Does REINZ recognise the issues facing Realestate.co.nz?

by Alistair Helm in


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This post is specifically written for real estate professionals in NZ, I am not saying that the content will not be of interest to other people, but I sincerely hope that this post more than many I write, is read and shared by real estate people who recognise the role and value of the Real Estate Institute of NZ (REINZ) and who share a belief in the value of Realestate.co.nz.

If you have been a regular reader, especially over the past 12 months since re-establishing Properazzi you will know that I have written regularly on the issues I see with Realestate.co.nz as the industry owned property portal, as well as other articles on the growing competitive threat it faces.

I have made these assertions based on what I judge is the unique experience and insight I have of property portal operation here in NZ and globally.

I’ve reached out in the past 6 months to some of the leaders of real estate companies who are shareholders in Realestate.co.nz, to share these concerned in a very detailed manner with extensive facts and market research. I don’t propose to share this insight here, as it’s based on my own IP and if anyone wants to pay me for this knowledge and insight, I am happy to discuss. To be clear I made it available to the industry simply because I am passionate not to see the industry squander the opportunity that Realestate.co.nz provides to all in this industry, both as a digital marketing platform but also a significant financial asset.

Sadly, my philanthropic gesture appears to have fallen on deaf ears. Not a single invitation was offered for me to meet with the board of Realestate.co.nz, the executive of Realestate.co.nz or any representative of its shareholders. Clearly from this I judge they do not think I have anything to offer. (Just for clarification and background for those who are unfamiliar, Realestate.co.nz Ltd is a privately held company as a joint venture between REINZ and Property Page NZ Ltd a private company itself owned by 5 of the large real estate companies).

With this lack of engagement, I chose this week try another angle and attend the AGM of the Real Estate Institute. I am a member of REINZ as a licensed sales person and therefore like 15,000 or so of my fellow real estate professionals able to attend this annual meeting. I requested in advance to table my address the Board of REINZ and the members present at the AGM under the General Business item of the agenda.

The AGM was a well-attended event and I would be the first to congratulate the board of REINZ and the outgoing chair Dame Rosanne Meo for the transformation that has been achieved in the organisation over the past 8 years. The industry has a professional and competent organisation that has a clear strategy to add value to its members across data, advocacy and education. However, my message to the REINZ board was sure to rain on their parade for which I make no apology. Bad news is never palatable but what I chose to speak about is I judge of significant importance.

I did not speak off-the-cuff but chose to deliver a pre-written address, so I could be succinct as possible and also I could share the address with others. Here is what I prepared and presented at the AGM.


Thankyou Madam chair, I appreciate this opportunity to address the board of REINZ and in addition the members of REINZ both here in person and through this meeting platform to the wider membership.

I have chosen to read from a prepared letter rather than express my opinion spontaneously for the benefit of brevity. Such is my deep concern for the governance of Realestate.co.nz that I might exceed my self-allotted time limit of 5 minutes.

I come here today to address this board and this organisation on a matter that I feels needs the urgent and critical attention of the board. As I will outline, I charge that the board of Realestate.co.nz have over the years mismanaged and squandered the opportunity to not only make Realestate.co.nz a credible and trusted digital platform for buyers and seller but also to create an asset of immeasurable value for the long-term benefit of all members.

Let me begin by introducing myself for those who may not know me. I have had the pleasure over 12 years in this industry to meet and get to know many of you here today. As some of you may know, I began my association with the industry back in 2006 when I became the CEO of Realestate.co.nz, a role I undertook for 6 years. Over the past 6 years I have continued my involvement with this industry working with direct competitors of Realestate.co.nz. Today I attend this meeting for the first time as a member of REINZ – a licensed salesperson with Bayleys. The comments I make here today are made as a customer of Realestate.co.nz and member of REINZ and I judge are professionally objective.

Let me be absolutely clear. I am deeply concerned as to the viability of Realestate.co.nz, not the long-term viability but literally the short-term existence; for I fear that the business has but a short timeline of relevance. I have over this past 6 months shared my thoughts and opinions with leaders in this industry in one-on-one meetings. I took the opportunity to address the board and assembled members here today as a vital opportunity to share this opinion within the wider real estate industry through the shareholding membership of REINZ.

At the outset Realestate.co.nz was established to support and protect the industry from the rapacious ambitions of the competitive media players. Sadly, that mission seems to have been ignored or at least less zealously aspired to over recent years. The company has in my opinion been poorly managed with lacklustre performance and at its core a woefully inadequate technology platform.

Over the 12 years of its operation, Realestate.co.nz has at times taken significant strides forward, whist at the same time has been offered significant competitive opportunities to attain leadership in the digital marketing space. Sadly, over recent years these opportunities have been squandered as a consequence of poor investment decisions made by the executive and board of the company. It is simply not true that the business is the leading property website and for the board of REINZ to be told that is at best misleading.

I hold the board of Realestate.co.nz responsible for what I think has been poor governance and worse still incompetent operational management of the company. This past year’s performance is appalling but is not an isolated year, prior years demonstrate that the opportunity has been missed to leverage this critical digital asset for the benefits of all members of REINZ.

Realestate.co.nz is a technology platform operating a digital marketplace, however over the past 5 years there has been not a single piece of innovation that can be demonstrated to in anyway challenge or in any way concern the competition. The current website environment is an embarrassment, comprises a capable but ageing 2010 ‘Classic’ site matched to a poorly executed ‘New’ site that after 18 months in the market is clearly recognised for the failure it is. Worst though are the mobile apps which nowadays as the platform of choice for more than half the audience of buyers and sellers; have been seriously neglected for years, having been at their launch the most innovative challenge to the competition.

In my opinion the management of the company has not demonstrated the competence required to run a digital business. I believe at the heart of the issue is the lack of technology and digital business experience within the board. Over the span of 12 years and 19 directors only 2 came to the role with the slightest relevant experience, over the past 8 years just 12% of the board representation has provided any relevant experience.

Realestate.co.nz was created as a ‘not for loss’ operation, as an asset for the industry – however to remain relevant and competitive requires reinvestment to grow, simply because in the digital classified arena if you are not growing you are declining and let’s be clear growth is not just providing annual results of revenue growth. Growth is asset value and consumer advocacy and I see no growth in either. The Chairman’s report this year reads like a facsimile of past years. Thanking the industry for support and speaking of challenges and improvements made but sadly these improvements must be in the minds of the board. For the industry, your customers are losing confidence, faith and trust in Realestate.co.nz – I know, I personally as one of your passionate and technically competent re-sellers is finding it increasingly hard to advocate the site to my clients, when it offers so little real value against its competitors, and as a technology platform it is rapidly becoming out of touch and I fear irrelevant.

I did not get the chance to finish this address, I was just over half way through when Dame Rosanne Meo stepped in and requested I wrap up. She stated that whilst she recognised my passion for the business of Realestate.co.nz, she judged that my opinions expressed were not the view held by the board of Realestate.co.nz. She said the board of REINZ were supportive of the Chair and board of Realestate.co.nz and as Realestate.co.nz is a separate company in which REINZ is a 50% shareholder this forum of the REINZ AGM was not the platform for discussing a separate company in which REINZ was just a shareholder.

I did not object to her interruption of my address, I respect her opinion and I politely and graciously returned to my seat. I was though naturally disappointed as I strongly believe that the performance and governance of Realestate.co.nz is a critical matter to REINZ, something that should be addressed.

I contend that the industry, that being the members of REINZ should have confidence that the operation and governance of Realestate.co.nz is being undertaken to optimise the consumer experience as a critical search portal, the customer value as an effective marketing platform for clients’’ listings and the asset value of the investment that REINZ holds in Realestate.co.nz for the benefit of the organisation and the industry. This latter criteria is the one that most concerns me as I fear the board of Realestate.co.nz have little appreciation of the true asset value – not a difficult assessment to make given the transparency of publicly listed property portals around the world.


SQUANDERED OPPORTUNITY

Let’s cut to the chase a bit here. The cold hard fact is that in my opinion the board of Realestate.co.nz have squandered a golden opportunity.

At the inception back in 2006 the focus was very clear – why let the traditional print media companies or their arrogant ‘start-up’ siblings dictate the future media platform of digital which was so clearly going to be the platform of the future, when we the industry, can compete and operate such a platform. This was the smart strategic insight. It proved so smart and by 2010 it was a successful strategy as it defeated the REA aspirant AllRealestate and thwarted the progress on Trade Me Property. This was the time when the board did assess the future equity value of the asset they were creating at the time when global property portals’ market cap’s shot skyward. The directors did star gaze and wonder if this asset might best be sold off for tens if not hundreds of millions of dollars, with that windfall gain being funnelled back into the industry for the benefit of the industry and its members.

Sadly, that mindset diminished, and the focus became beating Trade Me and attaining a goal that was illusive at best, and more than likely impossible – that of surpassing Trade Me’s audience and that is why the single-minded focus from 2013 became consumer advertising on TV and all other media with no thought to the investment in the technology.

As that strategy was followed, so the competition arose and that 100% audience gap stubbornly remained, years past and the notional asset value of Realestate.co.nz began to erode and that is where we find ourselves today. A still massive audience gap to the market leader in Trade Me, new competitors nipping at their heels and a technology platform creaking and crumbling from a lack of investment. At best the value of the asset now can be measured in single digit millions of dollars if it was even of value to anyone. This is the reality of a missed opportunity that I think the whole industry needs to know.


Addendum

This article was drafted between Monday 25th and Thursday 29th November, the Monday being the date of the REINZ AGM.

I was very tempted to post immediately after the AGM, but thought I would wait. Just to see if I had sparked any reaction, feedback or question, 4 days later nothing. Nobody in attendance at the AGM has made contact.

At the AGM, as soon as it had concluded I waited around. I was approached by the Chairman of Realestate.co.nz Fairfax Moresby. He asked me in a friendly manner ‘why I had not picked up the phone and chatted with him to share these concerns’ - I told him that I had chosen to reach out to the shareholders and not the executive or Chairman. That was decision I have taken , I did not feel the approach by me to either of these parties to tell them what they were doing wrong (in my opinion) was either appropriate or would be taken in the right manner.