Property Portal Watch founder and former REA Group CEO Simon Baker has named the top 8 property portals to watch at the company’s recent conference in New York
In his January presentation to over 100 C-level industry attendees, Baker provided some key insights into changes in the online property and classifieds market.
Where once the online property space was just a collection of portals operating each in their own countries, today there is a real industry comprising everything from vertical sites to multi-sector, new homes, established homes, rental sites, bankruptcy listings, niche sites and retirement living.
“There are also the horizontal sites,” Baker told over 100 conference attendees.
“General classified sites are aggressively going into the market and suppliers that can offer support to these sites such as the likes of Mitlua, Floorplanner and Trovit have emerged.
“(The property portal industry) is big enough for suppliers to profit by offering these thousands of players their services. The industry is worth billions. Together it probably amounts to US $40-50 billion and by 2018 it is likely to be worth $100 billion.”
Baker, who is also the Chair of Mitula Group says competition for market share and listings is fierce globally.
“Mitula receives 15,000 listings daily across cars, jobs and homes, with approximately 10,000 or more which haven’t been found. I estimate there are 10,000 online businesses globally with real estate listings, a very large number.
In Dubai which has a population of 1.8 million people, there are 20 property portals.
“There are high levels of competition in very small markets,” he confirms.
BIG MONEY & CONSOLIDATION
Property Portals are raising billions of dollars in funding.
“For example, Propertyfinder (Dubai), Zameen/Bayut (Pakistan) and Housing.com (India) all raised $20 million.
“When it listed last year, Mitula raised $27 million,” Baker says.
As a result, consolidation is a major feature of the market landscape with major players like Axel Springer, News Corp and Schibsted in Sweeden snapping up portals and classifieds to create value.
“There are niche players in Latin America focusing on dominating the local market by buying up all the local competition with a view to list in the future.”
“And there are general classifieds buying verticals. Partnering is of course occurring as well. Instead of going alone to win markets in Brazil or Thailand or Indonesia ,” players are working together to aggregate markets.
Overall Baker says there is a movement away from the ‘pay to advertise’ model to a ‘pay for lead’ structure.
“The use of commissions, once the domain of agents, is now also a growing feature in emerging online markets,” he adds.
“While established US agents may be worrying about 1-2 per cent (commissions), portals are going overseas after 6 per cent in the new homes market, for example.”
8 (OR 9) TOP PORTALS TO WATCH
1. RIGHTMOVE (UK)
Simon Baker says Rightmove is a very highly focused business.
“I really like what Rightmove does, they’ve done a fantastic job building a portal and making a lot of money,” he says.
“If you’re in this market, and you know what you’re doing, but you don’t want to rely on pushing out new concepts all the time, take a look at what they do.
“Rightmove runs at a 75-78 EBITA margin with revenues growing at 15-20 per cent per annum.
2. REALESTATE.COM (Australia)
According to Baker Realestate.com.au does a very good job at extracting value from advertisers.
“Realestate.com knows how to create pressure for the agents, they’ve got to buy the next big thing, be on top of ladder, on top of the search,” he says.
“Whether you really do have to or not is a separate matter. But there’s a perception among agents that you do, so it creates value for them.
“Realestate.com’s average revenue per advertiser (ARPA) has skyrocketed to $3,000 or $4,000 and the company is also now moving from the pay for advertising structure to pay per listing.”
3. TRULIA (US)
Baker says Trulia offers a good example of strong consumer interaction.
“Trulia thinks long and hard about how to engage the consumer in a meaningful way because in the US that’s the only way you can differentiate yourself,” he asserts.
“They’re very good at finding out what’s important to the consumer and converting the information into a powerful interface and a good user experience, using heat maps for example.
“Historically real estate site would just expect you to select the suburb,” he clarifies.
“Now we think very differently and it’s all about priorities; whether a property is near transport, near the right schools and at a reasonable distance from our workplace.
“Trulia is one site putting all that at the finger tips.”
4. VIVAREAL (Brazil)
VivaReal is one of the two leading real estate portals in the Brazilian market. Simon Baker says VivaReal’s strength lies in its execution.
“The company raised a lot of money when it was launched then systematically rolled out across Brazil which is very large, a continent of 200 million people with cities of multiple millions.
“VivaReal rolled out model after model, office after office, so from being a relatively late entrant in the market it did a very good job of being a serious competitor."
Baker says this success was the result of a very clear mission, a strong team and an organized, measured approach.
“At VivaReal they measure everything,” Baker quips.
He also says VivaReal leadership team was built by finding Brazilians undertaking MBAs in the US who were planning to return home.
5. ZAMEEN (Pakistan)
According to Baker, Zameen is a very interesting business which utilizes hundreds of employees doing sales.
It’s run by English-educated entrepreneur brothers Zeeshan Ali Khan and Imran Ali Khan, while a third brother runs Bayut.
Baker says the Ali Khans run their business "like a factory", using a strong data-driven approach which allowed them to dominate the Pakistani market.
6. MITULA GROUP (us)
Mitula group achieves traffic of 65 million visits per month about 60 per cent of which is SEO driven.
“If you need good structured guidance for SEO, have a look at what Mitula does,” Baker advises.
7. IMMOBILIARE (Italy)
Prior to the launch of Immobiliare in Italy, the REA Group’s Casa subsidiary was the leading real estate portal in Italy.
“I actually bought Casa from REA a long time ago,” Baker reveals.
“It’s a fascinating story, because Casa was a leader in the Italian market but they fell asleep at the wheel and
Immobiliare basically ate their lunch.
“Essentially Immobiliare systematically built paying agent listings from a position of 25 per cent less than Casa in 2008 to 25 per cent more paying agents than Casa in 2013.
“If you’re an attacker in the market you can’t go past some lessons from Immobiliare for taking on the competition aggressively and winning.”
8 EASYPROPERTY & PURPLE BRICKS
If you want to understand what the future holds for the real estate portal industry simon Baker says easy property and Purple Bricks in the UK are going to drive it.
“Purple Bricks is a listed, 200 million pound company and it’s well funded,” he says. “easyProperty has raised a lot of money recently too.
“They’re both trying to change the fundamentals of the way real estate works in the UK; in particular with the use of commission based sales, not just in the UK but in the US or France and the rest of Europe where there’s lots of opportunity.
“Sites like these are going to change the way we buy property,” he predicts.
“The guys currently doing it won’t be doing it in the future. It’s like saying taxi companies will create uber or the hotel industry will create Air B&B. That’s never going to happen.
“It takes someone out side the industry to create change and rapidly growing businesses like these are showing the initiative on that.”