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The Second Half Surges

Updated: Dec 1, 2023

Remember, the second half of the cycle, historically, is stronger than the first.


The bullet points below set out the pattern.

  1. Growth in values was flat between 1955 to the early 1960s, then rose strongly through to 1974

  2. Growth from the late 1970s to the mid-80s was flat, then rose strongly between 1987–89 (the winner’s curse phase of the cycle)

  3. There was flat growth from the early 1990s to the mid-1990s, then the market boomed between 2001–08

  4. And again, the market was flat (outside of Melbourne and Sydney) between 2012–19, meaning we can expect price rises to continue through to 2026

Also, smaller capitals (by population), along with regional cities, do better in the second half than in the first.


You can see this in the charts below.


Smaller capitals (by population) go nowhere in the first half of the cycle but take off post the mid-cycle recession.


COVID exacerbated the pattern in this cycle.


In 2020, we witnessed the rush of migrants into areas once considered too remote, too small, lacking in amenities, culture, or sophistication — creating a boom in prices, with 30% plus returns in many regions between 2020 and the end of 2021.


The sharp pullback in 2022 — exaggerated by rising rates — was, in hindsight, inevitable.

Without continued stimulus payments and an easy lending environment, it could not be sustained.


However, now we have returned to a pattern that has been evidenced in all three recent cycles.


In the run-up to the peak — 1973, 1989, 2008 — rates always increase sharply alongside prices (much like they’re doing now, as we approach the expected 2026 peak).


According to the newest scoop from PropTrack’s Market Insight, real estate prices across the country are on a steady upward trend.


If things keep going at this rate, we will see them not only bouncing back to positive annual growth by July but going above their previous peak by January 2024 — just in time for the winner’s curse period of the cycle projected to be between 2024–26.


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