The real estate advertising market is and will continue to become more fractured. Gone are the days of real estate agents placing all of their listings in the newspaper, realestate.com.au and domain.com.au.
In 2020 both buyers & sellers are well advised to become aware of the subtle change in how the market is transacting. The catalyst for the change in the advertising market is the heavy costs of media websites on the back of skyrocketing price increases occurring. Both agents and property sellers have gone looking for cheaper ways to market property. Just as night follows day, buyers follow property listings, to whatever platform the listings are promoted on.
In the dying days of print, as the internet’s superiority and dominance emerged, many business people, web-based start-ups and large corporates saw an opportunity to break into the lucrative real estate advertising market. The holy trinity of advertising to old media companies was cars, real estate and employment. The advent of the internet put all of these sectors up for grabs.
In terms of cracking the real estate market, James Packer’s “My Home” failed, Telstra’s “Just Listed” failed, the respective state-based Real Estate Institutes failed with their versions of real estate websites. Google even had a half-hearted attempt at the Australian real estate market.
Essentially a duopoly
In the last 10 years, realestate.com.au and domain.com.au have enjoyed what is essentially a duopoly over the Australian real estate market. There are still a few competitors attempting to break into the space, as a bonafide third competitor in the market, but the reality is it just isn’t happening.
The third wheel in this equation is coming from agents who are increasingly selling their listings off-market using their client database and social media sites. Social media sites provide phenomenal reach for agents to share their listings but at a fraction of the cost of media websites.
Many in the market are missing this shift in the advertising market. You may have seen commentary highlighting the lack of listings throughout 2019, however this can be a false representation as the on-market listing count is usually conducted by adding up and cross-referencing properties on realestate.com. au and domain.com.au – meaning if a property sells prior to reaching the portal, it’s simply not counted.
Record low listings
Given the amount of transactions agents have conducted exclusively using their websites and databases in the past 12 months, the commentary surrounding record low listings was likely incorrect. Genuine buyers quickly realised agents were beginning to control the listing flow through their own websites.
Late last year, both realestate.com.au and domain.com. au released their earnings results to the markets. For the first time since inception, both sites handed in poor results for the same period. The astronomical revenue, profit and share price growth, both sites had enjoyed for the past two decades, were gone. In explaining away their disappointing results, both sites blamed the property downturns in Sydney and Melbourne.
The leaders of these organisations may have also missed the shift occurring in the market as agents across the land pursue cheaper platforms, on behalf of their vendors. Some sites cost as much as $1000 for one property ad. Either the agent or the home seller needs to pay upfront.
Vendor Paid Advertising
In Australia, agents tend to follow and prefer the VPA model – Vendor Paid Advertising. The minimum cost of running a full on marketing campaign in Goulburn for a vendor is now above $1000, payable upfront regardless of the result.
In Goulburn Auction clearance rates sat at below 30% and sale rates post auction were just under 55%, with many sellers forking out for exorbitant “premium listings”, large print ads and huge signboards, for no result.
In 2020, we expect to see market confidence grow, meaning vendors and agents maybe more inclined to take another look at the major website portals and question do they really work?
Under the Radar
As this shift has occured more and more listings are starting their campaign life cycle with an "off market" or "under the radar" strategy. Meaning that they are exclusively offered to qualified buyers within a buyer database first, via email, sms and phone calls prior to being released on mainstream portals. By offering this service it enables sellers to be able to gain real market feedback from potential buyers prior to launching into a full campaign and the opportunity to secure a result without the fuss of mulitple strenuous open homes. For buyers it means they can privately view the home at a time suitable to them and secure the home before it reaches the open market.
At Goulburn First National this strategy is something that we have seen great success with, having received great feedback from both buyers and sellers involved in the process. Our "Buyers Club" is a complimentry service that enables us to match buyers to their perfect home.
For sellers we offer a "No Sale, No Charge" Guarentee, meaning if your home doesn't sell, you won't be out of pocket for thousands of dollars. If you'd like to find out more about this guarentee please give us a call on 02 4822 8711
Article inspired by Peter O'Malley
Author of "Inside Real Estate"
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