Boutique agencies will continue to trend favourably in 2013, as vendors and buyers head towards a more ‘local’ approach, a senior executive at a 47-office network has claimed.
General manager of NSW-based Laing+Simmons, Leanne Pilkington, said prevailing market conditions should suit boutique agencies, which focus primarily on service at the local level at the expense of larger networks who have reached what she claimed was a “critical mass”.
“The larger national agency brands have focused in recent times on expansion for expansion’s sake and are now finding that they’re reaching a saturation point,” she claimed.
“The local knowledge often sacrificed with an approach like this should see the boutique agency brands increase their market share as transactions will increasingly demand a greater knowledge of market dynamics at the suburb and even individual street level."
Laing+Simmons was purchased by ACT-based Independent Property Group (IPG) earlier this year.
At least a few large franchise groups, however, aren't looking to expand at all costs. Recently, Tony Brasier, managing director and chairman at PRDnationwide, said his primary focus was supporting his existing 120-office network.
“There’s huge potential to grow the offices that we’ve already got, and then it will be about where we can get growth … to compliment the good offices we’ve got," he told Real Estate Business earlier this month. "My game plan is to put together the platform and the systems, and if this is done well enough, we’ll get people wanting to join us. I would like to think by the time we finish this process, we’ll have people knocking on the door."
Richardson & Wrench group franchise director Peter Flynn echoed these sentiments, pointing out in the article that accompanied the Real Estate Business Top 20 Groups ranking that his network of around 90 offices would only seek growth "where we can maximise our franchisees' opportunities for success".
"We don't want to be everywhere, in every state," he said.
Ivan Bresic, of Bresic Whitney in Sydney, agreed with Ms Pilkington that consumers have become disenfranchised with major groups who have been ‘trying to keep up, rather than setting the pace’.
“The 80s and 90s were run by the franchise groups,” he told Real Estate Business. “And the biggest change in the industry since then has been the internet.
“Most boutique agencies are only around a decade old and have grown using websites and the internet. But the franchise groups are set in their ways because they’re restricted by a head office.
“What works for us won’t work in the Gold Coast or Bowral. Being a boutique office allows the agency to be diverse and more susceptible to change and adapt to their market.
“Consumers have much higher expectations now than they did back when the major groups were dominant players, which gives smaller offices with local knowledge an edge against the big names.”