Phases of the Real Estate Cycle to Understand before Investing

A real estate cycle is a pattern in which the market moves. Getting a clinch of it will make you understand the trend to design strategies, execute and analyse reports. An understanding of the upcoming trends will assist you in making informed decisions with buying, selling and holding of properties.

A Real Estate Cycle moves in a circle and can be classified in four phases –

The recovery phase is basically the recovery from the recession where the differentiation is not much. The market begins slow by recovering from the recession jolt where the rates are lower and the construction is slow. This period is highly conducive for investing and holding for a future profitable ROI.

As the name suggests, the expansion phase is happier times in the real estate market. A phase where construction and renovation begins, property value skyrockets and construction sees a new moment with real estate in high demand.

This phase is an on-set of recession where supply exceeds demand. The real estate investors acquire properties with an intention to hold and sell later at an attractive price. This phase brings a lot of investment opportunities like renting, leasing, etc. so as to keep the inflow of cash flowing steadily.

This phase sees a negative growth with low demand and splurging supply. The experts are divided on this phase. When some experts find this phase an opportunity to invest, some experts feel completely opposite.

The cycle however improves at its pace and today’s recession is a recovery tomorrow. Veva Realty does a thorough research of the market from time-to-time

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