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Understanding property cycles in a residential market

Reed, Richard and Wu, Hao 2010, Understanding property cycles in a residential market, Property management, vol. 28, no. 1, pp. 33-46.

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Title Understanding property cycles in a residential market
Author(s) Reed, Richard
Wu, Hao
Journal name Property management
Volume number 28
Issue number 1
Start page 33
End page 46
Total pages 14
Publisher Emerald Group Publishing
Place of publication Bingley, England
Publication date 2010
ISSN 0263-7472
1758-731X
Summary Purpose – This paper aims to review property cycle theory and the relevance of the larger body of knowledge about cycles with reference to the housing market. It also aims to highlight the lack of research into property cycles in the residential sector on a suburb or smaller region basis, as well as the potential for increased knowledge about cycles to assist to avoid housing stress.

Design/methodology/approach – The paper conducts a literature review of previous cycle research and encourages the use of cycle theory. It discusses the established body of knowledge about business cycles and the office market sector, as well as investigating levels of housing affordability and how detailed knowledge about property cycles can assist to decrease housing affordability in residential areas, which will eventually experience a downturn.

Findings – It is argued that an increased level of certainty about cycle behaviour in particular suburbs will give households a higher level of confidence when considering whether and when to enter the market. Property cycle research has the potential to assist low-income homeowners to better understand the characteristics of cycles and associated risks in each residential.

Research limitations/implications – This is a conceptual paper and has conducted a review of cycle research and housing affordability in certain countries. Some areas or countries may be affected to varying degrees by property cycles and levels of housing affordability.

Practical implications –
In extended periods of high volatility it is argued that a better understanding of housing cycles will allow more homeowners to avoid negative equity and the stress associated with repossessions. Property cycles are unavoidable although there is typically relatively little information available in the open market about the timing and amplitude of cycles in individual areas.

Originality/value – This paper is unique as it highlights the potential for property cycles to be used to avoid housing stress in the residential market. Traditionally cycle research is used to increase returns and avoid downturns in the office and/or business sectors.
Notes Reproduced with the kind permission of the copyright owner.
Language eng
Field of Research 120503 Housing Markets, Development, Management
150403 Real Estate and Valuation Services
HERDC Research category C1 Refereed article in a scholarly journal
Copyright notice ©2010, Emerald Group Publishing
Persistent URL http://hdl.handle.net/10536/DRO/DU:30024131

Document type: Journal Article
Collections: School of Management and Marketing
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Every reasonable effort has been made to ensure that permission has been obtained for items included in DRO. If you believe that your rights have been infringed by this repository, please contact drosupport@deakin.edu.au.