Google Maps' launch of real estate listings could pose a threat to Australia's real estate portals according to Frost & Sullivan's latest report, Australia Online Classifieds Advertising Market 2010.
The report describes Google Maps' addition of real estate listings as "the most significant competitive development in real estate online classifieds advertising".
"[Google Maps real estate] could challenge the established online real estate publishers if a critical mass of estate agents shift online classifieds advertising spend to the alternative portals that list on Google Maps, or even upload listings directly onto Google," the company says.
Frost & Sullivan's report goes on to say that a second issue in online real estate classifieds is the potential emergence of "significant" For Sale By Owner websites. "These sites already exist, however their impact on the market to date is limited with over 95 per cent of home sellers using an agent to market their property," the company says.
The report notes that the Australian online classifieds advertising market grew by only 2.5 per cent in 2009, finishing the calendar year valued at AUD$506 million. In the 2008 financial year, the market grew by 28 percent.
While growth was slow in 2009, online now accounts for an estimated 25 per cent of total classifieds advertising expenditure, up from 23 per cent in 2008.
But Frost & Sullivan predicts the rise of social media, along with "maturity" in the market, will cause growth in online classifieds advertising to taper off over the next three years, reaching $762 million by 2013.
Phil Harpur, ANZ Senior Research Manager at Frost & Sullivan, had this to say about the growth of online classifieds in Australia:
“Over the past few years, the fundamental driver behind the growth of the online classifieds advertising market has been the migration of expenditure from print classifieds to online classifieds, as advertisers have gradually switched their expenditure to the online channel, or started using the online channel alongside the print channel.
However, as the Australian online classifieds market matures, it is, like the print classifieds market, becoming more closely correlated with economic conditions. This is not to say that the migration from print to online has ceased, but it is no longer the overwhelming market force that it was in the early stages of growth of the online market, where factors such as the state of the economy had much less relative impact on overall online classifieds growth.
As select sectors in the online classifieds market, such as the recruitment sector, have established themselves as more popular than print, both companies and consumers are questioning whether they also need to advertise on the print channel at all.”