The 18 year property cycle explained | Property Hub University 

I bought my property 5 years ago for 770k. Renovated it for 130k. Just sold it for 1.5 million. That’s a gain of 120k per year. For it to grow at the same rate, the property would have to be worth 2.2 million in 5 years which is pure insanity. It’s a 60 year old house in a sort of bad area in Toronto but it sits on a large piece of land near the subway and is nice renovated

Great video!

I’m buying my first property in the coming month, It seems I have 3-4 years of growth before the peak! Thanks guys!

How important is this cycle for quick flips? E.g buying, flipping & selling within 6 months. Thanks!

Last crash was 2007/08 which means we are 12 years on and we still have 5/6 years of strong growth if the cycle is accurate, think the north will do better than south and commuter towns will do very well

The long term trend of upward price is money or at least currency losing purchasing power.

Yes, there is always a crash. As Bryan Kavanagh notes in his comment, the reason for the cycle and its boom-to-bust character is a two-pronged failure of public policy. First, is the failure to recognize that housing units are assets that depreciate over time; they do not appreciate in resale value unless owners make significant upgrades as systems were out. A annual tax on the depreciated value of a housing unit is equivalent to requiring owners to pay a sales tax again and again and again. Thus, the optimum rate of taxation on the value of housing units is zero. On the other hand, the value of land (annually, its potential rental value) is a function of the locations aggregate advantages. Some of the advantages of any location come from nature (e.g., climate, topography, nearness to natural amenities -- a lake, river, or ocean, etc.). Other advantages comes directly from the quality of aggregate investment in public goods and services. None of these advantages comes from what any owner of a location does or does not do to construct improvements. Thus, the rental value of the location is justly public revenue. It is the failure of communities to establish a public revenue system consistent with these principles that results in credit-fueled, speculation-driven property market dynamics. Edward J. Dodson, M.L.A. Director School of Cooperative Individualism www.cooperative-individualism.org

Nice

I like it, please can you show a real life example maybe a graph to show exactly how this looks

Also need to take into account Construction/building phase. Lumber prices will soar again, elevating the cost of new construction homes and commercial buildings in 1-2tlyrs.. folks will stop building again, and force folks to look at existing homes. The old homes coming off the market are so rare...

I was eagerly waiting to find out where we are currently in the 18 year property cycle. 😔

Can anyone explain how the north east fits into this approximate 18 year cycle, prices have not recovered to pre 2008 prices in many areas; that's almost 12 years of almost no capital growth not even taking into account inflation?

So if people buy now would you say it’s a really poor time? I know it depends on each deal but according to your cycle we are at the peak of a long drop. But then brexit news had already made a small drop for the past 2 year. House prices now are definitely not as high as 2018

Yes, but a fundamental error in this discussion of the 18-year cycle is that land prices are a function of supply and demand. Not so. Population, zoning, size, shape, topography, location, supply and demand all affect a site’s RENT, but its PRICE is determined by (a) how little the government taxes its rent, (b) to what extent banks are prepared to advance credit against the site’s price, and (c) to what level interest rates are manipulated by central banks. It’s not widely understood that the PRICE of a piece of land represents the private capitalisation of its RENT, i.e., net of public charges - as with the valuation of any developed piece of real estate.

I do think we are near the winners phase

can someone tell me what phase we are in now My opinion is ressesion phase an i right if so from 2024 to 2028 is the time to buy

Hey Guys thanks for the great video! I’ve got a question that keep me up at night as an aspiring RE developer and your help would be extremely appreciated. I’ve recently heard that becoming a landlord in UK is becoming way too competitive due to people realizing that perhaps RE is one of the best ways for preserving and growing financial wealth, do you think such is true and further down the line the “supply” of real estate developers and landlords will surpass the demand for them in UK? In which case is it still worth perusing this career as a way of building financial wealth? (I am however very passionate about RE so giving in due to the competitiveness of the industry would be devastating.)

If you dont refiance to the hilt it cant be that bad surely? Ok negative equity, get higher fix terms on better rates. Have cash reserves. Let inflation of rents and eventual regain on capital take its course. We are in the business of long term investment. It clearly works. And the contradiction to the cycle is that land available is finite. You wait even 5 years, you put yourself or your legacy at risk of eventually having nothing left to buy. Sensible investing is always key, not halting production because of fear of a marker drop on your properties, which if you hold property is inevitable anyway.if the numbers add up, then keep going

Why don't you credit Phillip J Anderson?

Is the UK in the winners curse phase at the moment?

How do I find the quiz?

This is a myth to think anyone can time any market .You Can only do your best educated guess

Pretty theoretical. Would be more convincing if you overlay some actual data with this cycle.

Australian property was at all time highs around 2009. If you can see anything but up in the Australian property graph since 1996, you need your eyes checked. This cycle is BS. Good if you want to see something that’s not there though

This video does not explain why the cycle is consistantly18 years long, it does not explain the position taken by building contractors and how as the land becomes more expensive, they cease to be so active and consequently how their many suppliers get less business first--a situation which causes a more general slump in all kinds of other economics activities, too. Also there is no attempt about justifying the unethical behavior of the speculation in property values which is so clearly recommended! What do the presenters want? That we should all speculate like the bloody capitalists believe to be how to win in an unjust world?

The world is facing a global population collapse. This will be the end of the 18 year cycle where prices are always higher than the previous low. Study 50 years of housing in the city of Detroit for reference. The US will get a 35 year preview of what is coming by watching Japan, Italy, and Germany. Their birth rates went below replacement 35 years earlier than ours. 1973 vs 2008.