Big Portal Shake Up in South Africa as Competition Authority Comes Down Hard on Property24 and Private Property

August 2, 2023
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The South African Competition Commission has decided that the country's two leading real estate portals are impeding competition and has imposed a strict series of trading conditions on the two businesses.

In a judgement that could shake up the hegemony of the two dominant portals, the regulatory authority's Online Intermediation Platforms Market Inquiry Report found that:

  • Property24 and Private Property impede competition in South Africa's online property classifieds sector.
  • Private Property's unique partnership with large national estate agencies via its relationship with industry associations (Rebosa) has allowed it to secure the majority of listings, creating barriers for other platforms.
  • The nature of property classifieds syndication software favours the two market leaders and hinders other platforms from securing listings.
  • Property24 and Private Property's pricing strategies and multi-year contracts limit opportunities for competing platforms.
  • Extensive price discrimination based on listing volume discriminates against smaller agents and dealers, further impeding competition.

The South African real estate classifieds industry has long been dominated by two competing portals.

Property24 is the market leader in terms of traffic and is owned by the country's media giant, Naspers (which is also a major shareholder in several European portals via Prosus).

Private Property counts the likes of local media group Caxton & CTP, the financial services firm BetterHome Group, home loans company ooba and the investment company Fledge Capital among its shareholders as well as a number of national agency groups.

The competition authority's report alleges that one reason for the lack of any serious competition in the market is the situation around how portals ingest listings from CRMs in the South African market.

The two major portals are providers of syndication software used by many estate agencies and charge a monthly fee (said to be R500) to ingest listings from external software. Most smaller suppliers of listings syndication software do send listings to smaller portals but the largest independent supplier of this type of software, PropData does not.

Taking this into account the Competition Commission imposed several new conditions on the two property portals as well as on PropData:

  • Property24, Private Property, and PropData must provide interoperability at no fee for estate agents to feed listings to other platforms.
  • Property24 and Private Property must cease charging for incoming listings and end multi-year contracts with large agencies.
  • Rebosa has been instructed to cease supporting Private Property as the preferred platform for the industry.
  • An application will be made to the Competition Tribunal for national agencies to divest their shareholding in Private Property.
  • To address listing and promotion fee discrimination, property platforms must substantially reduce prices for smaller agents and dealers to a level closer to that of larger partners.
  • Property24 must introduce a Small Independent Business Package (SIBP) priced at an average per lead or listing level within 15% of the average of all other business users, reducing to 10% later.
  • Property24 must introduce a free historically disadvantaged persons (HDP) program, providing personalized training, site design and support, branded listings, five value-added services per month, and access to market intelligence reports.
  • New HDP agents must receive a 12-month free standard listing subscription.

The report was blunt and damning in its indictment of the practices of the leading portals with particularly fierce wording reserved for the pricing tactics of Property24:

"The inquiry find that the exorbitant fee increases by Property24 influence the decisions of the the business users and their willingness to pay for the services of smaller platforms. Exorbitant price increases have forced estate agents to prioritize their marketing budget by spending more on established platforms such as Property24 (while receiving the same level of service) at the expense of smaller platforms."

When contacted, Property24 boss JP Farinha said that the company noted the publication of the report and is still considering the findings. Private Property has so far not responded to our request for comment.

The ruling is considered a landmark case and is without parallel in the world when it comes to the conditions imposed on leading real estate portals. Its consequences in the South African real estate market might open the door for smaller companies such as Entegral, a company that offers listings syndication software as well as running one of the smaller portals mentioned in the report (MyProperty).

Adriaan Grové, the CEO of Entegral told Online Marketplaces:

"The ruling is historical for the online real estate space in South Africa as it will empower independent proptech companies like Entegral and others to access all property listing feeds within the next 12 months. This is not only important from a portal perspective but also to build 3rd party apps that rely on listing data. Access to listing data has held our portal and 3rd party portals we work with (via our listing syndication services) back (as also pointed out by the Competition Commission).

I think we could have seen more innovative products launched over the years in a more competitive open data environment, so it is now time to catch up."

August 2, 2023
Since March 2020 Edmund's job has been to read about, write about, collect data on, analyse and generally know about real estate marketplaces and the companies that run them. Before that he worked at the aggregator Mitula Group (which became Lifull Connect) for five years.

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