What goes around comes around

An upcoming article that I have in the pipeline is going to be on the subject of whether our trajectory is finally following the upward curve of the real estate investment cycle after being stuck at the bottom of it for longer than we might have cared for – in other words, whether we are back on the road to recovery after a rocky year or so. The timing of it also coincides with another cyclical event: the March equinox. And so, as winter gives way to spring, I’ve been asking myself why cycles are so ubiquitous. And not just that, why do they exist at all? Why can’t everything proceed in a steadier, more predictable way? Some of them, such as the day-night cycle and the cycle of the seasons, we can’t even imagine the absence of – in fact, they are essential to the very functioning of our biosphere and all that lives within it. Then there are the cycles within ourselves – the reproductive cycle, the life-cycle of our species, as well as our own circadian rhythms and individual mood swings. When it comes to the latter, a kind of cycle-mania (which might be what I’m experiencing right now) has given rise to such pseudo-scientific theories as the existence of biorhythms, the notion behind which is that we can pinpoint and predict the changes in our moods using certain equations. A lot of new age “thinking” also posits the existence (again, without any evidence) of mysterious waves and cycles that govern our lives. Maybe we just have an in-built predisposition to interpret the world in terms of cycles?

Some cycles, however, such as the economic cycle, are indubitably real. The real estate cycle is a microcosm of this and has been divided by theorists into four phases: recovery, expansion, hyper- supply and recession. After almost two decades of covering the real estate market, several examples spring to my mind of companies who got carried away during the hyper-supply phase and as a result are no longer with us; but happily, there are also those who are still in business thanks to being a bit more savvy about how to invest at each point of the cycle. The economic cycle can often seem to us as an unnecessary cause of financial and societal distress. Why are the good times regularly followed by bad times and then by good times again? How are we supposed to invest or make any plans for the future when the economy is likely to go pear-shaped just when we least expect it? Can’t we somehow do away with these cycles? Politicians, in their eagerness to secure our votes, have naturally picked up on such anxieties. In the 1980s and again in the Noughties, some of our politicos were so bold as to claim that their brilliant economic policies had made recessions a thing of the past and that thenceforth we would enjoy steady, sustainable growth… forever. But despite all their efforts to do away with the boom-bust cycle, we have discovered to our cost that it is still very much with us. In each case, it was as though the economic cycle responded to these attempts to eradicate it by brutally reasserting itself.

As for the question of why cycles exist in the first place, well, when it comes to the cycle of the seasons, for example, with a bit of astronomical knowledge we can easily see that this exists because the Earth doesn’t rotate on an axis exactly perpendicular to its orbit around the Sun. (In fact, it would be a very odd state of affairs if it did.) This out-of-kilter aspect appears to be a common feature with a lot of cycles – that they are generated by a disharmony inherent to that particular process. Under this view, regularity always has this natural imbalance: a kind of perpetual striving towards harmony, which pushes and pulls the process one way and then the other to get it back in line. If this is true, it might, therefore, be better to ask why cycles shouldn’t exist.

Coming back to real estate (this article is also cyclical), this way of looking at things has been making itself manifest with such concepts as the circular economy and the recycling of building materials and waste. Hopefully, the interviewees for my next article will be able to confirm that we are finally on the upward curve of the real estate cycle once again. I, for one, am feeling more optimistic as we enter the warmer period of the seasonal cycle – and it will give me more opportunities for one of my favourite pastimes… cycling.