REA remains an extremely important supplier to the industry but its position has become too strong and there needs to be a shake-up in the listings space, according to a leading Victoria-based group.
Barry Plant, with 80 offices in the state, said there's always a lot of emotion attached to changes in listing fees, referring to recent criticism of realestate.com.au's new fee structure. However, it said REA’s market domination will continue until the industry gets its act together and establishes a more competitive market.
"With price increases, there's a lot of emotion around it,” CEO Mike McCarthy told Real Estate Business. "The bottom line is that REA is an extremely good supplier to the industry and provides a terrific service. Having said that, I think there should be more competition in the online market space. We need to strike a balance, as an industry we have to be mindful that online is a competitive space."
He added that it's “all well and good for the industry to complain about this and that”, but until the industry creates a more competitive space it's not going to change.
Mr McCarthy, who admitted that REA has “unhealthy” listings market dominance, also revealed that its main rival, Domain, has recently encroached on traditional realestate.com.au territory in Victoria, to the point where Barry Plant franchisees are now seeing as many enquiries from Domain as REA.
"Interestingly, the level of traffic to our website between REA and Domain is now close to parity,” he said.
"REA still have a slight edge but it’s getting very close. In discussions with my franchisees they’re saying they’re getting as many enquiries from Domain as they are from REA, which is surprising; I wasn’t expecting that,” said Mr McCarthy, whose business recently shifted a chunk of its premium listings spend to Domain and is a minor shareholder in Metro Media Publishing's reviewproperty.com.au.
He said Domain has always performed well in Melbourne's inner suburbs - where The Age is strong - but, he's now seeing a spike for Domain in the middle and outer suburbs, where it hasn't traditionally fared so well.
“It’s an interesting and very recent shift,” said Mr McCarthy. “Our analytics showed a big jump in March to our site. We’re waiting to see if it will be repeated for April"
He believes it's a trend and something agents should be communicating to their clients.
"We’ve a responsibility to our clients. If you can spend X dollars on premium [listings] for REA, or could spend a third of those dollars on Domain and get just as many enquires, it does start to become an interesting question," he said.