Determining Market Cycles



From: Ethann Castell

Can anyone suggest to me to a means of determining where a state or region may be in its property market cycle.

Does anyone have a formula they use, a book they refer to or a favourite related web site ?

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Reply: 1
From: Jim Kouta

Yes, I was watching "Business Daily" last night and they said property falls sharply 6-12 months after a severe drop in the stock market as seen around the world in the last few days/weeks.

Does anybody have any statistics on this? And what did they mean by a "severe drop"?

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Reply: 1.1
From: See Change

After the last two sharp falls in stock market that I lived through , namely april 2000, and 89 the Residential Property market in Australia went up in the medium term.

In the immediate aftermath of the crash of 89 the market was very quiet.

Whether this happens this time is another question.

Happy investing see change
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Reply: 1.1.1
From: Paul Zagoridis

Thanks See Change, yes we have no idea what'll happen this time.

The greatest sign of heard mentality is believing history repeats itself.

It does, except when it doesn't.

Analyse an investment. Decide an exit strategy (good, bad and neutral).

Historically when the stock market falls, money flows into real estate over the next 6-18 months (increasing demand). Superannuation and other investment funds have a huge cash flow they must put somewhere. This normally doesn't affect residential investment directly as the funds don't invest in direct residential.

But that doesn't mean it'll happen again.

Paul Zag
Oz Film Biz is at
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