REA Group, owner of realestate.com.au, will be introducing a money-saving flexible subscription fee, but not all agents are pleased with the option.
According to John Cunningham, principal at award-winning agency Cunninghams Property on the northern beaches in Sydney, the new flexi subscription offers agencies the ability to advertise all of their property listings on realestate.com.au within the one subscription cost. However, an additional fee is charged per listing.
“The writing is on the wall - it is not going to get better it is only going to get worse,” Mr Cunningham told the attendees at Real Estate Business’ recent Principal Roundtable.
“The key to me is that they are putting us against each other - it is the competitive nature of what we do. There is constantly more and more offered to us, with banners, features, top spot and more, to compete with each other. We are now virtually forced into this battle - and it is a battle, make no mistake about it.”
The subscription fee change was a topic that dominated the conversation at the Principal Roundtable held at Sterling Publishing’s North Sydney office late last week, with many of the principals claiming they were substantially worse off with the new flexi subscription.
“I wonder if [realestate.com.au] anticipated the fallout from this?” Aris Dendrinos, from Richardson & Wrench Marrickville, asked. “They are going out to salespeople and telling them, 'We are going to offer you a much lower subscriber rate', but they are going to charge us per property.
“They want us to collect their money from the vendor for them. As a major player in the industry, it is not the way to go about it.”
Other attendees at the event included Daniel Formosa, principal of Starr Partners Blacktown, Alison Beveridge, principal of Breakfast Point Realty, Ewan Morton of Morton&Morton, Craig Marshall, principal of CENTURY 21 Cordeau Marshall Group, and Domenic Bucciarelli, director of LJ Hooker Ashfield.
“I think what most frustrates me is that they come out to see us, they ask us for our opinion but they don’t listen, and that is the real problem,” Mr Formosa, principal of Starr Partners Blacktown said.
Yet according to REA Group's general manager of sales and operations, Arthur Charlaftis, the change in fee structure has come about after industry consultation.
“Our customers told us they wanted to reduce fixed costs and to have more flexibility with their subscriptions,” Mr Charlaftis told Real Estate Business.
“As a result, we’ve introduced the cheaper and more flexible subscription and now we’ve started educating vendors and landlords about the value of digital to assist our customers in obtaining advertising costs at the beginning of their property marketing campaigns.”
According to REA Group, the flexi subscription will affect agents who use both the 'Buy' and 'Rent' channels on realestate.com.au.
“It sounded great at first, but once I did the figures with my rep sitting with me, I was at a huge loss per month,” Michael Furlong, principal at award-winning property management agency Map Real Estate in Melbourne told Real Estate Business earlier this month.
Mr Furlong said his subscription fee fell from $1,350 to $600 under the new model; however, each individual rental listing would now cost an additional $65 to upload.
“I have a rent roll of 500. At the moment I have 38 listings to upload, plus the $600 monthly fee, so that brings my monthly cost to $3,070,” he said. “That is a huge increase for me, and when I asked how I was meant to find the increase in money, my REA rep simply said just pass it on to your landlords.
“I work for the landlord. I can’t expect them to accept those increases when they are really not getting any more for their money,” he continued. “I’d like to see an REA representative have that conversation with our landlords.”
Domenic Bucciarelli, director of LJ Hooker Ashfield, believed the industry should band together to offer an alternative to landlords and vendors.
“I truly believe that we have to get back to industry-based web portals, it is vital. I think we all saw some merit, but it was a very slow take-up rate through fear or competition, but we really need to wake up and see that these giants will just continue to grow bigger and bigger and we will just get gobbled up if we don’t take action. It needs to change, and it should change now before it gets too big and out of our control,” he told the roundtable.
Mr Cunningham agreed. “It could happen fairly quickly if the industry gets behind it," he said. "All it takes is for everyone to climb on board. If you get content on [realestateVIEW.com] then it will begin to search high. It starts with us; it doesn’t start with the consumer.”
To read Mr Charlaftis’ full comments regarding REA Group's subscription costs, click here.