I have attached a snapshot of the PPI above. There are some interesting observations about the charts.
1. Property lags behind the economy as an asset class. The previous recessions occurred in 1985, 1997 and 2002. However, the property market only bottomed in 2Q of 1986 and 4Q of 1998. As for the technical recession in 2002, the property market did not rebound from the bottom sharply. It consolidated for a while from 2002 to 2004 before moving towards the upside gradually in 3Q of 2004
2. Timing of entry into the property market is of utmost importance. Those who bought at the peak of the bullish property market in 2Q of 1996 are probably still having losses for their properties at this point of time. This is rather similar to those who bought near the peak of the stock market in October 2007. I wonder how long will it take for them to break even on their investments in stocks.
Going by these past examples, the current recession is confirmed in 4Q of 2008 thus the earliest time that the property market will probably be in late 2009 or early 2010. Any comments or opinions regarding this ?
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