In June last year, OnTheHouse Ltd listed on the Australian stock exchange. The listing brought together the onthehouse.com.au website, software players PortPlus and Console, and the data company Residex. Since listing at $1.00, the shares have traded as low as $0.33 and have now recovered to $0.63.
While the software and data companies were well established, the onthehouse.com.au website was relatively new to the Australian market. According to the prospectus, the onthehouse.com.au site had the objective of providing free access to an extensive database of real estate content and property values on most properties in Australia, including traditional real estate online classified listings.
Now the interesting part of this, and an area that is pushed heavily by OnTheHouse, is the property valuations on the website. Zillow and Zoopla have built good businesses around this type of content in the US and UK, so it is interesting to see if OnTheHouse can do the same in Australia.
To test the quality of the information provided, I thought I would try this on my Melbourne home.
The results were surprising – to say the least. It valued my home at 60% of what I paid for it a couple of years ago and at 55% of what the bank has recently valued it at. The valuation scale on the site claims there is moderate confidence with the valuation. Either I have massively over paid for the property and the bank has no idea, or the onthehouse.com.au database is not as accurate as it could be when it comes to my property.
The other thing that shocked me was the picture they had of my home. It was totally incorrect and in fact was a picture of a building 200 meters away on a different street.
I therefore thought I would look at my neighbour’s house. Now the price of that should be the same as mine as mine is one of three basically identical homes. Firstly, there were 2 entries for my neighbour’s house – one had a rough guess next to it and the other had a moderate guess next to it. While neither of the guesses valued the home correctly, the moderate guess was around 40% of the value of the house and the rough guess was around 75% of the value of the home. Suffice to say most confusing and really of not much use.
The other thing that was interesting was the pictures for my neighbour’s house was for when it was being built – over 5 years ago. At the house was right and not a couple of hundred meters away.
Finally, when i looked at the property profile report for my home and the comparable properties for sale, i was rather surprised to see a property in the list that is in an adjacent suburb and advertised for <10% of the value of my home. I am not sure how this is remotely comparable.
The point being is that if you are going to build a business around property valuations, much as Zillow and Zoopla has done, you have to get it right. Not 100% right but at least in the right ballpark. You only have one chance to impress a user and if the information provided is questionable, the chances of them returning are low.
OnTheHouse has been quick to promote the rapid growth of their business and according to Google Ad Planner, they are now in the top 6 most visited Australian property portals for unique users and visits. However, if we look at repeat visitation (frequency) as well as engagement with the site (pages per visit), their ranking drops outside the top 10. This may be an indicator that the consumer experience is not meeting expectations and therefore consumers are not returning.
At the end of the day, no matter what your value proposition is to the customer, you have to deliver on it. If you say you are the most comprehensive site in your market – have the most listings. If you say you have property valuations – make sure they are accurate (or as accurate as possible). Remember, you only have one chance to make a first impression!