Commercial Property Cycles

How do you ever understand them?

Before talking to you about Commercial property, let’s take a quick look at Investment Cycles in general.

Investment CycleA recent AFR article contained this rather clever chart … showing an Investor’s mood at different points throughout the Cycle.

My reading would be that Australia is currently at the “Optimism” stage of the upturn — perhaps with some capital cities, a little more so than others. But generally, that’s about where most of us are at the moment.

Commercial Property Cycles

The CBD Office sector (the largest and longest) cycle has historically spanned about 18 years, from peak to peak. And its last high point occurred in 2008.

Commercial Property CyclesYou’ll notice from this chart on the right, that both the Retail and Industrial property sectors generally enjoy shorter cycles, within the customary 18 years for CBD Offices.

Therefore, all things being equal, the next boom should reach its peak in about 2026. However this time around, all things not equal.

NEXT WEEK: You’ll find out how things have changed, and why. Plus, discover when the next boom is likely to occur. And it will be a lot sooner than you might think!

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