Property cycles

Discover what a property cycle is, how long they last and how they can affect the property market.

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A property cycle is a logical sequence of recurrent events reflected in factors such as fluctuating prices, vacancies, rentals and demand in the property market. Business and economic cycles typically last over a decade and they influence property cycles in different sectors.

There are two different property cycles. The first is the physical cycle of demand and supply which determines vacancy, which in turn drives rents. The second is the financial cycle where capital flows affects prices.

Property cycles are international and global forces. Economic conditions affect the real estate market. Globalisation of real estate markets has increased the impact of economic conditions on the market.

What is a business or economic cycle?

Business or economic cycles are fluctuations in economic activity which historical analysis will show proceed with upward spurts followed by pauses and relapses.

They are based around four key economic principles: depression, recovery, boom and recession (also frequently referred to as boom, downturn, upturn and stabilization).

How long do property cycles last?

Measured by peaks and troughs in performance, property cycles have durations ranging from 4 to 12 years, with an average of 8 years, although there are some authorities who refer to 18-year property cycles.

Property cycles are usually used as a measure for commercial property, but in the UK, where the volatility of the housing market plays important factor in the economy, the peaks and troughs of the residential market are commonly referred to as boom and bust.

There have been examples of boom and bust in the 1970s, 1980s and 1990s. Following the economic downturn from 2008 onward, there are signs of economic recovery and growth in the real estate market, illustrating how the market fluctuates in a relatively short period of time. 


We commissioned the University of Aberdeen and Investment Property Databank to undertake a study of property cycles in the early 1990s, the results of which were published in a the report Understanding the  Property Cycle (1994).

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