Understanding property cycles for better investment opportunities

Understanding property cycles for better investment opportunities

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It’s a phrase uttered a lot by real estate and economic experts – ‘property cycle’.

And usually, it’s followed up with a negative connotation, that things will turn downward.

But how do these ‘experts’ come to this conclusion, and what does the ordinary human need to know about this important aspect?

“The most important thing about under in understanding property cycle is having a good grasp on economic conditions,” Princeton Mortgage Fund‘s Executive Director George Gadallah exclusively revealed to Ticker News. “The unemployment rate, the level of business confidence, a level of consumer confidence, after all, most people’s main expenditure is the roof over their heads.

“If all of these are going swimmingly, more likely than not, that you’ll have a strong value growth.

“And by the same token, as unemployment starts to increase and business confidence reduces, people are less likely going to be making investment decisions in that regard.”

So, how do you stay ahead of the curve? Gadallah thinks people are now aware of the approach towards market conditions, including property.

“The unemployment rate during the first lockdown approached ten percent ,” he added. “While now it has settled around the 4.2% range.

“The government put billions of dollars into supporting the economy, and this does flow into people pockets and expenditure.

“And the propensity to hedge against inflation is one of the best things, and property is a great hedge against inflation.”

Gadallah noted that a lot banks reduced their lending capacities, which has seen the rise of the non-bank lending sector.

“I recall there was only a handful of competitors in the space,” Gadallah continues. “Now, the non-bank lenders are significant.

“There are now over 100 non-bank lenders of any substance in the space in Australia at the moment.”

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