In the real estate industry, from agents on the ground to principals, investors and economists, the current market conversation keeps circling back to the same question: is Australia still in a long expansion phase, or approaching the point where the cycle turns?
For property analyst and founder of Land Cycle Investor, Catherine Cashmore, the answer sits in what she describes as a structural pattern in land economics that has repeated across generations: the 18-year property cycle.
“The eighteen year cycle has been understood in financial markets for years and years,” she said.
Her argument is that what looks like disconnected property booms and corrections across decades is actually part of a broader rhythm in land values, credit expansion and investor behaviour. That rhythm, she says, has been documented in various forms since the early 20th century, particularly following the Great Depression.
“And what happened with the eighteen year cycle and how it related to real estate was that after the Great Depression, when markets crashed, there was a lot of misunderstanding as to what had occurred.”
That misunderstanding, in her view, led researchers back through historical property data, particularly in the United States, where early land economists began to map long-run cycles in urban real estate markets.
Among the most cited is Homer Hoyt, whose 1933 doctoral thesis examined a century of land values in Chicago.
“Homer Hoyt wrote One Hundred Years of Land Values in Chicago,” she said. “And while his analysis just focused on Chicago, although he speculated that it could apply to the whole of The US.”
Alongside Homer, Catherine points to Roy Wenzlick, a figure she describes as largely forgotten despite his influence at the time, as one of the early practitioners of cycle-based property analysis.
“You won’t find much about Roy Wenzlick,” she said. “He’s pretty much been written out of the history books, which is a dying shame,” she says.
“His pamphlet, The Coming Boom in Real Estate and What to DO About It, was published in 1936, and it became a bestseller … it outsold Gone With the Wind, at the time.”
Roy she explains, was not just an academic observer but an active market participant who produced annual real estate analysis for investors and institutions.
“He would produce what’s known as the real estate analyst… which is the first yearly… what [SQM founder and MD] Louis Christopher does now is what Wenzlick did back in time.”
In Catherine’s telling, these early researchers were observing something simple but powerful: property markets move in long waves rather than linear growth paths. Those waves are shaped by credit availability, speculation and structural demand for land.
But she is also clear that the cycle is not smooth. It is repeatedly disrupted by external shocks.
“What happened with the cycle was the two world wars interrupted it,” she said.
Even so, she argues the underlying rhythm re-emerged across the 20th century, aligning with major turning points in global and Australian property markets, including the early 1970s, early 1990s and the Global Financial Crisis.
“Then there was a pause, and then reignited again into the 1920s downturn, and then the 1929, 1930s downturn, and then into the 1950s downturn, into the 1970s downturn into the 1990s downturn and now and then into the 2008 downturn.”
For Australia specifically, Catherine believes the post-war period shows a broadly consistent alignment with this long-wave structure, particularly in capital city markets where credit and population growth are concentrated.
At the centre of her argument is the role of land itself, not just as an asset class, but as the underlying driver of economic behaviour.
“Everything we do is about land,” she said. “You know, the location of land, we live on it, work on it, sleep on it, eat from it. Derive all our sustenance from it.”
“We derive everything around us is made from land.”
From that perspective, she argues, property cycles are not separate from the broader economy. They are the mechanism through which credit, pricing and inflation pressures are transmitted.
“What really is the cause of the cycle is allowing people to speculate on land.”
That speculation, she says, tends to intensify during long expansion phases as rising prices reinforce expectations of further gains. Over time, this creates affordability pressure that eventually feeds back into the wider economy.
“At some point, inflation starts to take off,” she said. “Then the RBA step in and say, well, we better raise interest rates, which makes it even worse.”
It is at this stage, she argues, that late cycle behaviour typically emerges, including rising listings, reduced transaction volumes and financial stress among highly leveraged borrowers.
“You start to get cracks at the edge of the system, which are people going into a number of foreclosures, can’t pay their debts, having to sell off,” she said.
“Maybe there’s an uptick in the amount of stock on the market. There’s lowering in transactions because people can’t afford to buy.”
But Catherine is also careful to emphasise that downturns rarely present as uniform national crashes. Instead, they tend to be uneven, with variation between cities, suburbs and asset types.
“The median is very elusive,” she said.
“When you go back into the data and you look at what properties were selling for in 1989 and then what they sold in 1995… there’s plenty of properties in Melbourne that had their prices slashed in half.”
She adds that commercial property often experiences deeper corrections than residential markets, particularly when liquidity tightens.
“The commercial property market suffered a tremendously horrific crash in the early nineteen nineties and in the 1974 downturn,” she said. “Median prices dropped to 50 to 60% in real terms.”
Why today’s market still fits the long cycle debate
For Australia’s current market, Catherine argues the same structural forces remain in place, even if the environment is more complex than in earlier decades due to policy intervention, migration flows and lending regulation.
She believes taxation settings remain a central but often overlooked driver of long-term property behaviour.
“Unless we change the tax system, this cycle is going to continue to repeat,” she said.
She references past policy discussions, including the Henry Tax Review, which recommended shifting taxation away from income and productivity and toward land-based economic rents.
“Ken Henry’s (economist and former Secretary to Australian Treasury) tax review was really, really good,” she said. “It said you’ve got to take taxes off income and productivity… and put them onto land.”
However, she acknowledges that such reforms remain politically difficult, particularly in a country where property ownership and capital gains are deeply embedded in household wealth expectations.
At the same time, she notes that Australia remains tightly linked to global financial conditions, particularly the United States.
“We’re not divorced from The US. The US is the biggest economy in the world,” she said.
“When The US markets go, so will we.”
She also highlights changes in financial system structure since the Global Financial Crisis, arguing that risk has shifted into less visible parts of the lending system.
“A lot of risk was taken from the main banks and put into the private banking sector,” she said.
“Now you’re seeing cracks in that market.”
Still, she is careful not to present the cycle as an exact timing tool. Instead, she describes it as a structural lens for understanding where markets sit within long term behaviour patterns.
“We are approaching that next inflection point,” she said.
“If it doesn’t happen this year, it’ll happen next year… anywhere from the end of this year to 2027, 2028.”
And while the implications of any turning point will ultimately depend on policy response and global conditions, she argues the pattern itself remains consistent.
“These things tend to work like clockwork,” she said.
“And then when things happen… everyone’s like, oh, everything you said happened.”
For our real estate industry, the debate is less about whether cycles exist, and more about how they should be interpreted in a modern market shaped by credit, policy and global capital flows.
Whether the 18-year cycle is a predictive framework or simply a long-term observational lens, it continues to influence how parts of the industry think about risk, timing and opportunity, particularly as the next phase of the market begins to take shape.