As the effect on the first area increases, the surrounding areas also feel greater effect. Then the next lot of surrounding areas start to feel a similar effect and so on.
Because of the pattern of localities in the propterty market, it's often more like the ripples in a pond.
It's also really cool, because if you can see the effect and the direction it's moving, it may give some indication of what's going to happen in an area where the effect is yet to reach.
Prices started going up quickly in inner city areas (< 7 km from CBD) of the capital cities about 4-8 years ago. Before long, prices in the next range started to follow the price increase and thus the price increase rippled outwards, even to country areas.
The Domino Effect was also the term used to create fear & doubt towards Communism in the 1950s & 60s.
It was used to justify the 'police action' in Vietnam.....
It was spruicked that if Vietnam fell to the Communists, Cambodia would follow, then Thailand, then Malaysia/Singapore, followed by Indonesia, then New Guinea and then Australia (presumably followed by New Zealand, but no-one really cared about that).
Needless to say, the domino effect didn't occur. It was purely a piece of political grandstanding, not a 'law of nature'.
Equally for property - it doesn't naturally follow that once one centre has increased in prices the next will follow
However, if you do your research & look for the market 'tells', it is in broad principles one way to follow the markets as they rise.
Cheers,
Aceyducey
It was used to justify the 'police action' in Vietnam.....
It was spruicked that if Vietnam fell to the Communists, Cambodia would follow, then Thailand, then Malaysia/Singapore, followed by Indonesia, then New Guinea and then Australia (presumably followed by New Zealand, but no-one really cared about that).
Needless to say, the domino effect didn't occur. It was purely a piece of political grandstanding, not a 'law of nature'.
Equally for property - it doesn't naturally follow that once one centre has increased in prices the next will follow
However, if you do your research & look for the market 'tells', it is in broad principles one way to follow the markets as they rise.
Cheers,
Aceyducey
I agree with Acey. The domino effect is just a theory, not a rule.
