The cycle runs upswing, boom, downswing, depression
A worked RES examination question on property cycle, from our Paper 1 bank — with the rule it turns on, and why each of the four options is right or wrong.
The question
Over four years a market runs through a full cycle. Prices recover gradually from a low; they then rise steeply, transactions peak and a fresh round of measures is introduced; activity then falls away and prices soften; finally transactions reach their lowest level, several developers default, and the measures introduced earlier are withdrawn.
Consider the following statements.
- (i) The phases described run upswing, boom, downswing, depression.
- (ii) Measures were introduced at the boom.
- (iii) Measures were withdrawn at the depression.
- (iv) How long a full cycle takes is governed by macro factors, including conditions abroad.
The answer, and why
Answer: D
The rule. The cycle runs upswing, boom, downswing, depression. Cooling measures are introduced at the boom and withdrawn at the depression. Cycle length is governed by macro factors, including conditions abroad.
Why D is correct. All four statements are correct and the complete set is the answer. The narrative maps exactly: gradual recovery (upswing), steep rise with measures introduced (boom), falling activity and softening prices (downswing), lowest transactions with defaults and measures withdrawn (depression).
The other options.
- A drops (iv)
- B drops (i)
- C drops (ii) — each is the answer of a candidate who doubts one true statement and retreats to a smaller combination.
Exam note. Where a stem narrates a full cycle in order, check each statement against the narrative rather than against memory. All four surviving is a legitimate outcome.
More on Property cycle
Want a full paper instead of one question?
The free half-paper is 20 questions with a Section B case study, explained to this same depth. The paid sets are ten full 80-question papers across Paper 1 and Paper 2, every figure checked against the current IRAS, CEA, HDB, URA and SLA position.
Looking for past-year papers? CEA doesn't publish them — here's what it does publish.
Independent study material. Not affiliated with or endorsed by the Council for Estate Agencies. No pass guarantee — for study use only.