Real estate finished top of its class in the Australian online classifieds market in 2013, according to a new report.
With overall growth in classifieds spiking 10 per cent last year to reach $780 million, Frost & Sullivan's Australian Online Classifieds Market 2014 report found the real estate market "achieved very strong growth in 2013, as a result of strong residential housing markets in most states, and continued success by the major portals in converting customers to greater use of premium/depth products”.
The report forecast that real estate will display the highest classifieds growth in the next four years, spiking 12 per cent, while adding that although online classifieds expenditure will continue to grow, annual growth rates are predicted to continue to taper off as the market matures.
Frost & Sullivan said that customers have generally accepted the additional benefits that premium products bring, and this trend is supported by the fact advertising costs are generally borne by the vendor and not the agent.
“Very low interest rates have been a key driver behind the rise in residential property prices. There has also been an increase in new housing construction and, in turn, more activity in the developer market,” said Phil Harpur, senior research manager at ICT Practice for Australia and New Zealand.
Mr Harpur added that continued strength in the residential property sector, combined with further growth in listing depth products, will drive strong revenue growth over the next few years.
The overall classifieds market recorded a better result than the previous year’s eight per cent, with expenditure on automotive classifieds increasing six per cent last year, while there was a significant drop in revenue in the employment segment of four per cent.
Frost & Sullivan added that the online free classifieds model has grown very strongly over the past few years.
“It has increasingly gained consumer acceptance as a viable alternative to the traditional paid classifieds market, not only in the general classifieds segment but also in the traditional classifieds segments of auto, real estate and recruitment. This is placing downward pressure on online classifieds expenditure,” it said.