While 2009 was generally a quiet year in the New Zealand property portal market, there was one notable exception – the exit of the REA Group's allrealestate.co.nz and the subsequent marketing arrangement between the REA Group and its former competitor, realestate.co.nz. There now two main players in the residential property portal market and 2009 should see some interesting developments with this new market structure.
2008 will probably go down as the yaer in which realestate.co.nz became the leader in the New Zealand market. It started the year tied in second place with the REA Group's allrealestate.co.nz however it was gifted a near monopoly position by the REA Group when they decided to exit the market late in the year. Following this departure, realestate.co.nz entered a marketing agreement with the REA Group that sees traffic be directed from the realestate.com.au site and the allrealestate.co.nz URL to realestate.co.nz. Stranglely, there is no link on the realestate.co.nz site back to the REA Group's network.
There are now two main players in the New Zealand market - the real estate dedicated realestate.co.nz and the general purpose site, Trade Me. Here are our top 6 predictions for the New Zealand property portal market in 2009.
realestate.co.nz will overtake the real estate section of Trade Me
For the last few years, the real estate section of Trade Me has received the highest number of real estate visits. However with the closure of allrealestate.co.nz and the redirection of traffic to realestate.co.nz, we would expect realestate.co.nz to significantly close the UB gap with Trade Me's real estate section. Some dedicated online marketing (especially SEM, SEO and PR) will see the gap further close and realestate.co.nz overtake Trade Me's real estate section.
realestate.co.nz will increase the range of agent and listing premium products
realestate.co.nz will develop a range of products that agents can purchase to upgrade their listings or brand themselves on the site. While these dont exist at the moment, pressure by the leading agents will see realestate.co.nz launch these new products and services as a way in which they can extract more value from their customer base. allrealestate.co.nz did offer these products so the market is already aware of them and predisposed to purchasing them.
Agents will redirect their spend from Trade Me (and the papers) to realestate.co.nz
At the moment agents are spending on both Trade Me and realestate.co.nz. However due to the continuing tough economic conditions, the improving traffic to the realestate.co.nz site (and therefore more leads) and the simple all you can eat subscription packages offered by realestate.co.nz, agents will probably move their spend from Trade Me (and the newspapers) to the industry backed realestate.co.nz. The likelihood of this happening will increase if realestate.co.nz launches a range of agent and listing premium products.
realestate.co.nz will increase the range of information offered on its site
realestate.co.nz will add sales data and neighbourhood information to its site in a bid to increase its attractiveness to consumers in the market and to further differentiate itself from the real estate section of Trade Me. By doing so, it will create a more loyal consumer base and therefore probably more traffic than the real estate section of Trade Me.
realestate.co.nz will increase prices - but only slightly
Like all businesses, realestate.co.nz has to provide a return to its shareholders. The NZ market is going through a tough economic period and agents are either going out of business or are closely looking at their marketing spend. This would be having some impact on the revenues of realestate.co.nz. Having seen off allrealestate.co.nz and improved its offering to consumers, realestate.co.nz is now in a position to increase the price of the subscriptions it sells to agents to help maintain and increase revenues. At the moment they charge NZ$200 per month to advertise and we would expect this to modestly increase over the year.
REA Group will close realcommercial.co.nz
When the REA Group decided to close its allrealestate.co.nz site, it didnt completely exit the New Zealand market. It decided to maintain its realcommercial.co.nz site. However, the site is small and really an offshoot of the Australian realcommercial.com.au. Therefore during the course of the year it is likely that they will close realcommercial.co.nz as well.