Trade Me Property assumes the mantle of data insight leadership

by Alistair Helm in ,


Trade Me Property today released a new competitive attack on its rival Realestate.co.nz with its inaugural Property Price Index. This report provides insight into the trends in asking price by region and also by property type. In my view vital information from a credible source that will be greatly appreciated by the real estate and financial community.

In launching this new report Trade Me Property has literally picked up the baton from Realestate.co.nz - a baton it seems Realestate.co.nz was only too happy to relinquish, but this may turn out to be a decision it comes to regret in time.

The NZ Property Report from Realestate.co.nz was conceived of over 5 years ago and has become a vital insight into the supply side of the property market, data that was quoted and reviewed by financial institutions and real estate industry as well as the media. Sadly the last 12 months and especially the last 6 months has seen less and less effort focused on the report by the management of Realestate.co.nz. The lack of focus started with the timeliness. When it first came out and for the first 3 years it was published on the 1st day of each month and the media become accustomed to this information which built brand profile and credibility. Latterly however it often took until the 15th of the month before being published. Added to tardiness was incompleteness and lack of openness. The release of the monthly information ceased to be a complete report and became simply a press release and just last month the data was not even published online and no access to the raw data has been made available. At this time the online source still only shows the July report. Clearly Realestate.co.nz attach little importance to being judged and viewed as a respected knowledge base and thought leader - that is the baton that Trade Me Property is grasping.

So what is there to like about this new report from Trade Me Property?

As with all things from Trade Me there is a simplicity and clarity of communication I admire, clean graphics aid comprehension.

However the real value is in the detail. They are the first source to have segmented any property information by property type. To describe NZ property sales price by one number when that number is made up of such a variety of differing house sizes and types from apartments to townhouses and units is too simplistic but that is what all the other source do - be it REINZ or QV.

Trade Me Property Price Index details the typical listing price for 1 & 2 bedroom houses as compared to 3 & 4 bedroom houses and the trend over the past year. Who would have thought that within the headline price of property in Wellington rising at an annual rate of 6.8% that large 5+ bedroom homes are down 5.2% over the past year.

 

The overriding benefit of this report is timeliness, being produced on the 2nd day of the month - ahead of all other property reports on the September data. This is how it should be as a property portal has the data at its finger tips to compute and present in minutes.

As to future wishes. I hope the raw data will be published so those organisations who have found the Realestate.co.nz so valuable will have access to this alternative data which is potentially more comprehensive as it features private listings as well as licensed agents (of course the boycott of Trade Me Property by some agencies may still limit their ability to represent the whole market but statistically this data should be representative). It will also be great to get more granular data so people can see the trend in listing price for a suburb and for 1 & 2 bedroom houses in a particular suburb over time - now that would be great.

In my view Trade Me Property has made a smart move and Realestate.co.nz have dropped the ball - let's see if there is a reaction and Realestate.co.nz realise how important this move has been.


Property websites becoming more and more valuable

by Alistair Helm in


Imagine a property website dedicated to the Christchurch market, not the whole of Canterbury, but just serving the Christchurch market, a population of around 350,000 people. A nice tidy little business especially if it was the website of choice for buyers, sellers and renters in Christchurch.

Now imagine if the news tomorrow stated that this website was just bought by Fairfax media for $53,000,000!

In effect this is what happened today, not in NZ but in Australia as Fairfax owned Domain (the second player in the Australian market behind Realesatate.com.au) acquired the website of AllHomes. It serves the Australian Capital Territory - a region of 381,000 people. 

The website is the leader in this market. It is forward thinking as it has moved beyond a subscription service to charge a listing fee of not $159 per listing as Trade Me is now charging but upwards of A$600 a listing.

Certainly Fairfax is paying a fair premium to achieve consolidation in this market in order for it to better challenge the supremacy of Realestate.com.au. It will have to be seen as to the success it has in running the site as a separate business before integration into the Domain stable.

Benchmarking this acquisition is difficult as city specific property portals are rare. However on a population basis this acquisition values the Allhomes business at $139 per person in ACT. This compares with a current valuation for the REA Group which owns Realestate.com.au edging over $6 billion which equates to $277 per head of population in Australia. Both of these far surpass the collective value though of the two powerhouse property portals in the UK Rightmove and Zoopla which with a combined market capitalisation of over $6 billion equates to a value per head of population of just under $100.


The real estate industry's transition to digital marketing

by Alistair Helm in , ,


Walk past any real estate office and you will likely see a couple of wire framed baskets chocked full of the latest copies of the local property magazine - in Auckland these tend to be for Property Press, The Herald Homes and then there are some other local options and usually these days a Chinese language real estate magazine.

I don't need to procrastinate on the visual pollution these create on the high street or the lack of value they represent, nor the fact they never seem to diminish in number of copies until the next week's edition rolls in. The fact is the world over real estate marketing is going digital - it's only a matter of time until we see less of these publications cluttering up our footpaths.

The scale and pace of this transition is something I am often asked about when providing advice and consulting to businesses. I hold a fairly detailed and what I think is accurate picture of this for New Zealand. So it was with great interest whilst reading the Prospectus for the IPO for Zoopla Property Group the operators of the UK property portal Zoppla that I found data for the UK market on just this subject.

Quoting from the report:

According to Ender’s Analysis, total UK classified property advertising spend was £389 million in 2012,
comprised of a 45 per cent and 55 per cent split between digital and print advertising, respectively
— Zoopla Property Group prospectus (page 48) - June 2014

It is anticipated that during the current year in the UK year the total spent on digital marketing by the real estate industry will for the first time exceed that spent on print advertising. In total the UK real estate industry will spend  £427 million on advertising this year. The future trend estimates for the next 3 years clearly show an accelerated divergence between print and digital with digital set to grow by 50%.

Screenshot_10_06_14_10_34_am.png

In New Zealand the make up of the spend by the real estate industry is somewhat different. Print media has done a laudable job of defending its position and through its relationship with the major franchise groups has constrained the digital media spend to less than 20% at this time, although it is, like the UK forecast in my estimation to grow significantly in the coming years. It is though not expected to exceed the print media spend in the next 3 years.

Clearly the drive for the cannibalisation of the print media across the globe holds the prospect of a significant pot of gold for the challenging companies in each country which more and more these days are publicly listed companies of significant value; be that Rightmove and Zoopla in the UK, Trulia and Zillow in the US or REA Group and Domain in Australia. Each is fighting for an ever greater share of the cake of advertising dollars of its customers - the real estate agents of each respective country. In New Zealand we have the challengers of Realestate.co.nz and Trade Me Property - a duelling pair, however the pot of gold for which Trade Me aspires may not be the same reward sought by Realestate.co.nz as an industry owned portal.

Comparing such data of advertising dollars between countries is hard to undertake unless some benchmark can be established. For this analysis I have chosen to index the NZ and UK real estate digital marketing spend by an index to the number of property transactions in NZ$ terms. Presented below is this analysis showing the extent of advertising spend per country over the past 7 years per property sale. In the UK total property sales over this time peaked at 1.23 million in 2007 before falling to 616,000 in 2009. In NZ over the same period sales peaked at 92,000 in 2007 before falling to a low of 56,000 in both 2008 and 2010.

Interesting to see the NZ real estate industry spends more per sale than their UK counterparts. The relative difference in the digital spend is staggering - a two and a half times factor. It makes the whole discussion around the relative cost / value of a charge of $159 per listing from Trade Me seem a bit moot!

The other point to note in this index comparison is the fact that the total of NZ$1,065 spent per property sale by the UK real estate industry comes straight out of their commission margin where average commissions on sale are around 1.5% whereas NZ agents who charge around 3% commission on sale price secure around an average of $200 per sale of vendor marketing contribution to offset their average spend of NZ$1,244.


Trade Me Property continues to struggle

by Alistair Helm in ,


Another month has passed and the continued impasse within the real estate industry as individual companies decide as to their commitment to Trade Me Property continues. This all began late last year and with each passing month I have the sense that the struggle for Trade Me Property grows. They still attract an enormous audience relative to Realestate.co.nz but losing support and loyalty of their customers - the real estate salespeople and business owners must be hurting.

A month ago I reported on the latest analysis of the differential in listing stock between Trade Me Property and Realestate.co.nz. At the time the total inventory advantage fell to Realestate.co.nz with Trade Me having just 92% of the listings.

A month later and the relative advantage has moved further towards Realestate.co.nz. For the data presented below I have made an adjustment for the component of 'private sale' listings on Trade Me Property to thereby provide a more accurate reflection of the differential for licensed real estate agent listings. This adjustment revised the 92% figure to 83% of all licensed agent listings on Trade Me Property at the end of April.

The passage of the month of May has resulted in a weaker relative position for Trade Me Property now with just 76% of the listings stock of licensed agents as compared to Realestate.co.nz - close to 1 in 4 of every agents listings is now not being displayed on Trade Me Property.

A significant drop has been seen over the past month in the inventory of Barfoot & Thompson on Trade Me down from 95% to 78% whilst Ray White continue to shows the strongest support slipping just 3 percentage points from 97% to 94%. By contrast Harcourts, the largest NZ real estate company now has less than 2 of every 3 of their listings on Trade Me Property.

With the passage of time so the transition of real estate companies to the new subscription regime has progressed, my latest insight is telling me that almost all of the major real estate companies are now onto the new subscription plan of a payment of a single fee for every listing (rate card $159 + GST). However unlike the prior monthly subscription fee of an "all you can eat" model just because a real estate company is on the subscription plan does not mean all of the listings of that company are displayed on Trade Me Property.

New listings are a more accurate indicator of the level of support for the new pricing model and the data of listing numbers taken from the respective websites shows how the industry is acting in voting with its marketing dollars on behalf of its clients.

In the month of May Trade Me Property only displayed 3 out of every 4 of the new properties listed in the month on Realestate.co.nz. That disadvantage was even more significant when you look at the new listings in May from the largest real estate company Harcourts which displayed less than 6 out of 10 of it's new listings on Trade Me Property; for LJ Hooker it was only half of all new listings. Ray White continues to show what looks to be staunch support with 95% of all new listings in the month featured on Trade Me Property.

New listings are the life-blood of the industry and these figures certainly show that this impasse over listing fees may well have started out as a regional boycott with the mass-removal of all listings, but has now turned into a more damaging and potentially insidious erosion of new listings one-by-one, day-by-day, agent-by-agent.

 


We still know so little about overseas buyers of NZ property

by Alistair Helm in , ,


This week we have seen two supposedly insightful pieces of data helping to provide insight to the extent of international buyering of NZ property - one from Labour and the other from National. Irrespective of the validity of the data (I'll come to that in a minute) it clearly shows the fear and/or uncertainty surrounding the extent of international buyers' activity in the NZ property market. Certainly from a political perspective at least.

The first set of data released was from Treasury analysis of IRD data into tax returns filed by rental property owners. The data showed that from amongst 200,000 such tax returns around 12% (24,000) were from non-residents.

This data is certainly robust as there's somewhere around 400,000 privately held rental properties in NZ - allowing for multiple ownership this would cover most of the tax records. However the question has to be asked - what relevance has this data?

Included in this total of 24,000 would certainly be ex-pat kiwis with homes or investment properties here in NZ, and with the overseas ex-pat community somewhere close to a million people by all accounts, this group could account for all of it. Also the data provides no insight into the changes in the make up of this group of the years and thereby any inference of proportion of sales. The only trend analysis (Figure 1) shows that this segment had not actually grown significantly over the past 15 years during which time the NZ resident ownership base grew from 110,000 to 180,000 whilst the non-resident (as well as "unknown" whom the analysts suspect are likely to be non-resident) actually fell from around 28,000 to 24,000. 

The second set of data released by Labour's Housing Spokesman Phil Twyford presented the statement that based on data from a Chinese real estate website New Zealand is the 5th most popular place Chinese buyers look to purchase residential property behind the US, Australia, Canada and the UK.

The website to which the statement refers is SouFun - the biggest property website in the world, whilst not publishing traffic figures to its site, it is a listed company on the NYSE generating EBIDTA of US$360m on revenues of US$640m - this is a significant company operating in a massive real estate market. A market with annual transactions in the multi-millions of properties.

However whilst the audience and presence of the website is enormous in domestic Chinese terms, the capacity of it to attract an audience to NZ listings is tiny - no correct that microscopic.

In total they host probably somewhere over 4 million properties for sale across China together with a tiny add-on of around 35,000 listings from outside China. Within that 35,000 international listings there are 23 NZ listings - yes 23, check them out.

Many real estate websites around the world host international listings. The most significant of which is probably the UK site Rightmove which hosts over 125,000 international listings from more than 65 countries. Rightmove hosts 3,476 NZ listings which would equate to over 8% of all NZ property.

The fact is that the SouFun international section of the site is not representative of the true listing stock of any country it showcases. The closest it comes is actually Australia where it hosts over 6,000 listings - yet that represents less than 3% of the more than 230,000 listings of Australian property on the market today. For NZ there are 42,751 properties for sale at this time across the country and SouFun showcases 23 of them - less than one tenth of one percent.

It is therefore at best misleading and more likely totally irrelevant to showcase this data as any form of indication of true Chinese interest in acquiring NZ properties. 

Having said that there is no doubt we still need to find away to collect and analyse the data of property transactions - something I seem to be constantly championing - is anyone listening?


Trade Me Property adds School zones

by Alistair Helm in ,


Whilst Trade Me Property may still be grappling with issues of agent loyalty and patronage, the technical team appear to be focused on what is important - adding richer and more relevant information to the site. 

School zones are a much quoted detail in many property listings as agents recognise the importance (and value) of the 'in-zone' location of properties. Whilst no objective data is available on the added value of an 'in-zone' location for NZ property or any consumer research, I did find some insight from overseas. In the UK a recent report entitled "The Good School Guide" produced in association with the Estate Agency Savills has found that parents are prepared to pay a premium of almost 22% to buy a home close to some of the best state secondary schools in the country.

In the US a recent homebuyer survey from the National Association of Realtors. The survey examined factors influencing neighbourhood choice amongst the various generations. For those aged 34 to 48 years the quality of the school district was the third most important criteria after overall quality of the neighbourhood and the convenience to work.

So with this endorsement of the value of such information it is therefore surprising that it has taken over 5 years for either of the leading real estate websites to incorporate school zone data into the mix. Credit should be given at this time to Barfoot & Thompson who incorporated School Zones into their excellent iPad app last year.

The Ministry of Education has provided an open data platform of school zones for years and provides an interactive map to help the public identify the zones of all schools (those that define a catchment area).

Trade Me has just this week released an upgrade to their website that delivers an excellent integration of not only the the school zone data but all data on schools within the geographical area of the property for sale.

The functionality is within the map section of the site and delivers not just the details of which schools are in zone but also key facts about those schools - size and decile ranking as well as distance from the property. The selection of schools covers Primary, Intermediate and Secondary both state and private schools.

Whilst I think this is a valuable enhancement of functionality to go alongside the other recent enhancement of boundary view I think the user experience could have been better enhanced along these lines.

  • The School information could have been incorporated into the primary facts about the property rather then making them a opt-in option of the map - simply listing the 'in-zone' schools would be a real pus and putting that up front.
  • The schools by type could be ranked by distance from the property in descending order. Also using a colour scheme to differentiate between state schools (showing in/out of zone) separate from private schools.
  • The addition of this valuable data to their iOS apps - especially given the level of usage of the mobile app environment when searching for property and the map-centric aspect of search.
  • Probably the greatest missing component given the data integration is "search by school zone" within the search function so instead of searching for 5 bedroom homes under $800k in Onehunga and then having to look at each one to see which are in-zone for Royal Oak Intermediate you could add this requirement into the search options.

Overall though a great step forward and so good to see a step up in technology innovation from Trade Me Property.

 


Choosing the right Property app for the iPad - a review of the NZ options

by Alistair Helm in , ,


Digital background iPad shutterstock_174836606.jpg

It’s just 4 years since the iPad first entered our lives and despite the view of some commentators, that sales might only top a couple of million, the product has become a legend and total sales to date far exceed 100 million and are likely to continue to accelerate in the coming years.

The device fulfils a role that is far removed from the functionality of the smartphone device or the classic desk-bound computing device. The device is tactile and is as likely to be found on the couch or kitchen bench, as on an office desk. For this reason, the iPad (and the other Android based tablet devices) is in many ways the battle ground for property apps, as property searching is largely a ‘lean-back’ experience undertaken in times of rest when you want to immerse yourself into a world of escapism with dreams of a new home.

For these reasons I would contend that the best property iPad app almost bears no relation to the iPhone or smartphone app. They provide platforms for very different use cases. The smartphone is all about proximity based discovery and routing to viewings as well as alerts to new listing - functional activities requiring key information, easily and quickly accessible. The iPad is all about browsing in a mode that the traditional laptop or desktop could never deliver to the needs of the buyer or renter. The experience needs to be more of a magazine experience - rich in imagery and immersive in context. The iPad is an intimate device that is held close and in effect caressed and so the experience of an app needs to bear that in mind.

For New Zealanders however I have to sound a note of cautions for the options here are limited and to be honest none of the 3 I have reviewed really deliver to the experience of some of the best in the world and for me some of the best are found in the highly competitive US market with the app from Redfin being a great example.

So let me share my thoughts on the 3 options for New Zealanders, from Trade Me Property, Realestate.co.nz and uniquely a real estate company app from Barfoot & Thompson. I propose to deliver this review in the similar manner as a car review, scoring points based on key categories. These categories are ease of use, content, search and overall user experience.

Just for clarity this review is based on these versions of the various apps:

Trade Me V2.0.13 March 27, 2014

Realestate.co.nz V2.0.2 April 1, 2014

Barfoot & Thompson V1.5 April 2, 2014


Ease of Use

In overall terms, all of these apps are easy to use and fairly intuitive. However to start with extra marks go to B&T for the new overlay intro tutorial which in a couple of screens gives you a great overview of the functions so nothing is left to chance. 

Both B&T & Realestate.co.nz choose to begin the user experience with a map defaulted to your location devoid of any filters. In my view this is the best landing screen for a property app on the iPad. Realestate.co.nz does things slightly better in having a right hand column of listings from the area ranked by latest listed date - a missed opportunity would be the contextual reference numbering which could show the location of these properties on the map.

Trade Me on the other hand defaults to a list view of properties ranked by latest listing but based on the whole database of NZ making the initial experience woefully irrelevant as context is everything! To get to the same experience of a local map as the other two apps takes 3 more taps - a tap too far!

When selecting a listing from the map to view details, B&T chooses to take you to the listing and ignore the location context of the map, whereas the other two provide a hybrid screen of map and listing details. Here there is a vast difference between Trade Me Property & Realestate.co.nz in terms of the amount of screen space given to the listing vs the map. Way too much focus on the map by Realestate.co.nz diminishes the viewing of a listing.

When in this mode it takes just a single tap on a listing pin on the Trade Me Property app to shuffle to another listing - very intuitive. Realestate.co.nz makes you work hard with a required 2 taps to get to a new listings.

None of the apps provide what I judge to be a logical interactive functionality - that being a map with a list of properties whereby the selection of a property on the list highlights (by changing the colour of the map marker) where it is on the map and visa versa - here's this in action on the Redfin app - not a perfect execution but valuable functionality.

The B&T app provides one form of functionality that the other two don't and I love it. It is a flipboard style image viewer which lends itself to the casual, elegant flipping through properties in a magazine style - great execution and a powerful point of difference.



Content - Listings

Untitled_2-9.png

Listings are what powers these apps and each have the same core data regarding their portfolio of listings. Clearly in richness of content the B&T app can only showcase their own listings thereby pushing them down the rankings however because they originate the content of the listings they show they are able (or have chosen to develop) functionality that is richer; I speak specifically of videos and floor plans.

Trade Me has the most comprehensive portfolio of listing, especially considering the dominance in rental listings the site enjoys as a function of the private landlord market. Talking of rentals, a point of note is the fact that the B&T app does not feature rentals, only property for sale.

The most important component of all listings are the photos, this is key whether you are viewing on a handheld device or a laptop, but to fulfil the desire of a lean-back browsing based couch device the iPad has to have stunning images. The raw data of image files for each app is identical (although B&T has the advantage of the original raw image files) but sadly Realestate.co.nz lets itself down by what looks like the use of compressed image files designed to be viewed on an iPhone. The sequence of images and 'blow-ups" below graphically illustrates this.

Untitled_2-4.png




Content - Complementary data

Untitled_2.png

I added this category to make a point. That point is School Zones which is the differentiator between the B&T app and the others. Neither Trade Me Property nor Realestate.co.nz offers any complementary data other than listings. But that is what we want! - I hear you cry!

Well there in theory could be so much data that could be of value:

  • Crime stats
  • Flood zones
  • Postcode
  • Sun angles
  • Walk score
  • Transport routes
  • Parking zones
  • High Speed Fibre coverage
  • Flight path routes
  • Rateable value
  • Property valuation estimate
  • Council Zoning

Many of these sets of data are simply not available in NZ or only at prohibitive cost. However the point is valid and I think important. School zones are public data and easily incorporated into an app and yet the two leading players choose to ignore the details. Good on Barfoot's for showing the way.

However B&T don't stop there they also have a tab in the listing view that includes the StreetView from Google - beautifully integrated into the full screen view - beautifully executed!


Search

The Realestate.co.nz app is the only one of the 3 to use aggregation of listing 'pins' which on the zoom out function reverts to a number to show the total of listings in an area. Trade Me uses red pins which cluster on zoom out until they disappear with a notice instructing you to zoom in - not a very friendly experience. B&T adopt a kind of mid solution - red pins which don't cluster but when you click on them on zoom out show a number of listings for the local area.

Only Realestateco.nz uses differentiation in the pin design to highlight 'New' listings, in my view a valuable feature it is the only app allowing you to also filter the search by 'days-on-the-market'. Both B&T and Realestate.co.nz do display 'Open Home' flags on listings with B&T offering an ability to filter the parameter of open homes by 'any time / this week / today / open in next hour' which I find really useful.

In terms of search filter the Realestate.co.nz and Trade Me apps rely on the iOS format scroll wheel for price and tick boxes for other criteria. As noted in the review of the Realestate.co.nz iPhone app the somewhat restricted search ranges especially on price and on bedrooms as compared to the website is surprising. B&T adopt sliders for price, bedrooms and bathrooms, something I find difficult from a user functionality perspective as the finger tends to obscure the slider and there are no visual cues to the gradations on the slider.

A key part of search on any device is the context of location presented by maps - real estate is always conditional on location and therefore despite the fact that the use of the iPad app may be on the couch the map view is important. Here the 3 apps differ, with in my view Realestate.co.nz taking top honours by using the Google map application layer whereas both B&T and Trade Me Property have defaulted to the Apple Maps layer. This is so evident as a drawback when viewing in Satellite mode - the resolution on the Apple Maps layer is so inferior to the Google Maps layer. These images below show the highest zoom in you can achieve in each app before losing resolution - a vast and significant difference.


Overall User Experience

Getting to use these apps begins to show their respective strengths and weaknesses. In reference to my earlier comments, in my view Realestate.co.nz is the weakest, as simply this iPad app is the iPhone app adjusted to fit the format of the iPad, and sadly as noted earlier the issues with screen resolution makes it the least likely app for 'lean-back' browsing. Too often the majority of the screen is taken up with the map view which does not interact with the property or list view in an intuitive manner. It does have the value of the higher resolution satellite imagery but this is not enough to make for the shortfalls.

Trade Me Property delivers a better solution, however given the resources and capability from a company of their size and knowing how critical the property sector is to the overall performance and long term value of this publicly listed company, I would have to say the app delivers at the lower end of expectations. Too much focus remains driven on the user experience of the web and too little time seems to have been spent on experiencing other property apps and other magazine apps in general as a benchmarking exercise.

The winner by a wide margin in my view is the Barfoot & Thompson app. A well executed iPad app that has been thought through and tested to deliver an experience that I would enjoy using - a credit to the marketing and tech team there.

The saddest conclusion though is that the best app is at best a great platform which will be so seldom used as fundamentally who will ever use it? - it showcases just Barfoot & Thompson listings - sure that is close on 4 out of every 10 listings in Auckland, but what use is that?

Given the clear advantage that the app delivers if I was in the role at Barfoot & Thompson I would make a smart decision. I would as a 22.22% shareholder in Realestate.co.nz* license the app to Realestate.co.nz and thereby benefit doubly - prove the credibility of the technical and marketing prowess of the team and at the same time earn a license fee whilst at the same time deliver to Realestate.co.nz as a championing industry owned website to challenge Trade Me a superior app to the current one - food for though!

Note * Realestate.co.nz is a joint venture between The Real Estate Institute of NZ (REINZ) (50%) and Property Page (NZ) Ltd (50%). Property Page (NZ) Ltd is owned by Harcourts Group Ltd (22.22%), Ray White (Real Estate) Ltd (22.22%), LJ Hooker New Zealand Ltd (22.22%), Barfoot & Thompson Ltd (22.22%) and Bayley Corporation Ltd (11.11%)

 

 


Trade Me Property vs. Realestate.co.nz - the debate continues

by Alistair Helm in


My recent article on the state of the online property space here in NZ has raised some interest in the media - clearly the issue is topical, but more importantly there is much at stake. The potential value at play here is anywhere between $100m and $1,400m per annum. The former amount being the total expenditure by the real estate industry on marketing; the latter being the total value of the commission based services charged by the real estate industry upon its clients - the sellers of residential property. Clearly Trade Me is not intending to disrupt the whole industry but equally the real estate industry feels threatened and so their value is under threat!

For Trade Me the goal of the lion’s share of the $100m a year in property marketing is critical. The most recent estimate would put their annual revenue from real estate (licensed agents, excluding private sales) at $15m, this would more than double if not triple if they can secure their new pricing structure. Trade Me is a listed public company and its ambition and its shareholder expectation is to dynamic growth and from that a healthy cash-flow based on an earnings-to-sales rations of over 75%. To achieve this, as they have said, requires a growth in its best performing sector - classifides of which property is the key.

For Realestate.co.nz its goal is to block the Trade Me ambition and in so doing wrestle control of the digital advertising platform from Trade Me so as to provide its shareholders (The Real Estate Institute of NZ (REINZ) and the 5 largest real estate companies) with a cost effective marketing solution; whilst at the same time transition advertising from print to online.

I very much appreciated the very detailed response to my recent article from Jimmy McGee, the Head of Commercial at Trade Me, who has been holding the reins of Trade Me Property awaiting the start of Nigel Jeffries who steps into the role as Head of Property shortly.

His response can be read in full in the comments to the last article. I have chosen to dissect the complete response and in so doing respond specifically to all of his comments, somewhat in the form of a Q&A.

 

Trade Me Property

1. We think things will settle down over time and Trade Me Property will remain an obvious marketing option for agents & vendors. Why:

  • because it is the #1 source of buyers
  • because it has a huge audience
  • because it is great value at less than $200
  • because of our private listings that buyers won’t find on industry websites

 

Properazzi

I would concur Trade Me will remain an obvious marketing option for agents and vendors. More people, more of the time use the web to search and research real estate. In many countries property websites are in the top 5 of all trafficked sites (UK & Australia) Trade Me is certainly a Top 10 website in NZ so it is logical all agents would see it as a valid option.

Anecdotal evidence from agents - in fact almost universal evidence from agents over the past few years from my experience is that Trade Me Property delivers far more buyer leads than any other medium (not just than any other website).

Trade Me audience is huge and brand awareness massive - no question

At a base cost of $159 +GST as recharged by an agent, the cost of a listing on Trade Me is stunning value for money. Nothing comes close - especially not print media with single page insertions costing thousands

The value of the private listings as a unique added content on Trade Me is huge. Up until recently with both Realestate.co.nz and Trade Me Property having the same level of agent listings the advantage to Trade Me has been key - the consumer will always seek out the richest content

 

Trade Me Property

2. Trade Me Property is a compelling marketing option for agents and vendors. It provides listings with huge exposure to a massive audience of passive & active buyers. We know around half of property buyers found their home on Trade Me Property – and realestate.co.nz was well behind with 2%. (These statistics are from a Perspective Research survey)

 

Properazzi

This statistic is not shared lightly and is massive. Trade Me is a publicly listed company and as such has to be carefully and prudent when making any claim - to claim then that a competitor achieves a level of just 2% of all property buyers (in a survey) as compared to Trade Me Property at around 50% is not done rashly or without careful consideration.



Trade Me Property

3. We’re not resting on our laurels. We understand we need to keep working hard to demonstrate the value and effectiveness of Trade Me Property as a marketing option for agents and their vendors – it’s not something we take for granted. As we’ve always said: “You should only use TMP if it helps you sell houses.” We’ve recently released aerial boundary images, will show school zones soon also. Plus well have map-based search for desktop out in a month or so. And last but not least, we’ve got some exciting stuff in store for our mobile products.


Properazzi

Now this is where I think that Trade Me Property has been deficient for a considerable amount of time. They have not been a significant innovator. Even today the user experience of Trade Me is of a single unified platform built around auctioning household items which leaves the properties section woefully underserved as compared to other property portals overseas. I would have to say Realestate.co.nz has not been that innovative, however their latest version of their iOS app is a good step forward, despite the stumble!

Trade Me Property has been weak in delivering a credible mobile experience - certainly as they cite later in their response, many people may well use the general Trade Me mobile app for property searching but it is not a step forward in property  searching merely a mobile version of the web search.

 

 

Trade Me Property

Trade_Me_Property_on_the_App_Store_on_iTunes.png

4. There’s a sense of back to the future: we’ve been here before. TMP was started from scratch back in 2005 at a time when the RE industry had their own website with thousands of listings on it. There are important philosophical differences between TMP and industry sites including::

  • TMP is designed to empower consumers and puts private listings and agent listings on a level playing field.
  • TMP is independent, not industry-centric, and aims to provide buyers with as much transparent information as possible.
  • We believe that over the long-term, loyalty from buyers and sellers will come via TMP being an effective and good value marketing option, and providing users with the best experience. 

 

Properazzi

I would agree there is a sense of Back to the Future here. Back in 2008/9 there was a stand-off by the industry resisting the desire to have their listings on Trade Me. In 2006 only around 30% of licensed listings were on Trade Me. By 2008 that had risen to 65%, but some of the major groups held out, most notable Harcourts. By 2009 all groups were on Trade Me Property, not for the reason of negotiated buying rates, but simply because vendors demanded agents put their property on the site, these agents demanded that the business owners agree to list on Trade Me. Today we have the opposite effect of business owners telling agents to tell vendors that they don’t want to be on Trade Me - because they don’t want to pay $159 + GST to market their clients property!

I would agree Trade Me has always been about empowering consumers. However it has also always been about creating value and enhanced shareholder wealth.

Trade Me is independent as much as Fletcher Building is independent or any other publicly listed company is. It's a publicly listed company with shareholders and a board of directors representing those shareholders who hold the executive team to account to enhance the value of the company. It's there to make money - Trade Me is not a charity.

I think the comment “not industry-centric” may have been a mistake, for a property portal to be successful, it has to be customer centric where the customer in this case is the agent. Not the consumer, and thereby the business has to be 'industry-centric'. I think in someways this is at its core, one of the issues that has caused the problems in Trade Me Property this year.

 

 

Trade Me Property

It’s fair to say we’ve got some concerns about the flyer and the overall impression it creates that the industry-owned site has both more house listings and more traffic than other websites. We think this is off the mark.

Total listings:

The nationwide picture is distorted by the actions of some agents who withdrew listings in Hawkes Bay & Hamilton. TMP still has more residential for sale listings in a bunch of areas, including Auckland, Wellington & Canterbury.

This analysis includes lifestyle listings, where we have 1,000 fewer listings than RE. We’ve probably lost a bit of ground there to the way we’ve treated lifestyle listings, rather than agent backlash. We currently exclude lifestyle from residential search, which we’re looking to change soon. We expect this will make it a far more compelling proposition for agents and vendors of lifestyle properties.

 

Properazzi

Whilst Trade Me might have concerns over the flyer, my analysis shows the statements made have validity. At this time Realestate.co.nz does have more listings. 

I have gone back to examine the listings data as at the 6th April utilising the same methodology to compare each category of listing on both sites across the main metro centres.

Auckland sees Trade Me Property with 6% more listings overall, however when stripping out an estimation of privately listed properties to examine side-by-side licensed real estate listings Realestate.co.nz has 479 more listings - an advantage of 5%.

Untitled_2-11.jpg

In Wellington the two websites classify the region geographically using differing boundaries, for the sake of comparison I have excluded from the Trade Me Property listing the districts of Carterton, Masterton and South Wairarapa which are not included in the Realestate boundary of Wellington, thereby as best as can be evaluated the listings data is like-for-like.

Wellington sees Trade Me Property with just 1% more listings overall, however when stripping out an estimation of privately listed properties to examine side-by-side licensed real estate listings Realestate.co.nz has 346 more listings - an advantage of 12%.

Canterbury sees Trade Me Property with 11% more listings overall, however when stripping out an estimation of privately listed properties to examine side-by-side licensed real estate listings realestate.co.nz has just 92 more listings - an advantage of 3%.

So it is fair to say that in the major metro regions of NZ Trade Me Property have more listings, however from a consumer standpoint to be able to examine the true comprehensive picture of all property advertised for sale you would need to use both websites.

As the analysis includes Lifestyle properties the comments about the display structure of these listings on the Trade Me Property site is more an internal issue for the company and its design team.

 

 

Trade Me Property

Audience: Trade Me Property’s audience (average daily unique browsers during March 2014) as independently measured by Nielsen, is more than 3x the audience of any other property website in NZ. Looking at data from the past 7 months, Trade Me Property’s monthly audience has included an additional 76,000 and 92,000 more browsers each month than any other competitor site. According to Nielsen, 77% of visitors to TMP didn’t visit RE (Feb ’14, NetRatings, total traffic).

 

Properazzi

I am grateful for the exact Nielsen data provided in the response. I have mapped the data and added it to the chart Trade Me Property also presents on its agent home page which shows data from April 2012 to March 2013. As can be seen the differential between Trade Me Property and realestate.co.nz is significant. Trade Me Property has 3 times the average daily traffic but a year ago the differential was 5 times and 2 years ago the differential was 6 times. In March realestate.co.nz average daily visitors were up 95% as compared to a year ago - Trade Me Property average daily visitors up just 8%.

 

Trade Me Property

Hawke’s Bay listing numbers:

Some agents are disregarding their vendors’ best interests.

Agents in some parts of the country are taking advantage of their role as a trusted advisor and using vendors as pawns in a real estate industry power play.

Not having listings on Trade Me Property means less people will see the house for sale which means the vendor is less likely to sell, or get the best price.

We don’t believe these realtors have their clients’ best interests in mind as their clients’ properties are not being seen on the country’s best property marketing channel.

We think agents should do what is best for their vendor, and that would generally include using Trade Me Property as a way to get properties in front of the largest audience and helping them sell more property.

 

Properazzi

I believe some of these comments are valid. Given the significantly larger audience to Trade Me Property and the data on those who visit Trade Me Property and not Realestate.co.nz then an agent not advertising a clients property on Trade Me Property is disregarding their clients best interest. Further this action of refusing to advertise or telling clients that they don’t recommend Trade Me Property is using clients as pawns in a power play that is out of all proportion - a fee of $159 + GST is the cheapest form of advertising. It's time the agents woke up to demonstrating their role and either pay it out of their commission or re-charge it.

Stating that not advertising on Trade Me Property means less people will see the house for sale which means the vendor is less likely to sell, or get the best price, is a serious stretch. This can never be proved and as I have written recently property sales never have a ‘control’ environment.

 

Trade Me Property 

We understand why you’ve compared the iPhone app for TMP and RE, but it’s only part of the picture. This is because as well as the TMP app, heaps of New Zealanders use the TM app to browse for property on their iPhones. Nielsen’s research has also found that more people downloaded or used the Trade Me app to search for property than the Realestate.co.nz app.

 

Properazzi

Whilst the fact that ‘heaps’ of New Zealanders may well use the standard Trade Me app to browse property on an iPhone, that experience is not comparable to the inherent value of a mobile app for property which is what both the Trade Me Property app and Realestate.co.nz app deliver - the battle grown is now, and in the future the mobile space / app environment. If Trade Me Property want to win this battle they need to avoid relying on users engaging with Property on their main app. My advice would be to exclude property listings on the main app and create a mindset change that will get those users to download the property app.


Realestate.co.nz making serious moves on Trade Me Property

by Alistair Helm in


There has not been much commentary for well over a month on the tension between Trade Me Property and the real estate industry - up in arms over the new pricing structure. That was until this marketing flyer hit the digital wires today. Proclaiming that traffic and activity on the industry owned website of Realestate.co.nz has "gone through the roof".

These are some significant stats and naturally I am always keen to look into the numbers, where I can, to provide what I see as valuable insight.

 

1. More homes for sale than anyone else

Based on my own analysis as of today (2nd April) this is most definitely true. Not just more, but significantly more!

For the past 3 years at least Trade Me Property has had a subscriber base at least equal to Realestate.co.nz or close enough to make little difference and so from the perspective of licensed agents the two sites have been line-ball. On top of this Trade Me has an additional stock of listings from private sellers which on average have amounted to around  16% of the Trade Me listings which generally means Trade Me has around 18% to 19% more listings than Realestate.co.nz.

As of today that advantage to Trade Me has disappeared and Realestate.co.nz not only has more listings (a margin of 4%) but by applying an estimation factor for private listing, Realestate.co.nz has considerably more licensed agent listings (a margin of 18%).

In seeing this significant advantage to Realestate.co.nz I was naturally drawn to look at the hot-spot of the Hawkes Bay where the boycott against Trade Me continues and has seen a large proportion of agents listings only appearing on Realestate.co.nz. The actual make up of listings on both sites as of today in the Hawkes Bay are as follows.

This is staggering. In the Hawkes Bay Trade Me Property is only displaying 428 houses being marketed by real estate agents for sale as compared to 1,103 houses on Realestate.co.nz - I know where I would be looking for property for sale for sure in this area of the country!

 

2. More Traffic

The marketing flyer speaks to a lift of 30% in traffic over the past 6 months quoting Nielsen average daily unique browsers, certainly a very credible source of data. Not having access to Nielsen data I turned to a source I use quite a bit these days Similar Web. This service provides estimates of website traffic, by no means as accurate as Nielsen of Google Analytics but useful as far as seeing trends.

The trend since the start of the year has been of a significant growth backing up the more credible Nielsen stats.


No. 1 Property App

The Realestate.co.nz iPhone app was the first mobile property app in NZ, leading Trade Me Property by 18 months. Since that launch in late 2010 the app has been downloaded more than 200,000 times and rightfully can claim the mantle of the No. 1 property app in NZ.

The marketing flyer speaks to the download rank as the demonstration of leadership quoting "iTunes & app annie download rank of property apps in NZ". The source of this ranking data is App Annie which tracks the ranking of all iOS and Android apps. For the sake of relevance I have only examined the iPhone app download ranking as Trade Me Property does not have an Android app and the Realestate.co.nz iPad app has only just been launched.

The charts below show the past 12 months for the Trade Me Property iPhone app and the Realestate.co.nz iPhone app.

The Realestate.co.nz app is being downloaded at rate which consistently places it at around the 320th most popular app in NZ, whereas Trade Me Property app is further down the rankings at an average of 500th place.

These collective stats do provide (not that I was sceptical) a very clear demonstration that the battle for supremacy in the property portal space in NZ is actually not that clear cut and certainly in the past 4 months things have begin to change. I am not saying that Trade Me is wounded, but at the same time their is a clear demonstration that Realestate.co.nz is gaining. They do however need to make sure they attend to the detail, like for instance their version 2.0 of their iPhone app which was poorly tested before bugs were discovered which could have seriously undermined their credibility in that key space.

 


Realestate.co.nz releases a new version of it successful mobile app for iPhone

by Alistair Helm in ,


Update 2 April

This article was written on the 27th March based on the then Version 2.0.1 of the app. On the 1st April a Version 2.0.2 was released that has dealt to all of the issues in this post. 

I am pleased that the company was able to respond so speedily to these issues which I judged to be significant. Clearly the development team is passionate and responsive, it is just a pity that inadequate testing lead to the Version 2 and Version 2.0.1 release without user testing. My opinion of this app has always been positive as in my mind it remains the best app for the iPhone on the market.

************************

There is no doubt that Realestate.co.nz gained a significant advantage over Trade Me Property when it launched its iPhone app in November 2010. It would be another 2 years before Trade Me released their first dedicated iOS property app. That early advantage has been key to the brand’s development and appeal over these past 4 years.

So, more than 3 years after its initial launch and save for a couple of bug fixes and an upgrade to allow for synchronisation of favourites; Realestate has recently released a whole new Version 2 of its app and I have been naturally keen to try it out to assess the developments that have been implemented.

Quoting their own summation of the changes on the App store, the new app delivers these benefits:

As they also rightly point out one of the great new features is that there is now a true iPad version - something long overdue as Trade Me Property has been the only purpose designed iPad property app for nearly 2 years.

Mobile apps are critical for property portals as the trend is ever more focused to mobile usage when searching for property. In the US, UK and Australia, the leading portals attract well over half of all visitors via a mobile device, with the US portal Zillow claiming weekend mobile activity approaches 70% of traffic. With this as a backdrop, delivering the best user experience on the mobile platform is critical for any property portals. 

Sadly I have to report that Realestate.co.nz appears to have let itself down with this V2 in what appears to be a 1 step forward, 2 steps back release. Whether it is a case of a rushed release or inadequate testing, this version has some serious weaknesses. This could have very serious consequences on the brand and the business especially considering how competitive this portal space is today in NZ. (By the way, I have deliberately waited a couple of weeks after the initial release of V2 to write this review to ensure that if they had spotted these issues, then I was prepared to allow them time to correct these issues. In fact they have already released an update with V2.1 a couple of weeks after the V2.0, however as I see it and detail below there remain serious shortfalls).

Let me work my way through the features, benefits and my critique of the this app on the iPhone, I will leave the evaluation of the iPad for another article.

iPhone app

First impressions

The start up of the new app is in many ways cleaner and clearer than before. There is no home screen. Instead the first screen takes you immediately to a local map indexed to your location - great! exactly how the user wants to engage with mobile real estate “show my what’s for sale around me”. In the same way as before listings are signified by red pins with open homes and new listings using cleaner iOS7 icons than the prior flag icon - nice.

Untitled_2.png

Touching a listing pin shows the address exactly as before. However I continue to maintain that this is a missed opportunity as most other property apps bring up a thumbnail image of the property or some details in brief vital to make searching easier, as it avoids having to move through to the listing to validate the property, as ably demonstrated by the example from Realestate.com.au.

When you do go through to the listing you do get the same details page with the great image viewer as smooth as ever. Overall the format is certainly cleaner, very reflective of the iOS7 template.

On each listing the key tabs of Details, Inspection, Affordability and Agent are arranged neatly and carry out the same functionality as previously.

Another missed opportunity in my eyes though is the enquire service. With such extensive usage on the smart phone of this app, why could the enquire service not include a text message integration with the phone - certainly there is a cost associated with sending what may be thousands of texts, but the value would far outweigh the cost. The only option is to type in an email which does not pre-populate with your details as a default.

Map Search

Back to the map, and the first functionality change that frustrated me. In the original V1 version there was a clear ‘Refine” button which allowed you to filter your search on any chosen map area. At first viewing I found no refine button. Trial and error lead me to the search button which had the required filters. However upon making this necessary filter of beds, baths and price; I tap the search icon fully expecting to be taken back to the local map - no! I now get a map of the whole country filtered for my 3 beds, 2 baths $500,000 to $600,000 !!

This is a serious issue as all I wanted to do was refine my local search - I was after all doing a local search around me. After picking up my iPhone back from the corner of the room where I had thrown it… I thought to try the GPS location icon at the top of the screen and low and behold I am back to my local map. Why oh why do I have to jump through hoops now, to do what used to be so easy!!

2014-03-27_19_21_53_png.png

This experience really concerns me as one of the beautiful user experiences I liked with the original version was to effectively “fly around the country” seeking out what is for sale based on the map search - how can I now do this now, when if I want to refine my search, I end up looking at the  whole country?

After random trial and error sometime later I did notice that in the search options there is a filter that says ‘Current Map Location’ - but it is by no means easy to find hidden as it is under Regions! User testing would have highlighted this shortfall I am sure.

 

Search refinement

Another grumble in what I would have hoped would be an improved V2 of the app would be around the search filters of beds, baths and price. The ideal I would have thought would be to replicate search filters of the web on the mobile app - allowing for example to be able to search for properties having between 2 and 3 bedrooms. No - you can only choose 2+ on the app, which clearly gives you 2,3,4 and 5 bedroom houses. Also the website allows for 25 price segments, whereas the app you have to choose from just 16 - hardly a ‘mobile-first’ approach.

Synchronisation with Favourites

Some of these preceding issues may seem small and in someways they are, however the next one is a whopper. Where has the synchronisation between the web and mobile app gone if you have an iPhone 4 or 4S?

Simply put, the developers of this app clearly only tested on the iPhone 5 for as the screenshot below demonstrates the layout is optimised for the longer screen of the iPhone 5. On a 4 or 4S the bottom of the screen is cut off thereby effectively relegating owners of these models to a far inferior app! I thought that the V2.1 would fix this - but not happening. It’s like I can see where the function link is in the filter section but it looks to be hidden? 

Listing Search

Another significant failure of the app is the ability to search by listing number. The search function has a classic search box as in the original version to allow access to a single listing by entering a listing number, so allowing you want to look up details on a property having seen it in a newspaper or street sign. Try as you might (as I have done) it does not work. Worse still some listing numbers take you to other places in the world - try 013 and you end up in northern Holland, 0555 takes you to Pensacola in Alabama!

I did after a couple of tries notice this small text below the search box "Start Property ID with a #"! - how bizarre, this was not a requirement of the original version of the app, why now do I need to add a # to the ID number? - sadly this advice proved useless as adding the # did not aid searching - the search by ID number seems broken - please fix! 

The example below demonstrates the issue. Listing number BOT21586 is a 3 bedroom property for sale in Pakuranga, one of thousands of such properties for sale. Enter BOT21586 on the app and you get a notice "No location could be found", search #BOT21586 on the app and you get a notice "No listings with that number could be found" - but do a map search for 12 Elizabeth Street and the listing can be found on the app and the listing on the app has the listing number #BOT21586 !

Enough of the negatives I hear you cry! - so what can I praise ? - well the open home calendar sync is beautiful and super smooth. The open home times are laid out in a logical position and tapping the chosen time and adding it to your calendar is great. There you go.

Other than that and the above mentioned examples of issues, I still think this is a good app. I am just surprised and disappointed that the app does not seem to have been tested adequately.  In my opinion technical developments of this nature have to take a significant step forward and add features that enhance the experience. I would have to say that overall this version 2 is a case of form over function, of a desire to create an iOS7 look driven by the need for an iPad app which then spawned a iPhone app as a secondary outcome with many resulting issues.

It will be interesting to see if these issues are addressed in the coming months.

 

Disclaimer: I was formerly the CEO of Realestate.co.nz from 2006 to 2012. I now have no relationship with the company, nor with its competitor Trade Me Property. I have written this review as an impartial objective analyst and commentator on the real estate industry in NZ and overseas. In my current role I do advise and assist other property portals in other countries on strategy and operations and thereby judge that I am in a position to offer such a review, for no other reason than professional advice.