Yesterday I attended the opening of this year’s Harcourts conference. This is the time of year which sees most of the major groups undertake their annual conferences, an opportunity to gather together their sales teams who are of course independent contractors.
This past year has been one of the toughest faced by this industry for as long as any of the long term players in this industry can ever remember. Volume sales of property have fallen over 25% in the past year and that on a base of a year ago which itself was down 27% – this means that the value of sales written in the past year by this industry was just $23 billion compared to $40 billion just 2 years ago.
With this backdrop many companies might have taken the decision to make cuts and adopt a resilient tone of pragmatism – not Harcourts!
As the leading real estate company in NZ with 180 offices the company demonstrated at their conference an overt sense of confidence and passion to succeed in today’s challenging market. The theme of the conference is “One team, Our time” – a reflection of the great adage “when the going gets tough .. the tough get going” – this is clearly a case of a company looking to invest and grow its market share in today’s market.
The fact is the performance of Harcourts is impressive. A New Zealand company tracing its roots back to 1888 when John Bateman Harcourt established a real estate and auctioneering company in Christchurch. Whilst the first century for the company was steady and cautious, the second has been anything but; especially in the past decade.
The company now boast 609 offices across 8 countries on 3 continents with South Africa and China recent developments. The company has an enviable record of sales performance with last year being the only year in recent history in which year-on-year sales slipped just 6% to $18.3 billion – not a bad performance when viewed against the state of most real estate markets around the world.
As now a truly international real estate company the profile and dynamic growth has elevated the company to be cited as one of the leading global companies in the industry by Stefan Swanepoel in his 2009 Real Estate Trends.
The success cited by Stefan was down to a combination of training and technology coupled with a focus on customer service to which at yesterday’s opening session should be added the challenge set by Mike Green the CEO for Harcourts International to be seen as a truthful and trustworthy company, a bold ambition within an industry renowned for issues of consumer confidence around a lack of transparency and reputation. But this company has a track record of driving innovation and cultural change.
Excuse my cynicism Alistair, but they’ve also ridden the coat-tails of the greatest bubble we have ever seen, so we might want to temper our cheerleading somewhat. I can’t really see how we can call Harcourts harbingers of “innovation and cultural change.”
Great to hear about successful companies that use technology in a smart way.
“The success .. was down to a combination of training and technology coupled with a focus on customer service…”
Congrats to Harcourts, they are forward thinking and tech savvy.
J.C.
I think the point here is that Harcourts have grown share in these challenging times – that is not ridding coat tails.
I think the innovation and cultural change is as much a challenge to them to show the public and their competitors that they can deliver – time will tell
And are these change leaders even on Trade Me yet?
Lance,
A good question and one with a short and long answer – No they are not listing all of their clients properties on Trade me property.
Why? – because this organisation analyses and evaluates the best marketing tools for their clients and then presents the options for their clients, an in terms of online marketing their recommendation to clients is as follows:
1. Realestate.co.nz – the most comprehensive single property portal in NZ – 95% of all listings by real estate agents are featured, the site receives 370,000 unique browsers per month with over 120,000 of these from overseas. This single portal provides the most comprehensive source of real estate – test it on Google which is were the majority of real estate searches start – type in “property in …” on Google NZ.
2. Harcourts.co.nz – the number one company website with over 160,000 unique browsers per month, close to double the web traffic of any other company website.
3. Google adwords – the opportunity to promote property online with pinpoint accuracy and cost effective visitor traffic.
Harcourts have never used Trade me property for all of their listings, they are not alone. At this time realestate.co.nz would have over 20,000 more listings than trade me property. As well there are over 200,000 unique browsers a month who go to realestate.co.nz who do not visit trade me property. (these are all Nielsen Stats)
Harcourts judge that their clients properties would not be presented in the best manner on a website that focuses on second hand goods auctions after all do real estate agents in Australia or US use eBay? – certainly not. Harcourts have adopted this strategy and it has not effected their market share – their share is growing.
I would judge that Trade me is not the sole answer to advertising anything in NZ – just look at jobs, Seek is still the number 1 jobs website – some high value items like jobs and houses may not long term fit the image and profile of trade me – cars, beds, shoes, CD’s and mobile phone – certainly core for Trade me.
Trade me has the most rental properties.
Sam
You are certainly right, trade me at this time have c. 12,500 vs realestate.co.nz with 7,129. Trade me property has private landlords advertising rental properties that our site does not offer.
Alistair what happed to the “search by map” option on the website? I’m guessing it was hardly used so forth was little point in maintaining it?
Matthew,
Very observant – it is undergoing renovation. The fact is in the midst of other developments and upgrades to the site some of the functionality did not work as it should have done so we have temporarily removed it to later re-release it bigger and better!
Alistair (and Harcourts)
Realestate.co.nz had 354,357 UB’s in April, of which 145,000 odd also went to Trade Me. Another 621,080 went to Trade Me and not to Realestate.co.nz.
Harcourts.co.nz had 161,891 UB’s in April, of which 83,500 also went to Trade Me. Another 679,945 went to Trade Me and not to Harcourts.
These are total traffic figures- I should have used domestic, but actually from memory the total numbers make realestate.co.nz look better. I would say though that the impact of those overseas browsers is pretty minimal – after all how many houses are sold each month to overseas buyers?
While UB’s are over-counted (e.g. I have multiple browsers and computers so count many times) this is still a pretty compelling market that Harcourts misses out on. There must be more to it.
And there is – Realestate.co.nz is partially owned by Harcourts, and the Harcourts CEO is the chairman of Realestate.co.nz. Isn’t this a more likely reason for them not to list on Trade Me?
Almost every other real estate agency on Realestate.co.nz is on Trade Me. The last hold outs were/are the shareholders in Realestate.co.nz.
I have no problem with Harcourts holding out, but the reasons are clear, and they are not based on statistics but on ownership.
There are 365 Harcourts listings on Trade Me right now – placed, I understand, by individual agents. If I were a Harcourts agent I’d be pretty annoyed that 600,000 Kiwis were not able to view my listings, and I can understand why they would do an end-run behind the corporate policy.
Meanwhile Barfoot’s have over 2000 listings on Trade Me. Do we think that Harcourts are looking at Barfoot’s recent success in Auckland and wondering just how much of that relates to their presence on Trade Me? Remember that Trade Me attracts sellers, not just buyers.
Actually I’d love to see a chart of sales by agency versus number of listings that month on each of the sites. It would make interesting reading for the entire industry. I suspect you’d better be on both main sites to maximise your chances of a sale.
I do believe there is a place for both Trade Me and realestate.co.nz, but if Harcourts are really scathingly positioning Trade Me as a 2nd hand goods market then they show a very poor awareness of what exactly Trade Me is to Kiwis.
eBay is a poor cousin to Trade Me – they never figured out how to do Motors or Property, and certainly not Jobs. In Australia the market for cars is pretty fragmented, but is mainly on independent listing sites. Similarly the market for property is all over the place, without one dominant player (it varies by region and realestate.com.au is pretty good).
Not only are 40% odd of Trade Me’s items on sale new, but Trade Me is the marketplace for cars and bikes (due to poor online competition back in the day), getting close to the same for property (where realestate.co.nz is good competition), and still in progress for Jobs (where Seek was a very strong incumbent).
As an aside (and red herring) – what happens to the other 5% of real estate agent listings that are not on realestate.co.nz? Are they listed anywhere?
isn’t this fun…
Congratulations to Harcourts, they always put on a good do and have a good crew as well – good on them
I hate Trade Me (and everything Fairfax).
They are gobbling up all strategic niche publishing area’s online (auctions, travel, real estate and jobs).
They are like Google and they ARE evil.
I think its great Harcourts are standing up to them (only because its not my business – reneging must be costing them in the pocket i would think).
Lance,
As ever I appreciate the opportunity of a blog to create transparency and open up the debate. Additionally it ensures accuracy of information to be presented, in this regard there are some inaccuracies in your comments which I would like to correct.
1. The CEO of Harcourts (Bryan Thomson) is a Director of Realestate.co.nz – he is not the Chairman. The Chairman is an independent appointee – Jeff Davidson.
2. Harcourts (the franchisor company) is a shareholder in a company called Property Page (NZ) Ltd – that company owns 50% of the shares in Realestate.co.nz Ltd. Therefore Harcourts does not own shares in Realestate.co.nz Ltd.
3. It is not factually correct to say that almost all of the other real estate companies are on trade me. I naturally know all of 1,147 offices that subscribe to realestate.co.nz – there are within that set a good number that do not subscribe to trade me. At the last count Trade me property had around 57,000 listings of residential property (including private listings) by comparison realestate.co.nz has around 75,000 listings with no private listings.
An important piece of understanding is that Harcourts is not a customer of realestate.co.nz due to the fact that it is a franchise operation. Harcourts as the franchisor believes that the company is best represented by realestate.co.nz and their own site – they judge the long impact of not having an industry owned site will have a detrimental effect on the long term media costs. Therefore each office / group makes a decision as a franchisee whether to sign up to realestate.co.nz and / or to trade me property. This is exactly as is the case for Ray White and LJ Hooker etc.
Whilst I cannot be certain from discussions the 365 Harcourts listings on Trade me are actually not in main listed by their salespeople but by property owners.
As to the 5% of offices that are not subscribers of realestate.co.nz – in the main they are small offices, some of which actually do not see value in the web!
As a final point there is no compelling statistic to say that those people on Trade me property that do not visit realestate.co.nz or likewise the other way around are anything but casual browsers – the key data is that at any one time there are only around 28,000 people in NZ looking to buy property – the other 600,000 merely love looking at property.
Lance,
As a final point I am not sure of the data you seem to refer to that says Barfoot & Thompson is having success in Auckland and how that may be tied to trade me – can you please clarify the source of this information.
Hi Alistair
Your recent blog post (and emails from Barfoot) point to them having good success in Auckland. Also Barfoot’s Aaron Cook’s last email stated “Barfoots Market Share in Auckland has increased to 37%” .
I understand that Barfoot have also been maintaining advertising spend across the board in Auckland – whatever the reason they are doing well.