One major real estate franchise group will collapse within two years, and the second largest real estate group in the US looks set to enter the Australian market – that’s the sombre outlook for the local industry according to Professionals Real Estate Group chief executive Glyn Morgan.
“With the current weakness in the property market I believe we're going to experience a period of major rationalisation,” said Mr Morgan.
“I really think one of the core franchise groups will not be here in two years,’’ said Mr Morgan.
“Most of the franchise groups offer exactly the same offering and the only difference between them is branding.”
Mr Morgan said established franchises would come under pressure from new firms or international firms moving into the Australian market. This included Keller Williams (KW), the second largest real estate group in the US, which boasts around 80,000 agents and 690 offices.
KW confirmed to Real Estate Business that it was contemplating a move into the Australian market.
The company, which recently opened an office in Singapore, has formed Keller Williams Worldwide with Chris Heller as president.
In a March 2011 statement, the company announced plans to grow the division by an additional 75,000 associates in 10 years.
“Our goals are to expand the Keller Williams Realty model – with the focus on training and our sound business models," said Chris Heller, president of KW Worldwide.
“And, when looking for the right country and business partners in planning for expansion, we will not sacrifice the perfect fit with our mission, vision and the KW culture, those are absolutely necessary."
Mr Morgan said Keller Williams had recently established a "beachhead" in Adelaide, "and we can expect that brand will be rolled out throughout the nation in the next few years".
Real Estate Business was unable to contact the Adelaide-based Keller Wiliams Realty office, with the phone number listed not connected.
“We can expect more and more real estate brands to establish themselves in the Australian market and the level of competition between franchisors is set to intensify,” said Mr Morgan.
Mr Morgan said the Professionals Real Estate Group, which has more than 300 offices throughout Australia, New Zealand, United States and a number of Asia-Pacific countries, is looking to further expand its presence throughout Australia.