Predictions 2009 - New Zealand

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.

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propertyfinder.com

propertyfinder.com is the second of the UK’s “Big 4″ property portals. It was begun in 1995 and has been owned by the REA Group and News Limited since 2005.

It receives over 1.9 million unique visitors every month and lists over 350,000 properties from just under 4,000 estate agency offices.

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REA Group Changes HubOnline Product

In a guest post from REA Group’s Dave Platter, Group Manager of Public and Investor Relations, he reveals that realestate.com.au has made some changes today around its HubOnline product.

HubOnline Global was purchased by the REA Group in April 2006 and provides software products that enable real estate agents to easily manage every stage of their business, including web based sales, lead management, marketing solutions and trust accounting real estate agents. More than 480 real estate agent offices in Australia and New Zealand rely on HubOnline.



realestate.com.au has made some changes today around its HubOnline product that deserve an airing here.

In the first change, the company’s Agent Solutions Group (which provides the HubOnline Software) is making some changes that will be of interest to anyone using HubOnline. Here’s the email they sent to HubOnline 1 customers today:

Over the past three months, REA have had a number of projects to investigate and understand what HubOnline customers (as well as customers of competing real estate Customer Relationship Management packages) need, use and value in their solutions.

As a result, we are announcing a roadmap for making some important and meaningful improvements to the version of HubOnline that you are currently using.

We intend to release improvements to HubOnline over the coming half-year. These will include:
· Simplifying the application to improve the user experience and reduce training requirement
· Improved performance speed of the CRM application
· Improved speed for vendors and buyers viewing your website
· Improved system stability and availability
· Improved disaster recovery and protection of your data

Some of you know that we have had an R&D project underway that would have eventually resulted in a newer version of HubOnline on a different platform. Based on the user research we have done, we have determined that this is simply not the best way forward for the majority of our customers who want a simpler CRM solution, rather than a more complex one with advanced features. The research tells us that most agents want easy-to-use and reliable software that provides an agent website, export to multiple portals and services, good (but basic) contact management and reporting. Therefore, our intention is to focus on making these improvements to the current product.

We believe that this will get you more improvement in a shorter time-frame, and will ultimately meet your needs better, than the more complex solution we were building. Again, this is not just our opinion, but is based on the feedback we have received from our customers and the customers of other Australian real estate CRM applications.

What do you need to do? Nothing. Because HubOnline is offered as a “Software As a Service” over the internet, you will receive the benefits of these improvements as they become available. We will communicate improvements beforehand, and as is our normal practice, will design and release them to minimize disruption.

Thank you for being our customer, and we hope that you will see these improvements as a net benefit to your business.

The HubOnline team made another announcement, too. Here are some excerpts from the letter mailed yesterday to customers of the Trust Accounting product lines–including Clarke Computers SalesTrust and RentTrust.

REA has agreed to sell its Trust Accounting product line to Rockend Technology Pty Ltd (Rockend). This means that from December 12th, 2008, your contract for the Clark Computers products will be assigned to Rockend. Rockend will also provide future services and customer support. You can reach Rockend on 1 300 657 700.

We have selected Rockend to take over your customer relationship in respect of trust accounting services because of its experience in trust accounting. Rockend has been recognized by the Customer Service Institute of Australia (CSIA) with both state and national awards for its excellence in supporting customers.

We believe that this change is in the best interest of our Trust Accounting customers as Rockend has proven its commitment to the excellent customer service and support.

Rockend have informed us that it is their intention to continue supporting these products for the foreseeable future, and over time to help customers make an easy transition to the core Rockend products. You do not need to take any action for this change to occur and there should not be any disruption to your support services, although the team will be physically moving to the Rockend office on December 12, so responses may be delayed on that day.

I would like to thank you for being a trust accounting customer of the REA Group. We look forward to continuing to provide you with our range of other services.

Yours sincerely,

By Dave Platter
Group Manager of Public and Investor Relations at REA Group

Using a Nude Dude For Viral Marketing

REA Group owned realholidays.com.au recently launched a viral marketing campaign to advertise the holiday rentals website ahead of the Australian summer. realholidays.com.au was established in 2007, and contains over 22,000 holiday rental listings.

The viral is a URL, whereisnudedude.com.au which uses a nude character in an interactive game that plays homage to the Where’s Wally picture books.

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Did REA Group Maximize Value on NZ Exit?

Recently the REA Group announced that it would be exiting the New Zealand market and that it had entered into an advertising deal with the remaining player, realestate.co.nz. However, in exiting the market, did the REA Group capture as much value as they could?

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REA Group Directs Traffic to realestate.co.nz

Having decided to close down most of its New Zealand operations, the REA Group has now entered a marketing arrangement to drive traffic to former competitor, realestate.co.nz.

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Why rightmove should acquire propertyfinder

Times are tough in the UK market at the moment and it seems to me that the best value creating play would be a merger of rightmove and propertyfinder and therefore increase the gap between rightmove and the rest of the market.

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REA Group Projects 50% Revenue Growth

While many in the property portal world are worried about a possible downturn in advertising revenue, Greg Ellis, CEO of REA Group, remains optimistic.

Ellis made the positive comments in an interview with The Australian newspaper published today.

He said that the online real estate classified market shows no sign of succumbing to the advertising slowdown. He also said that the REA Group expects to maintain revenue growth of about 50 per cent this financial year.

Ellis was quoted as saying:

“People are spending a very small proportion of their annual budgets online… The saturation point of that is years away.”

REA count realestate.com.au in Australia and propertyfinder.com in the UK among their stable of international property portals.

Mr Ellis was also reported as saying that an Australian mobile site would go into beta testing before the end of this financial year.

A lot of attention has been on the REA Group of late, with rapid international expansion, the appointment of Greg Ellis as CEO, News Limited increasing their stake in the company, and record breaking 45 percent increase in revenues last financial year.

Comparison of Listed Stocks (Oct 08)

In this month’s comparison we can see that the down turn in the global market is continuing to have an impact on the listed property portal sites with most seeing their share prices down month on month.  The companies with a the biggest decline were move.com, loopnet.com, rightmove.co.uk and entreparticuliers.fr.  Some of these sites hit 12 month lows.

One site to buck the trend was seloger.fr in France who recorded a 14% share price increase following the announcement of its financial performance for the first 9 months of the year.

Finally, it should be noted that while the share prices decrease for these companies, the underlying fundamentals continue to improve as they are mostly market leaders and they continue to have revenue increases while maintain strong margins.

The remainder of the article looks at the overall month on month changes in share price, market cap and the key ratios.

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Consolidation in the UK Market?

The UK property portal market is ripe for consolidtion.  The question is who is most likely to merge and what impact could it have?

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