Thoughts for the Year 2025
Written on 3rd February 2025, updated with new details on the 8th and 16th February 2025
I almost didn’t write this blog or share my thoughts on the year ahead. Firstly, I really dislike seeing people predict the future when they have no idea what the year will bring. Secondly, I hope I’m wrong about my outlook because that would give me more time to prepare for the upcoming crash in the property cycle.
I am a firm believer in the hidden property cycle—the 18.6-year land cycle. Over the last 200 years, this cycle has averaged 18.6 years, with the shortest cycle lasting around 15 years and the longest stretching to 23 years. Historical patterns show that these cycles often bring about new political movements or economic booms.
Examples of Historical Cycles:
- 1929 property crash → Great Depression → Rise of Fascism worldwide.
- 1890–1891 crash → Socialist movements, including Vladimir Lenin’s activism.
- 2007–2008 GFC → Reshaped the political and economic landscape globally.
18.6-Year Property Cycle Timeline
| Peak & Crash | Mid-Cycle Slowdown | Major Event | Minor/Mid-Cycle Event |
|---|---|---|---|
| 1818–1819 | 1828–1829 | Panic of 1819 (US land speculation bust) | – |
| 1836–1837 | 1847–1848 | Panic of 1837, first global depression | – |
| 1854–1857 | 1866–1867 | Panic of 1857, financial crisis | – |
| 1872–1873 | 1882–1884 | 1873 Long Depression, global collapse | – |
| 1890–1891 | 1900–1901 | Australian Land Boom & Bust | – |
| 1925–1929 | 1937–1939 | 1929 Great Depression | July 1937: The Second Sino-Japanese War begins. Nazi Germany annexes Austria. September 1939: WWII starts. |
| 1954–1955 | 1963–1964 | Post-war boom, stock & property crash | – |
| 1972–1974 | 1981–1982 | Oil Crisis, property correction | Volcker Shock, high interest rates due to high inflation |
| 1988–1989 | 2000–2001 | Japanese Asset Bubble, 1989 crash | Dot-com bubble, 9/11 attack |
| 2006–2008 | 16th–17th Sep 2019 – Jul/Aug 2020 | Global Financial Crisis (GFC) | US/World Repo Crisis, global rate cuts, COVID-19 lockdowns & stimulus |
| 2025–2027 (expected) | 2036–2038 (expected) | Likely major correction post-2026 (I feel it may come early in 2025 between Feb to Nov) | Too far out to predict |
Australia’s Housing Supply Gap (2013–2023)
(All figures are approximate estimates based on data from the ABS, NHFIC, HIA, and CoreLogic.)
| Year | Homes Needed | Homes Built | Shortfall / (Surplus) |
| 2013 | 190,000–200,000 | 160,000 | (30,000–40,000 shortfall) |
| 2014 | 190,000–200,000 | 180,000 | (10,000–20,000 shortfall) |
| 2015 | 190,000–210,000 | 220,000 | (10,000–20,000 surplus) |
| 2016 | 190,000–210,000 | 230,000 | (20,000–40,000 surplus) |
| 2017 | 190,000–210,000 | 220,000 | (10,000–20,000 surplus) |
| 2018 | 190,000–210,000 | 195,000 | Balanced |
| 2019 | 190,000–210,000 | 175,000 | (15,000–35,000 shortfall) |
| 2020 | 180,000–200,000 | 170,000 | (10,000–30,000 shortfall) (COVID impact) |
| 2021 | 190,000–210,000 | 160,000 | (30,000–50,000 shortfall) (COVID supply chain disruptions) |
| 2022 | 200,000–220,000 | 150,000 | (50,000–70,000 shortfall) (Rising costs, labor shortages) |
| 2023 | 200,000–220,000 | 155,000 | (45,000–65,000 shortfall) (Supply chain & migration surge) |
Australia’s Net Overseas Migration (2013–2023)
| Year | Net Overseas Migration (NOM) |
| 2013 | 235,700 |
| 2014 | 184,000 |
| 2015 | 184,000 |
| 2016 | 207,900 |
| 2017 | 262,500 |
| 2018 | 248,400 |
| 2019 | 239,600 |
| 2020 | 194,400 (Border closures started in March 2020) |
| 2021 | -85,000 (More people left than arrived due to COVID-19 border restrictions) |
| 2022 | 303,700 (Borders reopened; major rebound in migration) |
| 2023 | ~500,000 (Government estimates; migration surged post-pandemic) |
This sharp rebound in migration has exacerbated Australia’s housing supply crisis, as construction has not kept pace with demand.Economic and Market Outlook
I see the change of the system. The system is fully loaded with debt, and in most countries, they won’t be able to pay it back, so they will have to inflate it away. The stock market appears overvalued, with some key indicators:
| Company | Date | P/E Ratio | Investment Recovery Time (years) |
| Tesla | 2/02/2025 | 198.33:1 | 198.33 |
| Apple | 31/01/2025 | 38.82:1 | 38.82 |
| Amazon | 3/02/2025 | 49.39:1 | 49.39 |
| Wesfarmers | 1/2025 | 32.18:1 | 32.18 |
These figures show that valuations are extremely high, meaning it could take decades for investors to recover their investment through earnings alone. Disclaimer: I personally like the stock market and own shares in companies I believe in. I DO NOT RECOMEND the above business listed for you to buy. This is NOT financial advice. I DO RECOMEND THAT YOU please consult a FINANCIAL PLANNER to determine what is best for your investment strategy.
Current Property Market Trends
The Australian property market is at an all-time high. The only exception may be Melbourne, where government policies have deterred investors, leading to 20,000 fewer rental properties. Despite these investment properties coming to market. The estimated shortfall is between 150,000 and 230,000 homes nationally.
Meanwhile, net overseas migration remains strong, increasing demand for housing. Australia, despite its vast land size, has only three major cities on the eastern seaboard and one in the west, supplemented by four satellite cities—Gold Coast-Tweed Heads, Newcastle-Maitland, Canberra-Queanbeyan, and Sunshine Coast.
Business and Economic Challenges
- Builders are going bankrupt, including those on government contracts.
- Small businesses—cafés, restaurants, and retail shops—are shutting down.
- Real estate offices are downsizing or closing completely.
- Star Entertainment Group, which owns three casinos (two in QLD and one in NSW), is struggling.
- High Vacancy Rates & Tenant Incentives: Office vacancy rates in Australia are at their highest since the early 1990s recession, forcing landlords to offer rent discounts and incentives of up to 40% to secure long-term tenants.
If the economy were strong, would we be seeing these widespread failures?
Points of weekness I see!
1. Commercial Office Market Collapse
- Valuations at Risk: Building values are tied to rental yields, and if demand for office space continues to decline due to remote work trends, valuations could fall sharply.
- Superannuation Exposure: Many Australian super funds have significant holdings in commercial real estate, meaning losses in this sector could hurt retirees and investors.
- Debt Concerns: A drop in property values could put pressure on banks and lenders with large exposures to commercial real estate loans.
2. Small & Medium Business Struggles
- SMEs Employ 64% of Australians: If these businesses fail, unemployment could rise sharply.
- Big Business Collapse Risk: If a major corporation collapses and defaults on payments to thousands of SMEs, it could trigger a chain reaction of business closures.
- Consumer Spending Downturn: As cost pressures mount, small businesses face declining sales and rising insolvencies.
Total Employment by Small & Medium Businesses
| Business Size | Number of Businesses | Employees (Approx.) | % of Workforce |
|---|---|---|---|
| Small Businesses (0–19 employees) | ~2.5 million | 5 million | 42% |
| Medium Businesses (20–199 employees) | ~50,000 | 2.6 million | 22% |
| Total SMEs (0–199 employees) | ~2.55 million | 7.6 million | 64% |
| Large Businesses (200+ employees) | ~4,500 | 4.3 million | 36% |
| Total Australian Workforce | – | 11.9 million | 100% |
(Source: ABS, 2023 Estimates)
1 for SME. Why Are SMEs Important to Australia’s Economy?
✅ SMEs Employ 2 Out of 3 Australian Workers – Meaning any downturn in this sector could significantly impact employment.
✅ They Contribute Over 50% of Australia’s GDP – Small and medium businesses are essential for economic growth.
✅ They Are Most Vulnerable to Economic Shocks – Rising interest rates, inflation, and declining consumer spending hit SMEs the hardest.
2 for SME. What Risks Do SMEs Face in 2024–2025?
🔴 High Interest Rates – Business loans & mortgages are more expensive.
🔴 Cost of Living Crisis – Consumers cutting spending = lower business revenue.
🔴 Rising Business Insolvencies – Many SMEs (especially in construction & retail) are collapsing.
🔴 Labor Shortages – Some sectors (hospitality, healthcare) still struggle to find staff.
🚨 If SMEs struggle, Australia’s economy struggles – since 64% of jobs depend on them. I own a small business with two employees (not including myself) and hope to expand to three this year. So I hope I am wrong!
3. Global Economic Shocks
- China Slowdown: Given Australia’s reliance on Chinese demand for iron ore and exports, a property collapse or financial crisis in China would significantly impact Australian GDP.
- US Recession Risk: Aggressive Federal Reserve rate hikes could lead to a global credit crunch, similar to the 2008 financial crisis.
- European Energy Crisis: Continued geopolitical instability (Ukraine war, Middle East tensions) could disrupt global energy markets, fueling higher inflation and economic uncertainty.
- Trade War Risks & Long-Term Opportunities: Rising geopolitical tensions and trade restrictions (e.g., China’s bans on Australian coal and wine, US-China tariff escalations) could hurt Australian exports in the short term. However, this could also push Australia to diversify its trade partners, develop local manufacturing, and create domestic jobs, leading to stronger long-term economic resilience.
- US Tariffs & Protectionism: Potential new US tariffs on Chinese goods or other key imports could disrupt global supply chains and increase costs for Australian businesses. While this could create short-term economic pain, it may also encourage Australia to strengthen trade ties with alternative partners and expand domestic production capabilities.
4. Government Debt & Fiscal Policy Risks
- Rising Government Debt: High debt levels limit the ability to introduce stimulus measures if a deep recession occurs.
- Budget Deficits & Spending Cuts: The government may have to raise taxes or cut spending, which could further weaken economic growth.
- Political Instability: Policy mismanagement or uncertainty could undermine business and investor confidence.
5. Housing Market Overvaluation & Affordability Crisis
- Severe Undersupply: Record-high housing prices and rental shortages are creating affordability challenges.
- Interest Rate Shock: Rising mortgage rates are causing financial stress, leading to potential forced sales.
- Construction Sector Weakness: Rising costs, labor shortages, and builder insolvencies could reduce new housing supply, worsening affordability issues.
6. High Interest Rates & Debt Burden
- Mortgage Repayment Shock: Fixed-rate mortgage “cliff” (borrowers moving from ultra-low fixed rates to high variable rates) could trigger mass defaults.
- Business Borrowing Costs: High interest rates are straining businesses, particularly those with large debt burdens.
- Financial System Risks: High corporate and government debt levels may create vulnerabilities in the banking system.
7. Household Spending Collapse
- Cost-of-Living Crisis: Inflation is eroding disposable incomes, forcing households to cut back on spending.
- Savings Buffers Depleting: Many Australians are running out of savings, increasing the risk of loan defaults.
- Retail & Discretionary Spending Impact: Businesses in these sectors are at risk of downturns, leading to job losses.
Historical Comparisons: Past Recessions vs. Today
| Crisis | Key Causes | Similarities to 2024? |
|---|---|---|
| 1991 “Recession We Had to Have” (Australia) | – High interest rates (17–18% cash rate) 🏦 – Excessive corporate debt 💰 – Property market downturn 🏠 – High unemployment (11% peak) 📉 | ✅ High debt levels ✅ Housing affordability crisis ✅ Rising unemployment risks |
| 2008 Global Financial Crisis (GFC) | – US housing bubble burst & subprime mortgage crisis 🏠💥 – Banking system near collapse 🏦 – Sharp global recession 🌍📉 | ✅ Housing market overvalued ✅ Mortgage stress rising ✅ Global financial instability (China, US, EU) |
| 2020 COVID Recession | – Economic shutdowns 🚧 – Government stimulus (JobKeeper, etc.) prevented collapse 💰 – Record-low interest rates kept debt cheap 🏦 | ❌ No government stimulus now ❌ Interest rates rising, not falling ✅ Debt overhang from stimulus years |
| 2024–2025 (Possible Future Crisis?) | – High inflation & interest rates crushing households 🏦 – Housing market correction? 🏠 – Global economic shocks (China, US, geopolitics) 🌏⚠️ – Business insolvencies rising 📉 | ✅ Most conditions of past recessions are present ❓ Will central banks reverse course (rate cuts)? |
Key Difference Between 2024 and 2008:
- 2008 was a banking crisis; 2024–2025 may be a consumer & debt crisis.
- Instead of banks failing, we may see households & businesses collapse under high debt loads.
Leading Indicators of a Coming Recession (2024–2025)
1️⃣ Interest Rates & Mortgage Stress 📈💸
✅ RBA Cash Rate at 4.35% (Highest Since 2011)
✅ Mortgage repayments up 50–60% for many borrowers
✅ Fixed-rate mortgage cliff (2024 impact: thousands facing rate hikes)
⚠️ Early signs of mortgage defaults increasing
2️⃣ Housing Market Risk 🏠📉
✅ House prices at all-time highs, but affordability worst in decades
✅ Construction sector struggling (many developers going bankrupt)
✅ High vacancy rates in commercial real estate (offices, retail)
⚠️ Potential correction if forced sales increase
3️⃣ Consumer Spending Collapse 🛍️🔻
✅ Retail spending slowing (major brands reporting weak sales)
✅ Credit card debt rising = consumers struggling
✅ Household savings falling (many dipping into superannuation early)
⚠️ Discretionary spending (restaurants, travel, retail) could crash
4️⃣ Business & Employment Risks 🏢📉
✅ Business insolvencies at decade highs (construction, retail, hospitality hit hardest)
✅ Job market softening (hiring freezes, layoffs rising in some sectors)
⚠️ If unemployment rises, mortgage defaults will spike
5️⃣ Global Economic Shocks 🌍⚠️
✅ China’s economy slowing (real estate crisis, weaker demand for Australian exports)
✅ US Federal Reserve holding rates high (risk of global liquidity crisis)
✅ Geopolitical tensions (Ukraine, Taiwan, Middle East) disrupting energy & markets
⚠️ If global growth slows, Australia will feel the impact
What MAY Happen If the Cycle Collapses? 🚨
If the current economic cycle peaks and collapses, the likely sequence of events would be:
Phase 1: Early Warning Signs (Mid 2024)
🔹 Interest rates stay high or rise further → Mortgage stress increases
🔹 Households reduce spending → Retail & hospitality slow down
🔹 Business closures & layoffs start rising
🔹 Global financial markets show instability
Phase 2: Recession could Begins (Early 2025 to Mid 2025) HAS NOT YET and May NOT!
🔹 Households start defaulting on mortgages (forced home sales increase)
🔹 Housing prices decline in some areas (especially overleveraged markets)
🔹 Businesses cut jobs, pushing unemployment above 5–6%
🔹 Stock market declines sharply, driven by falling corporate profits
Phase 3: Deep Recession or Financial Crisis? (2025 to 2026) HAS NOT YET and May NOT!
🔹 If unemployment hits 7%+, recession deepens further
🔹 Government may intervene (rate cuts, stimulus), but with high debt, options are limited
🔹 If a global financial crisis occurs (e.g., China or US banking issues), Australia is hit harder
4. Can Australia Avoid a Major Collapse? (Key Factors to Watch)
✅ If inflation drops fast, RBA may cut rates → Could soften the downturn
✅ If wage growth remains strong, households may survive rate hikes
✅ If the US avoids a recession, Australia’s exports (iron ore, coal, etc.) may remain stable
🚨 BUT: If the RBA keeps rates high too long, a major recession is likely in 2025–2026. HAS NOT YET and May NOT!
Final Verdict: Are We Nearing a Peak & Collapse?
🔴 HIGH RISK SCENARIO:
- Many economic indicators resemble pre-recession periods (1991, 2008).
- Housing & consumer debt are key weaknesses.
- Global risks (China, US, geopolitics) could accelerate a downturn.
- If RBA does not cut rates in time, household collapse could trigger a deep recession.
I don’t foresee a property market crash in Brisbane and to a less point Australia, because of under supply of new homes and incress to net overseas migration but I do expect:
- Slower growth rates in property prices.
- A global downturn, which could trigger financial stress.
- Increased government spending to counteract the downturn.
- I believe Brisbane will remain strong as we have the Olympics in 2032, which is only eight years away. We need significant infrastructure, including roads, rail, bus networks, stadiums, and an Olympic village. This investment is essential, as failing to deliver—like Victoria did with the 2026 Commonwealth Games—could damage Australia’s reputation and make it difficult to secure major sporting events in the future.
I am NOT an economist or a highly educated person with three degrees and a PhD. I am a small business owner with two decades of experience as an investor in property and the stock market. In my younger years, I was a day trader and was wiped out in the 2008 GFC. I lost over $1,000,000 in my trading account. The above is only my opinion—what keeps me awake at night, working instead of sleeping—and is NOT FINANCIAL ADVICE IN ANY WAY. I strongly recommend that you consult a FINANCIAL PLANNER to determine the right investment strategy for your situation. Remember, time in the market beats timing the market, and working with a FINANCIAL PLANNER will help you develop a solid investment strategy. No one knows what will trigger the next global collapse. If they did, they would prevent it from happening or make billions off it. Point is I am buyer’s agent and mortgage broker nothing more.
What I am seeing in my local community and Brisbane 🚨
I feel we are coming very close to the Peak and Crash:
Phase 1: Early Warning Signs (Mid 2024)
I am NOT an economist or a highly educated person with three degrees and a PhD.
Interest rates stay high or rise further → Mortgage stress increases. I feel that mortgage stress has set in and defaults are increasing, not at crazy rates but higher than 2021 or 2022. 2024: Mortgage stress increased, with 28.3% of mortgage holders identified as ‘At Risk’ in October 2024. This was a rise from 21.9% in May 2022, before the Reserve Bank of Australia’s (RBA) rate hikes began.
🔹 Households reduce spending → Retail & hospitality slow down. Reduced Consumer Spending: A Coles survey found 75% of shoppers dined out less, while 33% cut back on meat, opting for discounts and cheaper brands. Brisbane’s hospitality sector saw record tourism spending but faced a 49% rise in insolvencies due to rising costs and reduced consumer spending.
🔹 Business closures & layoffs start rising. In the last 8 months I have read that about 2,800 building businesses have gone bust. In my local area I have seen 8 businesses close (5 retailers, 2 cafes, 1 craft beer) their doors in the last 6 weeks (16/2/2025). I know of 11 more that are doing it tough. I just think of all those families that are now out of work. If you see a small business that has a marketing promotion going like “Buy 2L of Milk and Bread for $X” like a bakery, or “Buy 3 dishes and get free rice or bread,” have a chat to them; they may be doing it tough.
🔹 Global financial markets show instability. I’m a little bit worried about this as gold price has gone through the roof. (Gold is currently $4,539.03 at 2:06pm 16/02/2025.) NOT FINANCIAL ADVICE IN ANY WAY. Most people say gold is not important or needed anymore and that Bitcoin is the NEW GOLD or digital gold. Why are central banks buying gold and why is JPMorgan importing a $4 billion shipment in Feb 2025? Why has the price gone from $1,989.31 to $2,081.42 in July 2019 to just over $4,500.00?
I personally feel that Phase one is in full swing. That Phase two could start at any time. I have a really bad gut feeling that the RBA may not cut rates on Tuesday the 18th of Feb 2025. (I really do hope I am wrong as I know a lot of people are hurting.) The RBA may, because of inflation coming in the middle of the 2 to 3% range and unemployment being at 4% and record lows, say something like: “Now is not the time to cut rates because of inflation coming in the middle of the 2 to 3% range and unemployment is very low at 4%.” I am NOT an economist or a highly educated person with three degrees and a PhD. Written on the 16/02/2025
Phase 2: Recession could Begins (Early 2025 to Mid 2025) HAS NOT YET and May NOT!
🔹 Households start defaulting on mortgages (forced home sales increase) I have started to see these sales come up on different platforms. If interest rates get cut may drop off.
🔹 Housing prices decline in some areas (especially overleveraged markets) I am not see this yet. If interest rates get cut price may incress.
🔹 Businesses cut jobs, pushing unemployment above 5–6% I have not seen this yet. The rate as of December 2024 is 4.0%. The next round of date I can’t wait to read.
🔹 Stock market declines sharply, driven by falling corporate profits We saw a little drop in tech stocks, but all in all, the market has not seen a widespread drop. (I know this as my financial planner has some of my money invested in a hedge. So when the market goes up it goes down and when the market goes down it goes up) NOT FINANCIAL ADVICE IN ANY WAY. I strongly recommend that you consult a FINANCIAL PLANNER to determine the right investment strategy for your situation.
Phase 3: Deep Recession or Financial Crisis? (2025 to 2026) HAS NOT YET and May NOT!
🔹 If unemployment hits 7%+, recession deepens further Not here yet.
🔹 Government may intervene (rate cuts, stimulus), but with high debt, options are limited The goverment has done the following: In January and February 2025, the Australian Government implemented several financial assistance measures to support citizens facing economic challenges:
Cost of Living Payments: $255 Payment: Beginning January 2025, eligible Australians, including pensioners and low-income earners, received a one-time $255 payment to alleviate rising living expenses. $500 Payment: In February 2025, an additional $500 was disbursed to assist those struggling with increased costs of living.
Disaster Recovery Assistance: (THIS IS VERY NEED WITH WHAT HAS GONE ON UP THEIR. MY HART GOSE OUT TO THE FAMILIES UP THEIR.) North Queensland Floods: Following severe flooding in North Queensland during January and February 2025, affected individuals were eligible for lump-sum payments and income support. The Australian Government Disaster Recovery Payment provided $1,000 per adult and $400 per child, while the Disaster Recovery Allowance offered up to 13 weeks of income support.
- 🔹 If a global financial crisis occurs (e.g., China or US banking issues), Australia is hit harder Not here yet.
Where is the South East Queensland Property Market Headed?
Looking at past cycles, consider Stafford (2008–2012):
- 2008: +9.2%
- 2009: -1.9%
- 2010: +6.7%
- 2011: -5.2%
- 2012: -4.4% Total movement: +4.4% over five years. So less then 1% per year growth.
- 2008: +11.5%
- 2009: -6.1%
- 2010: +6.8%
- 2011: -12.1%
- 2012: +8% Total movement: +8.1% over five years. Just over 1% per year growth.
By comparison, in 2007:
- Stafford rose 24.1%
- Cleveland rose 9.4%
The Key Takeaway:
- You need a buyer’s agent who understands the full market cycle.
- We are nearing the end of the “Winner’s Curse” phase, where overconfidence can lead to bad investments.
- When the tide goes out, those without the right purchasing strategy may be left exposed.
- A crash may come sooner than expected, but the true economic wreckage is only visible after the dust settles.
I am NOT an economist or a highly educated person with three degrees and a PhD. I am a small business owner with two decades of experience as an investor in property and the stock market. In my younger years, I was a day trader and was wiped out in the 2008 GFC. I lost over $1,000,000 in my trading account. All of the above is only my opinion—what keeps me awake at night, working instead of sleeping—and is NOT FINANCIAL ADVICE IN ANY WAY. I strongly recommend that you consult a FINANCIAL PLANNER to determine the right investment strategy for your situation. Remember, time in the market beats timing the market, and working with a FINANCIAL PLANNER will help you develop a solid investment strategy. No one knows what will trigger the next global collapse. If they did, they would prevent it from happening or make billions off it. Point is I am buyer’s agent and mortgage broker nothing more.