News has been rife this last week that PBL would be launching an online Real Estate Portal to rival realestate.com.au and domain.com.au . I received an email from ‘Insider Dave’ late last week and to be honest I should have taken it a littl more seriously. I do know that PBL was interested in real estate and have a real estate magazine and that they were planning something, but not that they were nearly ready for launch. The new site rumoured to be myhome.com.au and will no doubt place some pressure on realestate.com.au, even more so than the poor attempt at a real estate portal presented by justlisted.com.au .
So why will PBL’s attempt be more of a threat to realestate.com.au than justlisted.com.au’s? If you read today’s article on news.com.au you would think it may well be impossible, but that is because the so called analyst (these people know about money markets not online markets) Ivor Ries has no idea about what it takes to be successful. So this is why PBL are different to Justlisted and Sensis.
1. Television (Channel Nine)
PBL can draw on the many popular property lifestyle shows to promote their new entity.
2. NineMSN
NineMSn is one of the most popular portals in Australia and much of realestate.com.au‘s early success was due to the fact that real estate searches on NineMSN were through realestate.com.au
3. Experience
PBL can draw on the success of all of their online sites that are market leaders including NineMSn and Seek.com.au. Seek is by far the most popular jobs site in Australia and they will no doubt promote it through this site.
4. PBL Know
PBL know the Internet, whilst Sensis just know they have products that people need. There is a big difference, Sensis have without doubt been the biggest corporate failures in the Internet space in Australia’s history, whilst time and time again PBL create success stories (not always but most of the time), so PBL know that by creating successful partnerships they can bring not only agents onboard but also consumers.
INSIDE DAVE
I have to give ‘Insider Dave’ credit for this one and I have included his email to me below in its original format. He was out on a few things and some others will tell in good time, so thank you Dave!!!!
“A new real estate site is likely to be launched in australia in the next few weeks called www.propertyseek.com.au
- The site will be a venture between seek.com.au and 4 of the franchise group head offices.
- The franchise group head offices will own equity in the new business
- Offices will pay $175 per month to advertise all their listings
- Offices will not own any equity – just the head office
- The franchise groups participating appear to be lj hooker, raine and horne (nsw), elders and c21
- Is this just anoter version of propertypage?
- Is this a threat to domain and realestate.com.au or just another money grab by the franchise groups?
Seek has 2.2 million visitors each month, i believe that domain has 1.6 million and realestate.com.au has 3.2 million … how many job hunters will look at real estate too?
Could domain and realestate.com.au go into jobs? Will it affect seek’s margins and therefore share price?
…………..Dave
25 Comments
Tim R
Well Well, it’s about time.
If PBL can take the place of realestate.com.au on NineMSN and charge only $175 per month, that combined with PBL’s other media outlets for promotion will mean realestate.com.au’s days of rorting Australian real estate agents will be over.
The agents will desert REA in their thousands and who could blame them.
I notice the REA CEO sold 400,000 shares just prior to this being announced, funny about that. I think we may see the sale of a lot more shares once this starts to take hold, in fact News Ltd may lower their offer of $2.50 when they get wind of this.
Go for it PBL, there’s a lot of money out there for the taking even at your lower rates but you MUST replace REA on NineMSN to achieve success.
You will get rich and be the darling of real estate agents throughout Australia for saving them from the current regime of extortion.
Tom
I think that your more likely to see a tie up of realeastate.com.au, mycareer and careerone to create a serious rival to SEEK.
SEEK CEO Paul Basset recently stated that they has considered getting in to realestate online media, but had decided not to persue it due to cost considerations and the dominance of the current players in that market.
Tim R
No match for PBL if they have their act together.
You see agents don’t like realestate.com.au and without the agents all REA staff would be looking for rental property on Myhome.com.au instead of dining out on grossly inflated fees.
The day may be coming, then if Google get into the real estate ads act with a free service, well the mind boggles…
Tim R
AND furthermore – I think the coments of Paul Basset are a smoke screen, if he knows how easy it really is , and I think he might, he’ll be salivating at the prospect.
Peter
Well all I can say guys is – competition is a good thing and if it can place pricing pressure on realestate.com.au then all the better. I think this is the major complaint I get with agents. REA will say that agents sell listings because of realestate.com.au and this cannot be denied. However this does not mean that pricing should just keep going up…..
I think we may see next year (if PBL make some inroads) that pricing may stay the same or even be reduced. It wioll all come down to the success of other sites. However we can not only think of the pressure this will have on realestate.com.au as domain.com.au will be the first hurdle to overcome for PBL and only then will they be taken seriously. Interesting times ahead!
Simon Baker
Peter
I read this entry and the Crikey article with some interest and i thought i would make some comments on what has been discussed above.
I noticed that you did not mention domain.com.au. I would have thought that if PBL entered the market, they would probably want to target domain.com.au as much as ourselves, if not more.
There is some comment above regarding the cost to advertise on realestate.com.au. We have publicly stated that the average agent pays $570 per month to advertise an unlimited number of listings. This equates to an average revenue per month per listing of around $15. It must be noted that in NSW, domain and ourselves charge similar prices.
Our entry level subscription in which you can advertise an unlimited number of properties is around $350 per month or $4,200 per year. On a comparative basis, $4,200 probably get your 1 or 2 pages in a newspaper for 1 week.
In the Crikey article it refers to the cost to list on the PBL website as potentially being $175 per month increasing by 30% at the end of the first year. While this is certainly less than $570 per month, it does not take into account how many people are visiting the sites.
There were 3.1 million visitors to the realestate.com.au in August and 1.6 million visitors to domain.com.au. It is very hard to start from scratch and generate 1 million visitors let alone 3.1 million. You just have to look at Justlisted and Homehound that have both been in the market for quite a while and repectively had 154,000 and 192,000 visitors in August.
I would like to finally address the comment about advertising on ninemsn. We have a number of content distribution agreements in place (including having listings on ninemsn) and in total these drive less than 10% of our total visitors.
I am sure that the next 6 – 12 months will be very interesting and we love the competition as it keeps us on our feet and striving to continually improve customer service.
Peter
Simon Thanks again for your valuable input. I agree with what you have said about homehound and justlisted but even you must agree that NineMSN poses a much much greater threat.
I am sure you will realise that if a Google entered the real estate space it would be an even greater threat as they would no doubt charge nothing for this service and their reach is global. This may not only provide a threat to established portals but also to agencies, as I have no doubt they would open it up to everyone.
As agents are now in a relatively cool period and hoping for a great spring, costs do come into it. The majority of agents still feel they have to advertise in traditional newspapers because of their fear of losing vendors to other agents. Once this eases and agents abandon traditional press for marketing listings you will find this to be not so much of an issue.
However, costs with REA are always on the lips of all the agents I talk to…
Thanks again for your comments……….
Tom
Competition is good from an agent and consumer aspect. However, another new entrant in this market, even with the backing and expertise of PBL, doesn
Peter
Tom, thank you for yet another great post. I think some agents are digruntled somewhat, not because of the pricing of realestate.com.au but just because prices keep on rising and it is money directly from their pockets. Many of todays agents see the web as an expense because they do not charge vendors for Internet advertising (mainly because their competitors don’t) . Whilst many still charge them fees for traditional advertising such as in newspapers, paper property guides.
Tim R
Where will I start –
I didn’t mention Domain.com.au because PBL will go for the lead not second place, don’t be childish.
Re NineMSN – regardless of your stats claims whoever partners with NineMSN will lead I have no doubt about that. It would take 12 maybe 18 months and the lead would change as NineMSN has all new Australian traffic by default.
If it’s only 10% of your traffic would it not be financially prudent to drop them ? Yeah sure……….
To downplay the importance of NineMSN is simply a diversionary tactic.
Don’t bother mentioning Just Listed or Homehound they are pathetic efforts by people who know nothing about the Internet and seem to have money to burn just to prove the point.
They should have simply donated the funds to a charity though I guess they may have needed some tax losses.
If they were serious efforts those responsible should be brought to account for an obscene waste of company funds.
What they did has absolutely nothing to do with what CAN quite easily be done by those in the know.
As for you Tom, you have it round the wrong way, realestate.com.au had the vision to partner with NineMSN not the other way round, you’ll find out just how important they are if PBL take it back.
Once again to downplay the importance of NineMSN is a nonsense, any fool could see thay are the key to the success of any real estate portal in Australia.
The fact so many agents use realestate.com.au does not mean they like them Tom, they do not like them , their attutude to agents is arrogant and dominating and they will pay the price for that.
Once PBL take back NineMSN the swing away from realestate.com.au will be slow but sure, their revenue base will be undercut and the whole landscape will change.
You see the Internet can change quickly not like any other business. 3 million people will gladly go to Myhome.com.au instead of realestate.com.au if it’s in front of their faces everyday via NineMSN
Peter
Tim R
Thank you for your comments. If you do not agree with someone, please make it clear, but insults are not what this site are about. I want discussion. People’s views may be incorrect, they may be right, but respecting a view and then disecting it, I think is the best approach.
Please continue to post comments, and please continue to strongly disagree, but always remember that it is an opinion driven site.
Elizabeth
I hope Tim R is an agent in my patch! With his approach to business I am sure to win listings and business opportunities over him.
I am an agent, who not only has (for some time now) a Subscription to realestate.com but also has shares in the company (not much but enough for a flutter). During this time the internet (mainly realestate.com.au subscription) has cut my costs significantly, whilst the money I invested has had significant growth.
On both fronts I am winning.
So PBL and the Franchise Groups want to enter the space. Why? They want my money and my listings.
They have got to be kidding if I am going to give my competitor money and my trade! yeah – what a great idea – why don’t I just walk down to my local Century 21 competitor now and give them a nice fat cheque and all my listings. Save myself the time.
NOT.
Am I missing something here? Another portal means ANOTHER subscription, which means MORE costs, and money to my competitors!
Where as right now, I have a nice share portfolio, and a subscription which is performing well (my rei discount helps too).
If PBL are eventually successful I will have to rethink my internet approach – but given that PBL’s channel 9 went from being the clear Number 1 to a dissilusioned number 2… I may not have to worry for some time.
Tim R
I didn’t see any insults in my post, unless you mean my opinion of those behind Homehound and Just Listed and those comments were borne out of frustration watching fools try something they simply don’t understand and the quite unbelievable waste of money that goes with it.
Peter
Elizabeth, thank you for your comments, it is good to hear some positive well thought out feedback, so keep it coming!
As for Big Playewrs, yes they all want your money,. however, Ray White (not many people knew this) were a large shareholder of realestate.com.au before selling their shares for millions and millions last year, so REA were no different in that respect. I am also sure that large franshises do not pay the same fees per office that smaller independants do. It is just the nature of large corporations, they need the franchise groups, to get a large chunk of listings.
Maybe all of the private agents across Australia will one day form a group with as much power?
PBL will do no different if they become nyumber one and if they do I feel it will be years before this may be realised.
I dont mind someone dominating, but I think it goes against my beliefs with the Internet that fees should keep rising Growth should come from elsewhere and reward to the agents that have made the very site a success, because without agents and their listings no portal can be just that…a success!
Peter
Tim R :
All is good, be passionate – but have respect for other peoples opinions!
Tim R
If the Internet has cut your costs you were spending too much in print anyway, either that or you are wallowing on the bottom of the search results with a lead subscription (the one below a tin subscription I believe)
As for your shares enjoy the dividends, oh…. sorry they don’t pay dividends do they.
If I was an agent in your patch I’d take a copper subscription to put me one step ahead of you, if Iwas really pushed I’d take the kids out of private school and take a platinum subscription …..that is untill PBL takes over.
Elizabeth
Tim R – you say that justlisted and homehound.com were worthless and the money they spent should have been put towards a charity as they have no idea what they are doing?
So you do realise that the big franchises that were behind homehound are now behind this new site.
Certainly PBL should make a huge difference, but here are the kickers:
The franchise groups are STILL involved.
Their motives are STILL there (money and listings)
and if MSN is 10% of traffic for REA – then that tells you the maximum impact of MSN’s reach.
If this new site was owned by the institues I would be singing a different tune… but you just have to be crazy to go with a new site whose ownership is by your competitors, and they have a track record of non-delivery – even by your own words.
Tim R
Elizabeth – it’s not the franchises that will make it work, they just supply some content. It’s PBL that will make the whole thing work.
I don’t accept that NineMSN is not the catalyst behind realestate.com.au’s success. If it’s so unimportant why not save a LOT of money and cease using it.
As Peter has said Ray White owned a sizable chunk of REA until recently and Sam White is on their board, are you telling me the large franchise groups don’t have influence in REA ?
If they are involved financially in the PBL site it won’t make any difference to your bottom line.
The Institutes unfortunately have no idea when it comes the real estate on the internet, if they were to take a stake in the PBL venture and let PBL run the show then you could count me in.
Simon Baker
Peter
As always an enjoyable read
I would like to correct one comment made above.
Ray White is still a shareholder in realestate.com.au and has not shold out it shares.
I would also like to point out that we estimate that 20% of our shareholder base are agents like Elizabeth above – many of whom have been shareholders for many years.
Peter
Thanks Simon again, perhaps it was one of the Directors of Ray White that sold shares in REA.
Tom
Peter
Ray White owns 16.1 million shares or 12.7% of realestate.com.au and participated in the recent rights issue.
Elizabeth – good response, with all valid points. I’m glad to see that someone out there is making good investments in a real estate portal.
Nick
Guys seriously, you’re breaking my heart.
A RealEstate account is what? $350 a month last I checked? To post unlimited listings! How many properties does your RealEstate.com.au account sell for you in a month? You couldn’t even get a corflute sign printed for that price.
When I sold my last property the buyer never even looked at it – he dialed the listing up on RealEstate.com.au from interstate, and fedexed the contract – I paid my agent the better part of twenty grand for his ‘effort’ and he paid RealEstate.com.au a fraction of $350.
And you guys are here moaning about getting ‘rorted’ by REA like they’re talking your first born.
Only reason I couldn’t have done it all myself was because REA won’t let the public list – they’re setup to protect YOUR interest as a liscenced agent.
…$350 a month.
Peter Ricci
Nick, for me it is not about the money, it is about control. The Internet is very very cheap compared to other forms of advertising.
However large media companies want control of this space and most agents now pay around $600 per month per portal.
In 10 years time if large media companies own the space and control it, then this will be more like $5000.00 per month.
As an example, if there were only one domestic carrier in Australia – and you had to fly, you would;d have to pay whatever they charged. This is the point I am trying tov make – the price paid today is irrelevant.
Nick
Sure Peter, but airlines have you over a barrel because you can’t just ‘knock up’ a fleet of 747’s.
There’s all kinds of players building bigger and smarter online tools in Real Estate – has to keep them on their toes to an extent.
Besides REA need to have the most listings to retain market share – so it needs the most agencies as members – they can’t charge more than agencies can afford to pay, or they’d be creating a power vacume for someone else to spring up and churn their audience (which is basically what PBL are planning now anyway)
And even if they were charging $5k per month – realistically this still equates to about the cost of a pointless monthly press campaign for most medium sized agenies anyway… it’s still buttons if the service is responsible for 80% of your prospects (for arguments sake)
I’m not, for a moment, defending the evils of multi-national media giants… but hearing agents moaning that they’re getting ‘rorted’ over $350 (that the vender pays for anyway out of his ‘marketing budget’) just seems a bit dramatic.
Peter Ricci
Nick
To run a national real estate portal with every single real estate agent participating would cost around 500K a year.
If I were to do it (and I wont be) each agent could pay $1000 per annum and I would live a very comfortable life.
It comes down to systems, servers, stability.
You don’t need a marketing budget if you have every listing. “People will come Ray people will most definitely come”.
You just need agents to join, encourage other agents to join……and to be patient…..
Oh and yes, give them 90% equal ownership!
No Sharemarket, No Shareholders
I have a dream!