As long as borrowing rates are kept artificially low, the normal cycle is disrupted.
What I'm wondering is this: When interest rates start to go back up, what affect will that have on the cycle itself? Will it just continue as if it was never interrupted (and back to a normal seven year range) or will the long period of low rates have another negative consequence (foreseen or, as of yet, unforeseen)?
If I had to hazard a guess, and it is only a guess....when interest rates finally start back up the cycle will be a down cycle for a few years on real estate and probably after the down a prolonged flat period. I suspect the flat period will be longer than a "normal 7 year cycle".
Remember this will not be limited to real estate but to many investments. The stock market with rising rates will see a prolonged down. The bond market (existing bonds) will lose value. People and governments will have less money to spend. So unless there is a huge uptick in the growth of the economy to offset this, I think we will be in an asset decline mode for many years. The artificial boost of all the QE around the world will result I suspect in many years of no asset growth going forward or little in very niche areas and a general decline in most people's net worth.
In other words, I suspect that those who made a lot in net worth since 2008 decline will have trouble holding onto it as all / most asset classes decline. I suspect all the asset classes will have a prolonged cycle.
This is just my opinion. I readily admit I cannot provide factual data to support it...other than perhaps to draw from the Japanese experience over the past 20 years.