How to make money through real estate cycles

If you read the market right, you stand to gain! Many prospective buyers have posted their queries on Open House, the discussion forum on Magicbricks, seeking advice on whether to buy now or wait and speculating on what the market has in store. Magicbricks conducted an interactive webinar titled- ‘Real Estate- The most rewarding asset of the portfolio, if you read the market right’ to cater to such an audience.

E Jayashree Kurup, head-content and research, Magicbricks anchored the session. Here are some pointers from the session:

There have been distinct cycles in the property market

• Bull Run – 2006-2008
• Slowdown – 2008-2011
• Bear Run – 2012 – 2014

Going by experience and trends, here is how you can aim to make money through real estate.

In the realty market there are two development cycles - Brownfield Development Cycle, where old properties are re-developed. This started in London in a planned fashion. Land is sold historically. Since there is a big demand and low supply, values remain high. With re-development, one unlocks the value of land as there is fresh supply. The second development cycle is the Greenfield Development Cycle, where land is aggregated, generally in the suburbs and the peripheries. Since supply is sizeable, demand is usually low. Once development begins, livability quotient heightens and that is when property values rise.

In the Indian market, when a new project comes up the plots are sold, values are low and this is when the apartments are released and the values go up. When the critical values rise, an investor exits and the end-user opts to live in the area.

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MCHI-THANE has always been very clear that fine housing complexes and shopping malls cannot stand in isolation. A great City is the sum total of great buildings, great infrastructure and great people. MCHI has been committed to growth of the real estate sector and is credited with the harmonious growth and rise in quality and standards of construction in Thane City in the past decade.

Its aim as an Association of Developers has been to seek rational rules and regulations which are uniformly applied across the board as this will to a great extent result in speedy construction, cost reduction, fair pricing and a push for better quality standards at par with the developed world, with a high level of transparency.