What is the property clock and how does it work?

The property clock can help you determine the perfect time to buy and sell your investment.

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Whether you’re a first home buyer or an experienced property investor, you’ll probably be aware of the importance of buying or selling at just the right time. Most of us aren't trying to "time" the market, but are instead playing a longer-term game that starts with a fundamental understanding of the property cycle.

Property markets in Australia and around through the world go through a cycle, and if you manage to time your purchase or sale just right it can make a difference of tens of thousands of dollars. You can use a concept called the property clock to visually understand the property cycle.

Understanding the property cycle

The property cycle is a series of events that repeat themselves over and over in a cyclical pattern that impacts on property prices. This cycle can be broken down into four different phases: boom, downturn, stabilisation and upturn.

As our population grows the demand for real estate is increased, which causes an increase in property values. This demand is met with keen builders and developers constructing new dwellings to meet demand.

This demand may then peak, as an oversupply of properties can lead to a slump in valuations.

Thankfully, being a cycle for every downturn there is a new upswing towards another boom. Luckily property slumps in Australia have been reasonably temporary, with strong growth in our capital cities through 2021 expected to last into 2022.

What is the property clock and how does it work?

Investors can track the property market cycle using the property clock<, which is made up of eight steps that fall within the four property cycle phases.

The property clock is a useful method of tracking the property market cycle. It is based on the recognised stages of the property cycle: a “boom” followed by a downswing in prices, “bust” as the market hits the bottom of the cycle, and then a recovery period as the market builds towards the next boom.

property clockThis clearly-defined cycle can be expressed in the form of a clock. When the hour hand on the clock is at 12, the property market is in a boom period, demand is outpacing supply and prices are at their peak. As the hand moves down clockwise around the face, the market enters a downswing period and prices start to cool until, when the hand reaches 6, there is an oversupply of houses and the market bottoms out.

But then things start to turn around as the recovery period begins. Rental returns start to improve and interest rates fall, which means demand for housing increases and prices start to rise once again. This continues as the hand moves further around the clock face and up towards 12, the next boom period once again.

How do you identify a city or suburb's position in a property cycle?

Although Australia is spoken about generally when discussing the property market, each state and even suburb can be sitting at a different stage of its own property cycle.

There are many factors to look at when trying to identify where a city is sitting in a property cycle. The local economy, demographics, planned infrastructure and developments can all be key indicators of a suburb on the rise or about to bottom out.

Start with an online search. Most government websites provide community profiles that will detail information about future council plans or building regulations.

You can also access free suburb reports through the website Residex, which lets you enter your suburb, postcode and state to generate a PDF report in mere minutes.

Next look at the economic factors impacting prices. Look for areas with steady employment growth and finance pre-approval trends.

How useful is the property cycle as a concept?

The property cycle is handy as a tool to analyse the current market. It is not a predictor of future performance and should be used in conjunction with other sound research and expert advice.

Knowing the best time to buy within the property cycle also isn't much good if you buy a dud property. Although a useful consideration when searching for your next investment property, the property cycle is not always significant for most long-term investors' strategies.

How else can I research the property market?

Aside from using the property clock there are plenty of ways to dig deeper into the property market. This might be:

  • Asking local real estate agents, mortgage brokers or property developers about an area
  • Checking the local council website for any upcoming developments like transport, business networking or scheduled improvements to public facilities
  • Checking the census for detailed demographic information on a particular postcode

We've also covered off the other ways to research the property market here.

Compare the latest investor mortgage rates

years
Name Product Interest Rate (p.a.) Comp. Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment
Athena Variable Home  Loan
2.39%
2.39%
$0
$0 p.a.
60%
$585.25
Investors with large 40% deposits or equity can get this low variable rate. A competitive option for investors looking to refinance.
UBank UHomeLoan Fixed
1.99%
2.70%
$0
$0 p.a.
80%
$554.81
Limited time offer.
Investors can enjoy flexible repayments and an easy application process with this pioneering online lender. Apply by 30 June 2021 and settle within 90 days to get this low rate.
Greater Bank Great Rate Fixed Home Loan
1.89%
3.85%
$0
$0 p.a.
90%
$547.35
Lock in a competitive investor interest rate for 1 year, with just a 10% deposit required to secure this low-rate home loan. NSW, QLD and ACT residents only.
loans.com.au Smart Booster Discount Investor Variable Home Loan
1.99%
2.71%
$0
$0 p.a.
80%
$554.81
If you have an owner occupier loan with loans.com.au you can also get this very low rate variable mortgage for your investment property. Principal and interest repayments. Add an offset account for an additional 0.10% on your interest rate. Get your loan processed fast and settle within 30 days.
Mortgage House Advantage Investment
2.44%
3.11%
$0
$10 monthly ($120 p.a.)
80%
$589.12
This fixed investment loan has a 100% offset account. Principal-and-interest repayments. Requires a 20% deposit.
Well Home Loans Balanced Fixed Home Loan
2.29%
2.29%
$250
$0 p.a.
90%
$577.55
A competitive 3 year investor rate with principal and interest repayments. Optional offset account with a $10 monthly fee. Not available for construction purposes.
homeloans.com.au Low Rate Home Loan with Offset
2.59%
2.42%
$0
$0 p.a.
60%
$600.83
This competitive variable rate loan is for investors who want interest-only repayments. You will need a 40% deposit.
UBank UHomeLoan Variable Rate
2.74%
2.74%
$0
$0 p.a.
80%
$612.67
Get a discounted, low-fee investor loan from a convenient online lender. 20% deposit required.
Suncorp Home Package Plus Fixed
2.28%
3.15%
$0
$375 p.a.
80%
$576.78
Borrowers with 20% deposits can lock in a low fixed rate loan for three years. Eligible new borrowers can get the annual package fee reimbursed for the life of the loan.
homeloans.com.au Low Rate Home Loan with Offset
2.39%
2.41%
$0
$0 p.a.
80%
$585.25
This investment loan keeps fees low, has a sharp interest rate and comes with a 100% offset account. This loan is not available for construction.
Newcastle Permanent Building Society Fixed Rate Home Loan
2.29%
4.11%
$0
$0 p.a.
95%
$577.55
$2,000 refinance cashback
Competitive fixed rate for home buyers.Available with a 10% deposit.$2,000 cashback for eligible refinancers borrowing $250,000 or more.
Athena Variable Home  Loan
2.59%
2.48%
$0
$0 p.a.
80%
$600.83
A competitive investor variable rate that falls as you build equity.
UBank UHomeLoan Fixed
2.24%
2.64%
$0
$0 p.a.
80%
$573.72
Pay no ongoing fees on this investment loan fixed for 3 years.
ME Flexible Home Loan With Member Package
2.98%
3.43%
$0
$395 p.a.
80%
$631.88
Package loan for investors making principal-and-interest repayments. Low fees and 20% deposit required.
Well Home Loans Balanced Variable
2.24%
2.27%
$250
$0 p.a.
80%
$573.72
If you're an investor with a 20% deposit saved you can get this low rate mortgage. Not available for construction.
UBank UHomeLoan Fixed
2.49%
2.67%
$0
$0 p.a.
80%
$593.01
Lock in a 5 year fixed rate on your investment loan and pay no ongoing fees.
Athena Variable Home  Loan
2.49%
2.43%
$0
$0 p.a.
70%
$593.01
Athena's refinance offer for investors and owner occupiers.
UBank UHomeLoan Variable Rate
2.6%
2.65%
$0
$0 p.a.
80%
$601.61
Pay interest only repayments with this special offer for investors.
IMB Fixed Rate Home Loan
2.35%
3.33%
$449
$6 monthly ($72 p.a.)
90%
$582.16
NSW and ACT customers only. A 3 years fixed rate investor which allows extra repayments to be made.
Well Home Loans Balanced Variable
2.87%
2.90%
$250
$0 p.a.
90%
$623.03
Competitive variable investor mortgage to fund your property portfolio. You can add a 100% offset account for just $10 a month.Not available for construction purposes.
ME Basic Home Loan
3.28%
3.30%
$0
$0 p.a.
80%
$656.36
A no frills home loan for investors.
UBank UHomeLoan Fixed
2.09%
2.71%
$0
$0 p.a.
80%
$562.33
Limited time offer.
Investors can enjoy flexible repayments and an easy application process with this pioneering online lender. Apply by 30 June 2021 and settle within 90 days to get this low rate.
ME Flexible Home Loan Fixed
2.64%
4.86%
$0
$0 p.a.
80%
$604.76
Lock in the rate on your investment loan with one year. Requires a 20% deposit.
Athena Variable Home  Loan
2.69%
2.52%
$0
$0 p.a.
70%
$608.71
Investors with 30% deposits can get this fee-free variable rate loan. This loan has interest-only repayments.
homeloans.com.au Low Rate Home Loan with Offset
2.69%
2.52%
$0
$0 p.a.
80%
$608.71
A competitive rate with no application or ongoing fee. This loan is not available for construction.
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