August 9, 2017 9:20 am

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Akhil Patel: Most Western economies follow the US into and out of every cyclical peak. That includes the UK, Canada, Australia, European countries, and even Japan.

There is not enough historical data available to see whether the same holds true of emerging economies, like China for example. There is some evidence that East Asian economies have a real estate cycle with a boom leading into a bust and a financial crisis (as happened in 1997-2001). There was a marked slowdown in some of these countries 18 years after that (beginning in 2015). But it is hard to be definitive at this stage and is something I am watching to see how it develops.

We do know that demand from emerging market countries (especially China) affects real estate prices in developed economies. Chinese demand has been strong in cities like Melbourne, Sydney, Vancouver, and even London. This is a relatively new—but important—element of the cycle we’ll be monitoring.