Mr McGrath told an REB Leadership Series event for network bosses that he has long believed it is too late for new competitors to challenge REA Group and Domain Group.
“The electronic classified game is over. REA has won and Domain is a strong second competitor,” he said.
“REA is making hundreds of millions of dollars, and they’re reinvesting it in technology, people, branding and marketing. They’ve got immense traffic and I think it’s naïve for a new player to think they can come in.
“We saw the Packer family try to take on REA years ago – it didn’t work. Anyone who thinks they can beat the two big players with the game in its current state and format is going to waste their money.”
Mr McGrath, who is a non-executive director of REA Group, said the evidence from around the world suggests that industry-owned portals such as Squiiz are unable to compete with specialist businesses.
“REA and Domain have nothing else to focus on other than driving traffic and getting better technology. I don’t think Squiiz was ever going to work,” he said.
Squiiz has released an app and is confident it can capture 100 per cent of national listings by the end of 2016.
Chief executive Nick Christian also said the portal would become competitive with realestate.com.au and domain.com.au over the long term.
Century 21 chairman Charles Tarbey told the REB Leadership Series event that Mr McGrath had been too quick to dismiss Squiiz, which he said was fighting for recognition in the same way that the two big portals did in their early days.
“We’ve got to remember that we’re the ones who control the data and we’re the ones who feed that data to REA and Domain,” he said.
“It’s a very hard battle, but Squiiz was never designed to compete with REA or Domain. It was designed as a platform for us to consolidate our data as an industry.”
One Agency chief executive Paul Davies said that just because the two big portals are dominant today, it doesn't mean things will stay that way forever.
“There are new technologies coming through. Followit is one – that’s a disruptor coming through. It’s a better technology than REA, in my opinion,” he said.
“Or maybe REA will develop some better technology as a result of seeing Followit. There are disruptors coming from all industries. Let’s see what happens.”