By Don E. Gilbert, BCom, DipPropValTech – THE VALUER AND LAND ECONOMIST – NOVEMBER 1993
Paper written following the “overheating” of the property market in the 1980s and the subsequent downturn in 1989-92. It shows how an understanding of general economic cycles and how property cycles relate to them can help Valuers better account for future market conditions when assessing property values, rather than relying solely on past (historical) evidence, projected forward, which serves to magnify the “boom and bust “ of each cycle and deepen the pain of transition from one to the other.
The analysis and suggestions made in this article were validated by the sale of the Myer Centre Adelaide in 1996/97 at market value for just $151.0 million after it cost South Australian taxpayers over a Billion Dollars, who are indirectly still paying for it via the highest electricity prices in the World.