REA Group’s market-based pricing model has “opened the door” for Domain Group to gain traction with a new national incentive scheme.
Domain Group has now added NSW and Queensland to its agent equity model, which debuted in Victoria in 2010 and arrived in South Australia and Western Australia in late 2014.
Under the model, each state has its own real estate business whose ownership is evenly split between local agents and Domain.
The businesses earn revenue from selling enhanced premium-plus products to vendors across Domain, ReviewProperty and Allhomes.
Domain Group chief executive Antony Catalano said REA Group’s decision to raise its fees in mid-2014 helped Domain market the agent-equity model outside Victoria later that year.
“There were a lot of disgruntled customers in regard to REA’s market-based pricing and they opened the door for us to have a conversation around an alternative,” he told Residential Property Manager.
“We’ve now talked to 400 agents in NSW, and each of them has said they can’t wait for an alternative that provides a better relationship with the publisher, a better product and a better result for consumers at a better price.”
Mr Catalano said the agent-equity model not only provides an incentive for the agent but also delivers value for vendors by exposing them to potential buyers across three portals.
“We currently deliver a better cost per enquiry than REA across many parts of Australia – in many cases, half the price to get an enquiry,” he said.
“It’s not simply selling on behalf of Domain – it’s about the agents being involved. Each of the state-based companies has agent board representation.”
REA Group celebrated its market lead over Domain when it unveiled its strong half-yearly results last week, but Mr Catalano was reluctant to hit back.
“I’m not in the business of having a go at our competitor. I think the industry does a pretty good job of making its feelings known,” he told Residential Property Manager.
“We’re in a positon now where we’re a genuine competitive alternative in the marketplace. Agents now have somewhere else they can go to.”