We have 4 amazing property years ahead of us. Today is a great moment to get involved in property and the decision to do so will prove to be a lucrative one.
This email is the first of a series of monthly emails about the state and timing of the property market in the Property Cycle. Deep knowledge of this is fundamental to lucrative success as an investor in not just the property market but also the share market.
If you are a homeowner, property investor or looking at dabbing your toe in, you will want to follow this email series.
Before we get started on this educational journey it is important to keep in mind that the information that will be shared below and in future correspondence is general in nature and in no way should be considered as personal advice. The information shared contains researched information and personal opinions and prognoses of Daan Jansen, owner and founder of The Finance Alliance.
We follow the real estate cycle from an ‘America Perspective’ as America has been the leading driver in the real estate and share markets. Due to globalisation of economies the Australian real estate and share market are very much intertwined and we tend to see America going first and the markets in other countries follow. It’s not a prediction, it’s just what we’ve seen happening in the past.
The real estate cycle takes 18.6 years to complete and it always ends with a massive boom, followed by a massive crash. Repeat.
The last cycle ended in 2008, resulted in the Global Financial Crisis. The current one ends at the end of 2026 (for Australia this may (or may not) hit early 2027).
Leading up to end of 2026 we are going to experience the biggest boom we’ve ever seen, followed by the biggest crash we’ve ever seen, dwarfing the GFC. An important indicator of the looming crash will be: the world’s biggest/tallest/longest building is announced (funded by ridiculous amounts of debt).
The boom is fuelled by easy access to debt and speculation and once we are in till over our eyeballs it will all come crashing down.
How can you benefit from this knowledge?
Investing in property today is a very good idea as you’ll be able to ride the wave upwards. We can also ensure we are cashed up (using equity or selling) to ride the storm (foreclosure sales is why the market tanks so much, large amounts of people are forced to sell at the same time, having to drop prices dramatically to get someone interested enough to purchase. Purchasers that see the market dropping prefer to wait it out (it’s what we will be doing too!) as they will likely be paying less for the same property. Because most purchasers will wait, the sellers have to drop the prices even more, fuelling the fire of the downturn even more.
We will be cashed up for this and once we hit bottom we can make our life defining purchases, setting ourselves and our families up for generational wealth.
Over the next years we will be providing education on a few cycles to keep an eye on:
- Presidential cycle – 4 year cycle
- Real Estate cycle – 18.6 year cycle
- Kondratieff Wave – 54-60 year wave
With the above information in mind, news outlets fighting each other to sell you the bad news (making you click their articles, exposing you to more ads) mean very little to you from now on.
The market is not ready to tank, so the small correction we’ve seen in the past 6 odd months is temporary, fuelled by uncertainty of the masses. Once rates start stabilising this year, prices will start to go up again.
Whenever you see another article screaming about the 8% decline we’ve seen, or the ‘biggest decline since 2008’, or the biggest decline in this short of a period ever, just keep in mind: we are nowhere near enough into debt to fuel a crash.
During covid we’ve cashed up, knocked off debt, created a situation to fuel a the very biggest boom recorded yet.
Best be on the good side of it. Get involved.
Please feel free to respond to this email with questions you may have.
Lastly let’s also incorporate a monthly tip for a recommended book to read. This month: The Secret Life of Real Estate and Banking, written by Phillip J Anderson.
Reading this book 12 years ago changed my life. I have followed Phillip ever since.
It’s not a cheap book, but worth it’s price a million times over