The cyclical effect can be seen in property investment as any other business
, in this there are peaks and troughs. The house prices never risen so fast, this effect was found in almost every country. Many factors contributed to the property boom like ease of credit availability, which fueled the residential and commercial property bubbles and makes it easier for peoples with little deposit or no deposit to purchase property. When ever the investment market crash, investors start searching for better and reliable investment sectors. Like in 80's stock market crash and in 2000 dot-com bubble burst. Peoples start investing in property.
The history shows property values never seen this continuous risen. There are times when property values remains flat or no growth but there are times of extreme growth. This trend continues to be expected for future property investment. For investors point of view the important thing is overall market continue to rise providing strong supply and demand balance. To understand the property market you have look the actual returns and statistic. There are two fundamental forces which driven the market which are Fear and Greed, so positive attitude toward property investment is important.
In financial planning the key part is real estate. Our homes are the biggest part of our net worth. For security and stability we purchase a house, further more this also gives us social boost. We build equity in our homes which help our children education as well as our retirement. Fifty years back property really did not consider as an investment vehicle. Last few years property market has seen its booms and busts which help the property market to be declared as investment.
Even stabilized economies cannot escape from the fluctuations of the real estate cycle. As suitable condition prevail, house price can or do move up. Current rising interest rates, excessive debt levels, economic conditions and more global terrorism are the main factors of property values increase. Sustained high growth rates may not realistic but there will be a place for property.