Is the 18.6-year property cycle dead? Australia’s 2025 market says yes. With a housing crisis, surging population, and rising rates, old predictions no longer work. See what’s really moving the market — and how to invest smarter.
You’ve probably heard it before: “The property market moves in cycles,” or “Wait for the crash — it’s part of the so-called 18.6-year property cycle.” But in Australia’s real estate market, those old predictions no longer hold up.” This theory, popularised by economist Fred Harrison, claims the Australian property market follows a predictable pattern of 14 years of price growth followed by a 4-year downturn.
But Australia’s property market doesn’t play by those rules.
At Search Property, we believe smart investors in Australia should look beyond outdated property market predictions. Today’s housing market is shaped by real-time factors like housing supply shortages, rising interest rates, and record-high immigration-driven demand — not a rigid 18.6-year cycle.
In this blog, we’ll break down why the 18.6-year cycle doesn’t hold up in 2025, what the real data says, and how you can make better investment decisions based on what’s happening now, not outdated predictions.
Australia’s housing supply is on a steep decline and by 2026, it's projected to hit its lowest level in over a decade. This sharp drop in new home construction will have serious consequences for both housing affordability and rental yields. According to current projections, just 79,000 new homes will be completed across Australia’s capital cities in 2026 a 26% decrease from 2024 levels.
What’s causing this collapse in supply?
This supply crunch means that for Australians hoping to own a home in a major city particularly in high-density metro areas the dream may soon feel out of reach.
For savvy property investors in Australia, this housing supply crisis presents both a challenge and an opportunity to secure high-growth, high-yield real estate investments before prices surge. With fewer homes being built and demand still rising, investing strategically has never been more important.
Australia’s construction industry is facing a severe slowdown, placing added strain on the already undersupplied housing market. Thousands of approved developments remain unbuilt, held back by high interest rates, rising construction costs, labour shortages, and lengthy planning approval delays. This is further limiting the supply of investment properties in Australia’s major cities, contributing to upward pressure on both home prices and rental yields.
In this environment, high-density housing like apartments is often delivered faster than low-density housing, which requires more time and approvals. For investors, this makes apartments a potentially more viable option in high-demand metro areas especially when balancing speed, affordability, and rental return.
Immigration has played a key role in shaping the current housing crisis. To understand this, let's break it down into two parts: the supply side and the demand side.
In the absence of immigration, the housing crisis might not have been as severe. Here's why:
However, even if we had fewer immigrants, you would still face significant challenges in the rental market due to supply shortages.
While immigration has added pressure on the housing market, it has also played a vital role in keeping the economy afloat. Immigration is one of the key factors preventing a recession in Australia. Although we are in a per capita recession (a decline in economic activity per person), the broader economy has been spared due to the influx of immigrants. This raises questions about whether the 18.6 year property cycle fully accounts for the role of immigration in sustaining housing demand.
Australia’s housing market is out of sync with its population growth. Pre-2020, the number of new dwellings being built closely tracked population increases. But since the pandemic, this balance has broken down.
While immigrants have helped fill labour gaps in construction, it hasn’t been enough to meet demand
Unlike highly volatile markets like cryptocurrency or shares, Australian real estate continues to offer reliable, long-term growth potential. Even if prices dip short-term, tight supply, population growth, and expected rate cuts point to a demand rebound.
This is why smart investors are positioning now, not waiting for perfect market conditions. While theories like the 18.6-year property cycle have gained attention, they often fail to capture modern economic forces like mass immigration, supply chain constraints, and policy shifts.
At Search Property, we help clients cut through outdated models and media noise by focusing on real-time data and smart investment strategy.
Navigating today’s market requires more than guesswork; it demands insights, timing, and experience. As a leading buyer’s agency, Search Property helps investors:
If you’re serious about building long-term wealth through smart property investment in Australia, book a free strategy call with our expert buyer’s agents. Discover how to secure high-performing investment properties and off-market opportunities before the next market upswing.
Disclaimer: Search Property Pty Ltd (SP) does not provide financial or investment advice and does not hold a financial services license as defined in the Corporations Act 2001 (Cth). Any advice given by SP is general in nature and does not take into account your personal circumstances or objectives, financial situation or needs.
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