The 18.6-Year Cycle: Land, Credit and the Moon’s Mysterious Connection

In 2007 I was twenty-three. I took out a loan of unimaginable size and bought my first home. Half a year later I was standing in a shop counting coins — would there be enough to pay for my groceries. A car and fuel were no worry — tools of the trade. Everything else I felt up close. I didn’t lose my job, and that was the only reason it all turned out fine. But that feeling — when you’ve just signed the biggest deal of your life and the world around you starts to crumble — stayed with me.

A year later I started asking: why? Not “why did banks invent subprime,” not “why did Lehman Brothers collapse” — those are answers you can find in any documentary. My question was different: will this happen again? And if so — when?

The answer I found is strange. Not because it’s complicated, but because it’s simple. Uncomfortable. And very well documented. The builders’ sentiment index — 36, well below 50. [28] The numbers speak for themselves.

In this article I want to tell you about that cycle — where it came from, how it works, and why the Moon’s orbital mechanics may have a place here. I don’t know whether the Moon directly influences real estate markets. But you need to look at the data before dismissing the idea.

The Discovery: Two Hundred Years of Data That Economists Ignored

Homer Hoyt in 1933 wrote a dissertation on Chicago land prices from 1830 to 1933. [1] A simple method: he gathered all available transaction data, arranged it chronologically and simply looked. He saw a rhythm. Rise, peak, decline, recovery — and again. The interval between peaks: about 18 years. 1836, 1856, 1869, 1890, 1907, 1926 — each cycle ended with either a crisis or a sharp contraction. Hoyt didn’t give this much attention.

Fred Harrison returned to this tradition in 1983 with The Power in the Land. [3] A Brit, economist, journalist, advocate of Henry George’s ideas — but his cycle analysis was independent of political positions. Harrison formulated a claim that still sounds provocative today: land value is the central engine of economic cycles, not a peripheral variable. Banks finance land. Land prices rise because of credit. Credit rises because of rising land collateral. Everything goes in a circle — until it stops.

In 1997 he applied the model and said: the next peak — 2007–2010, following the 1989 UK peak. The crisis will be global. In 2005, watching the US mortgage market expand, he repeated: collapse — 2010. The collapse came in 2008. Harrison was off by one year. On the mechanism — not at all.

Philip Anderson, an Australian, investor, analyst, Harrison’s student — built a practical model and published it in The Secret Life of Real Estate (2008). [4] His forecast: real estate peak — 2025–2026. He made this prediction in 2008. At the time, prices in many markets were collapsing. During the period when most analysts were talking about “the new normal” of lower prices, Anderson was pointing at 2025–2026 as the next peak.

These four researchers — Hoyt, Harrison, Anderson, and later Bryan [2] with a quantitative analysis — working across different countries, different methodologies, different periods, all arrived at the same thing. Nearly 200 years of empirical sequence. You can argue about the causes. Denying the sequence itself — you cannot.

The Mechanism: Why Credit and Land Create an 18-Year Rhythm

The cycle mechanism is not mystical. Three simple facts — and their interaction over time.

Land in central locations is a fixed-supply commodity. You can build as many houses as you like in the suburbs. Creating more central Manhattan or London City land — no. When economic activity concentrates in cities — and in the service economy era it does concentrate — land rent rises. Ricardo formulated this back in the 19th century: production growth capitalises into the hands of rentiers, not labour. [6] The more productive a city, the more expensive the land at its core.

Banks lend against collateral. The most reliable collateral is land — it can’t be hidden, can’t be moved, can’t be destroyed. As land prices rise, collateral values rise, lending capacity expands, credit flows back into land. A self-reinforcing loop. Rising credit → rising land prices → rising collateral → more credit.

The cycle runs as long as the system works, and everyone thinks everything is fine. In 2007 I too thought everything was fine — I signed the loan with the confidence that the ground beneath my feet could never tremble. Hyman Minsky put it precisely: stability creates instability. [9] A long period of calm reduces perceived risk, increases the desire to borrow — and opens the path to speculation.

Minsky described three categories of borrowers that shift over the cycle. Hedge financing — a business or household can repay both interest and principal from operating income. Healthy structure. Speculative financing — the entity can only repay interest, and the principal must be refinanced or repaid from asset sales. Still manageable, but the system already depends on continuous refinancing. Ponzi financing — neither interest nor debt can be repaid from operating income. Only from asset sales at rising prices. When the system moves into Ponzi territory, it becomes dependent on perpetually rising prices. When prices stop — the cascade begins.

Bank credit cycles in their balance sheet structure follow loan pool correction and recovery cycles roughly every 15–20 years. The demographic variable adds its own: people buy their first home at 28–35 years of age. A large generation begins buying — it refinances or sells 15–20 years later. The credit and demographic effects converge at roughly an 18–19-year period. There’s no magic here — there’s structure.

World Mirrors: The Same Cycle in Different Languages

If the cycle only worked in Chicago or London — a local phenomenon, you could wave it away. But the same structure appears in the US, the UK, Australia, Ireland, Spain. And two important exceptions — Japan and Germany — show something no less important: the cycle is not a law of nature. It is a financial-institutional dynamic, dependent on credit structure and demographics. Change the structure — the cycle will change too.

The United States — cycle traces reach back to the early 19th century. 1836, 1854, 1872, 1890, 1907, 1925 — a sequence of peaks, each ending with a contraction or crisis. The Second World War disrupted the rhythm: the theoretical 1943–1944 peak didn’t happen, because the economy was mobilised for war. In the post-war period the cycle renewed. 1973 — the oil crisis era of expensive credit. 1989 — the Savings & Loan collapse. 2007 — subprime. [10] The Case-Shiller home price index in some US markets today nominally exceeds the 2006 peak. The NAHB builders’ sentiment index in February 2026 — 36, at a level last seen before the 2007–2008 crisis. [28]

The United Kingdom — one of the most studied markets. Harrison gathered UK land price data from the late 18th century. [11] 1973, 1989, 2007 — three modern peaks. After each — credit collapse, negative equity, banking regulation revision. After the bottom — the cycle again. In 2025 some London segments reached new nominal peaks, though in real terms still below the 2007 peak.

Australia — Anderson’s homeland and perhaps the clearest modern example of the cycle. In 2008–2009 Australia did not experience as deep a decline as the US — Chinese commodity exports and immigration maintained demand. Not a refutation of the cycle — an extended upswing phase. Anderson points to 2025–2026 as the peak zone. [12] In 2024 Sydney’s median home price exceeded 1 million AUD. Rental yield — below 3%, which arithmetically does not cover mortgage costs for a first-time buyer. When the numbers stop making sense — that is a late-cycle marker.

Japan — the strongest candidate for refutation, and here one must be honest.

1989 — one of the greatest asset bubbles in history. At the Tokyo commercial real estate peak, the land under the Imperial Palace was theoretically valued higher than the whole of California. [13] After the peak — prices fell 80% over 11 years and never returned. Japan missed not one but two projected cycle upswings. Demographics — the society was ageing fastest in the world. Structural deflationary spiral. “Zombie bank” policy — lending to insolvent companies, hiding losses, blocking credit restoration. Japan shows: demographic collapse can not just suspend the cycle, but break it.

Germany — the opposite lesson. Here historically there has been no marked 18-year cycle. Not because of different land or credit logic — because of institutional design. More than half of Germans rent, not own. [32] Tenancy agreements are long-term, tenant protection is strong, prices are regulated in many cities. The housing market was not the primary vehicle for credit expansion. When the mechanism changes, the cycle changes. Germany thus shows the same thing as Japan, from the other side: the 18-year rhythm is not fate — it is an institutional choice.

The Moon: Orbital Mechanics and an Inconvenient Correlation

My assessment: most likely a combination of simple coincidence and indirect climatic effect. The correlation is enough to pay attention. Not enough to prove causation. And perhaps there’s no need — it’s enough to know that two different clocks show the same time.

The astronomical fact is precisely measured: the Moon’s orbital nodes — the points where the Moon’s orbit crosses the Earth’s ecliptic plane — complete a full precession around the Earth in 18.612 years. [14] Called the Draconic year. Known to the Babylonians, Greeks, Mayans. Orbital mechanics, grounded in the laws of gravity — not astrology.

The Moon’s declination — the angle in its orbit from the equator — varies over those 18.6 years between roughly 18.5° and 28.5°. [15] High declination creates more intense tidal forces, low declination — weaker ones. The variation changes tidal intensity, ocean mixing, temperature distribution. Climatologists have documented this: Loder and Garrett in 1978 showed a connection between tidal mixing and the lunar cycle phase. [16] Yasuda in 2009 identified an 18.6-year signal in Pacific Ocean temperature data. [17] Amplitude — about 0.2°C. Measurable, but marginal.

Agricultural yields and commodity prices historically showed sensitivity to climate cycles — especially in pre-industrial economies where harvest variability directly affected economic activity. [18] If the lunar cycle modulates climate by even a fraction of a degree, this could have left traces in pre-industrial commodity price cycles. Benner’s data — pig iron, corn, hogs — is exactly the pre-industrial commodity cycle.

Sun vs Moon: Benner Cycles and Different Celestial Rhythms

Samuel Benner — an Ohio pig farmer. In 1875 he published a small book about price fluctuations and the best periods to buy and sell. [19] He took historical data on pig iron, corn and hog prices and looked for patterns. His formula — an 8-9-10 and 11-9-7 year interval sequence — was purely empirical. But the intuition behind it was clear: solar activity affects harvests, harvests affect prices, prices affect economic activity.

The solar cycle — about 11 years. Benner’s 8-9-10 sequence averages 9 years — close to the solar cycle, but not exactly matching. Some researchers interpreted this as Benner intuitively capturing a half-solar-cycle rhythm. Others — as a pure market pattern unconnected to astronomy. I lean toward the latter: the evidence for a direct solar-economic link is weak. [20]

What’s interesting: Benner’s panic rhythm — 16-18-20 years — overlaps with the lunar nodal cycle. Average: 18 years. Coincidence? Probably. But the overlap is there.

In the 2025–2026 perspective: Solar activity cycle 25 reached its maximum around mid-2025. [22] The lunar nodal cycle — also in the peak zone. Synchronisation of two clocks. Does this strengthen the real estate cycle peak? I’m not sure. But chronologically it fits with Anderson’s forecast — and with what the data shows.

It’s important not to mix levels. Astronomical cycles, if they have an effect, are marginal signals beside the dominant credit mechanism. The driver of the real estate cycle is bank credit expansion and land rent dynamics. Celestial rhythms may create a small additional impulse. Worth knowing — not to be confused with the cause.

The Cycle Hierarchy: Why It Matters Which Floor You’re Standing On

The 18-year real estate cycle does not operate in isolation. It is nested within longer cycles — and the current moment is unusual because several cycles are converging simultaneously.

The hegemonic cycle — Ray Dalio calls it the Big Cycle, about 80–100 years. [23] The United States after World War II became the dominant global power: the dollar as reserve currency, Bretton Woods, military-technological supremacy. This cycle is now in late stage: record public debt — over $38 trillion and still growing, [30] pressure on dollar status, polarisation as during the Vietnam era. The Big Cycle does not create the real estate cycle directly — but the backdrop in which the real estate cycle moves changes the consequences. A collapse in late hegemony is more painful than in the early stage.

Kondratiev waves — about 50–54 years — are related to the spread of technological innovations. [24] One wave covers about three 18-year real estate cycles. The 2007–2008 Global Financial Crisis came at a Kondratiev contraction stage: the internet boom energy was spent, the AI and biotech wave hadn’t yet reached full growth. That’s why 2008 was deeper than an “average” 18-year correction — because several layers collapsed at once.

Howell’s global liquidity analysis operates at a shorter frequency — about a 65-month period. [25] Liquidity cycles lead real estate price changes by 6–12 months. The 2022–2023 quantitative tightening sharply reduced liquidity — and real estate markets began correcting. The 2024 easing restored some liquidity — real estate stabilised or grew in some segments. The liquidity cycle suggests: the next liquidity tightening window — 2026–2027.

When multiple cycles converge — the base case for a crisis is greater than average.

2026: Local Observation

In 2026 alone, about $936 billion in commercial real estate loans are due to mature — one of the largest refinancing waves in history. [29] Some were issued in 2020–2021, when interest rates were near zero. Refinancing at 4–5% — two to three times higher interest costs. In the office sector, work-from-home culture has reduced demand: in some US cities occupancy is still at 60–70% of pre-pandemic levels. The Office CMBS delinquency rate — 11.8%, a record exceeding the 2008–2009 crisis peak. Not a cyclical slowdown — structural pressure.

NAHB index in February — 36, at a level last seen before the 2007–2008 crisis. [28]

That said, several factors are working against a sharp collapse. The Fed has tools — and demonstrated willingness to use them. The 2020 crisis showed: when a systemic threat appears, the central bank can intervene at a scale that would have seemed impossible in earlier cycles. Fiscal policy — governments have shown willingness to run deficits to support demand. Demographics — millennial cohorts in the US and UK are now in prime home-buying age, creating underlying demand. Capital flows from geopolitically unstable regions into US and UK real estate as a safe haven. All these factors can extend the end of the cycle. Not eliminate the dynamics.

What Would Show I’m Wrong

The strongest theory is the one that can be falsified.

If in 2026–2030 real estate prices in the US, UK and Australia do not experience a significant correction — more than 15% nominally or 25% in real terms — even under interest rate pressure and credit contraction, that is a serious argument that the cycle has broken.

Demographic pressure in the Japanese style on a global scale — if the first-home-buyer base were to sharply decrease by 2028–2030, the cycle could break not because of the credit mechanism, but because of demand structure.

Central bank intervention at an unprecedented scale — if the Fed and other central banks intervened with quantitative easing before the cycle correction could materialise, this would alter the timing and depth of the correction, though not necessarily prevent it entirely.

These are real scenarios. The cycle framework is probabilistic, not deterministic — and the context today says the probability base for a crisis is greater than average.

The Next 18–24 Months: What to Watch

The next 18–24 months will either confirm the cycle or provide new data about how it is transforming in the era of fiscal dominance.

The US office CMBS delinquency rate — if it crosses 15%, that is a sign of systemic bank balance sheet pressure, similar to subprime indicators in 2006–2007. Regional banks with more than 20% CRE concentration — the most vulnerable. Watch: whether any larger regional bank runs into public problems in the second half of 2026.

The home price-to-income ratio and 10-year bond yield dynamics — if the ratio continues rising above 2006 levels while yields are high, demand will structurally decrease without central bank intervention.

Australia — if Westpac or Commonwealth Bank significantly increase credit loss provisions, that is a sign that the real estate contraction is becoming systemic in Australian bank balance sheets.

Ir ciklas sako, kad laikas vėl atsistoti tvirtai. And the cycle says it is time to stand firm again.

▶ Sources and references

[1] Hoyt, H. (1933). One Hundred Years of Land Values in Chicago: The Relationship of the Growth of Chicago to the Rise of Its Land Values, 1830–1933. University of Chicago Press.

[2] Wenzlick, R. (1936). The Coming Boom in Real Estate. Simon and Schuster.

[3] Harrison, F. (1983). The Power in the Land. Universe Books.

[4] Anderson, P. J. (2008). The Secret Life of Real Estate and Banking. Shepheard-Walwyn.

[5] George, H. (1879). Progress and Poverty. D. Appleton and Company.

[6] Ricardo, D. (1817). On the Principles of Political Economy and Taxation. John Murray.

[7] Knoll, K., Schularick, M., & Steger, T. (2017). “No Price Like Home: Global House Prices, 1870–2012.” American Economic Review, 107(2), 331–353.

[8] Reinhart, C. M., & Rogoff, K. S. (2009). This Time Is Different: Eight Centuries of Financial Folly. Princeton University Press.

[9] Minsky, H. P. (1986). Stabilizing an Unstable Economy. Yale University Press.

[10] Shiller, R. J. (2015). Irrational Exuberance (3rd ed.). Princeton University Press.

[11] Harrison, F. (2005). Boom Bust: House Prices, Banking and the Depression of 2010. Shepheard-Walwyn.

[12] Anderson, P. J. (2009). The Secret Life of Real Estate and Banking. Shepheard-Walwyn.

[13] Noguchi, Y. (1994). “The ‘Bubble’ and Economic Policies in the 1980s.” Journal of Japanese Studies, 20(2), 291–329.

[14] Meeus, J. (1998). Astronomical Algorithms (2nd ed.). Willmann-Bell.

[15] Chapront, J., Chapront-Touzé, M., & Francou, G. (2002). “A new determination of lunar orbital parameters, precession constant and tidal acceleration from LLR measurements.” Astronomy & Astrophysics, 387, 700–709.

[16] Loder, J. W., & Garrett, C. (1978). “The 18.6-year cycle of sea surface temperature in shallow seas due to variations in tidal mixing.” Journal of Geophysical Research, 83(C4), 1967–1970.

[17] Yasuda, I. (2009). “The 18.6-year period moon-tidal cycle in Pacific Decadal Oscillation reconstructed from tree-rings in western North America.” Geophysical Research Letters, 36, L05605.

[18] Neumann, J. (1977). “Great Historical Events That Were Significantly Affected by the Weather.” Bulletin of the American Meteorological Society, 58, 476–477.

[19] Benner, S. T. (1875). Benner’s Prophecies of Future Ups and Downs in Prices: What Years to Make Money on Pig-Iron, Hogs, Corn, and Provisions. Robert Clarke & Co., Cincinnati.

[20] Pustil’nik, L. A., & Din, G. (2004). “Influence of Solar Activity on the State of the Wheat Market in Medieval England.” Solar Physics, 223, 335–356.

[21] Jevons, W. S. (1878). “Commercial Crises and Sun-Spots.” Nature, 19, 33–37.

[22] NOAA / NASA Solar Cycle 25 Prediction Panel (2019). Solar Cycle 25 Forecast. Prieiga per: https://www.swpc.noaa.gov

[23] Dalio, R. (2021). Principles for Dealing with the Changing World Order. Simon & Schuster.

[24] Perez, C. (2002). Technological Revolutions and Financial Capital. Edward Elgar.

[25] Howell, M. (2020). Capital Wars: The Rise of Global Liquidity. Palgrave Macmillan.

[26] Saville, S. (2023). “The 18-year Real Estate Cycle.” Steve Saville / Speculative Investor. Prieiga per: https://www.speculative-investor.com

[27] Turner, A. (2016). Between Debt and the Devil: Money, Credit, and Fixing Global Finance. Princeton University Press.

[28] National Association of Home Builders (NAHB) / Wells Fargo Housing Market Index. February 2026 data. Prieiga per: https://www.nahb.org

[29] Office CMBS Delinquency Rate Hits Record 11.8%, Much Worse than Financial Crisis. 2025 m. laikraštis. Prieiga per: https://wolfstreet.com

[30] US Debt Clock. Prieiga per: https://www.usdebtclock.org

[31] Bundesbank (2023). “Wohnimmobilienmärkte in Deutschland.” Prieiga per: https://www.bundesbank.de

[32] Destatis (2023). “Housing in Germany.” Statistisches Bundesamt. Prieiga per: https://www.destatis.de

If this text helped you see the context that’s missing from daily news — share it with someone who cares about it too. The best conversations begin with a good question.