Property and the economic cycle: Building cycles revisited∗

Abstract

Summary The property market is subject to not one but several cyclical influences of different periodicity. These only combine to produce major speculative building booms when there is a particular convergence of market conditions involving strong demand growth, supply shortages and credit expansion. The recent boom and slump is the second of this type in the postwar period, and shows many similarities to that of the early 1970s, both in terms of its underlying causes and its destabilizing impact on the property market. Such a cycle is unlikely to be repeated until at least the middle of the next decade.