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Property Cycles – What are they?

house-on-graphBasically there are four:

Boom – Downturn – Stabilising – On The Rise

The problem with this is that not all of New Zealand is in the same cycle at the same time.  Each region, or even town, or part of a town, will experience a cycle at a slightly different time.

Given this situation, one needs to study each area carefully to look for trends.

Boom normally is caused by things like shortage of property listings, increase in people moving to this area, for example,  through more employment nearby.

Downturn occurs after a boom.  Basically the chewing gum has lost its flavour.

Stabilising is a good time for buyers, for example, things have settled and a rise is not far away.

On The Rise  This will occur with areas improving, new factories opening.  A positive vibe happening.

These four stages can take 7 – 10 years or more in some cases.

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