Magicbricks to scale up on back of robust ad revenues

With over a million customers perusing the website for properties, Magicbricks is sitting pretty, having turned black four years ago and plans to continue funding its expansion with internal accruals, says its CEO, Sudhir Pai, in an exclusive interview to DH. 

Remarkably, Magicbricks accounts 90% of its revenues flowing in from advertising, which is not its listings. The remaining 10% is divided between its interior, loan and other services. “Today, about 96% of the supply and demand comes on its own. We pay for maybe only about 4% of the total traffic on the site,” Pai said, contending that 40% of the country looking for properties comes to Magicbricks.

The firm, which counts over 15 service offerings beyond its core business operating as a search engine for properties across 400 cities, is planning to hasten its growth, going from a compounded annual growth rate of 20-25% these past four years to 35% in the next 5 years. To this end, it is taking calculated steps on all fronts - from enhancing security features on the website to expanding its home loan, interiors and relocation services businesses in new geographies.

For its customers it proposes to offer property visits and advisory services, free-of-cost, Pai informed. The platform will also scale up its home loan services in the next six months. It has tied up with over 40 banks and non-banking finance companies and is presently available in eight cities.

Privy to a plethora of data, Pai pointed out, “In the last 12 months, the real estate market has bounced back very strongly, with transactions exceeding the 2014 peak.” He added property buyers are now looking for bigger houses, since the pandemic redefined their housing needs.

On affordable housing, Pai explained: “The market is also shrinking from a supply perspective, because prices are also rising. If you want a Rs 50-lakh house and a 1,000 square feet property, you cannot exceed Rs 5,000 a square foot. It’s getting increasingly hard to find pockets in cities where you can price and sell for Rs 5,000 a square foot, with land prices shooting up, increasing the input costs for developers.”

Furthermore, prices have surged in the last one year, with a sequential rise of over 5% in the September quarter of the ongoing fiscal year. “What is happening is that while demand is going up, supply has shrunk at an aggregate level,” he underscored.

A view of Bengaluru’s city line. DH Photo/ Pushkar V

Sudhir Pai