Pardon the very obvious pun, but Australia’s housing sector has become increasingly hot property on the international investment stage. And it’s not just overseas purchasers looking to snap up our bricks and mortar who want in on the action.
Property portal search engines are proving to be a lucrative little money-spinner in their own right, with the REA Group currently claiming the lion’s share when it comes to this vast digital market, most notably controlling realestate.com.au.
The company posted a net profit increase of 37% for 2014, up to $149.9 million, and according to IBISWorld dominates with an estimated 70% stronghold on this niche sector.
Domain and realestate.com.au lead the Australian online property listing space at present, with both charging real estate agents a subscription fee plus advertising costs to promote dwellings for sale and rent on their portals, while consumers pay a one-off listing fee.
Not surprisingly, the duopoly has fought hard to protect its territory, admonishing Google for cheekily trying to beat them at their own game two years ago when it started putting up details of listed properties from both sites on Google maps.
While they seemingly nipped this in the bud (Google no longer do it), the groundswell of interest around online property portals that give consumers the means to buy, sell and rent accommodation without paying commissions to a ‘middleman’, continues to build.
Now, hundreds of websites allowing consumers to upload their listings for free are flooding the information superhighway, with one particular start up in the space gaining some attention.
Hubitat is a Singapore based real estate platform for Australian property seekers, run by a small company consisting of three tech nerds who describe what they’re building as, “Google, but for real estate,” according to community relations and support liaison Lee Wei.
Answering the call of thousands of real estate agencies currently beholden to pay fees for the services of Domain and realestate.com.au, Hubitat will be free of charge to all end users, including agents and DIY home sellers.
“Traditionally, agents will post their listings to portals such as realestate.com.au or Domain at a cost. We bypass this step, saving the agencies time and money.”
The entity is the brainchild of founder Neil Anderson who, whilst living in Australia for six years, decided that the online real estate advertising world left much to be desired.
“Results can be biased due to the fact that agencies pay for the listings. Hence, it is unfair to the home seeker as they are unable to get a clear sense on the properties within a certain search area,” explains Wei.
While Hubitut’s intentions are noble, looking to provide a friendlier user experience in terms of faster, more responsive search capability and data provision, it’s difficult to ignore the David and Goliath battle the company faces in its competition, particularly the Fairfax media juggernaut.
What it means for property traders
It’s interesting to watch this high tech showdown play out and note the consequences for what has long been a very traditionally administered real state sector.
Historically speaking, real estate agents are engaged to trade properties between buyers and sellers, having convinced the general public that without them acting as the designated go-between, the entire system of property transaction would disintegrate.
But is the role of the real estate agent slowly becoming obsolete? Endangered by the modern world of mobile gadgetry, into which we’re happily wired 24/7?
Nowadays you can appoint a virtual agent via websites such as PropertyNow which, depending on how many bells and whistles you’re prepared to pay for will offer to do the following on your behalf:
- Arrange professional photos,
- Arrange a for-sale board and
- Assist vendors with phone advice throughout the negotiation process.
Owner and director of PropertyNow, Andrew Blachut said when speaking with the Fin Review, “The veil of secrecy has been lifted; it’s not that hard to sell a house, it’s ridiculously easy. Agents try and wrap it up in mystery as much as possible.”
Buyer’s advocates arguably presented the first challenge to the comfortable market domination enjoyed by real estate agents for decades, making the transaction of housing a much more transparent process by creating more informed buyers.
Now, many concede that the Internet is increasingly becoming the medium investors are turning to for access to data and market research that was once monopolised as an industry secret to keep agents in the commission fuelled driver’s seat.
Never before have buyers and sellers been so empowered with market knowledge, including data on comparable sales for virtually any postcode in Australia. And while some of it still comes at a cost, it can be an invaluable investment if it means walking into a property transaction better informed.
All sorts of information, including comprehensive suburb profiles to assist in understanding market demographics, can be found online.
The latest threat to real estate agents is a property portal for DIY landlords, which seeks to siphon away some of the sector’s lucrative management fee revenue.
Gareth Robinson is the mind behind a new online site called Leasate, which cuts out the agents and enables landlords to manage their own tenancies online, from the lease application, to rental payments, to maintenance issues. And what’s more, it’s all for a significantly lower management fee.
Although the site is still in its infantile stages, with just 120 landlords and tenants actively using it (most friends or relatives Robinson admits), there are ambitious plans to capture 10 to 20% of the lucrative property management market.
Of course it’s important to carefully weigh up the consequences of any DIY management or transacting of properties – such as time cost versus money saving – before you consider going it alone.
Technology is wonderful and has its place in our industry. But I’m not sure it’s capable of entirely replacing people just yet.