Archive for August, 2008

What does online visitor duplication mean?

I was asked the question the other day by a real estate office – “so what is all this stuff about duplication of visitors across real estate websites?”

The question was prompted by a fact sheet distributed to the office showing that in the month of July the website of allrealestate.co.nz had 166,280 property seekers who visited their site and did not visit realestate.co.nz, together with 58,913 who visited both sites. The particular document with this information is available to review here.

The figures represented in this document are correct – however seen in isolation they can be misleading. It is best to see the same result for realestate.co.nz and then you begin to see the true picture. The diagram below highlights this.

In July based purely on domestic web traffic realestate.co.nz had 135,511 unique browser visits and allrealestate.co.nz had 69,751unique browser visits- there was a group of 46,166 browsers who visited both sites. Equally the figures when you include international visitors are respectively 233,565 for realestate.co.nz; 166,280 for allrealestate.co.nz and 58,913 visiting both.

The key fact that as a real estate professional you need to know is how many active buyers there are – now in NZ there are only ever around 35,000 active buyers in the market at anyone time and the reality is these buyers visit many websites and may well end up looking at both of these sites; that is why the number of duplicates at 46,166 is larger than this core group of 35,000.

The other key fact is that at anyone time there are thousands of people looking at websites for which they have no real interest – real estate is no exception. That is why there will always be a small relative overlap. The fact is that to say that you need one website because they can deliver property seekers that another one does not deliver, is not completely true as this group outside of the duplicate group more-than-likely are not actually property seekers, but just casual web browsers.

Finally another way of presenting these statistics is shown below. In the month of July of the 181,677 visitors to realestate.co.nz from within NZ – just 25% also went to allrealestate.co.nz, whereas of the 115,917 total NZ visitors to allrealestate.co.nz – 40% had already checked out realestate.co.nz.

I think that better explains overlap of audience.

August 29 2008 | Market stats | No Comments »

Real Estate market shows early spring buds!

The latest sales report for July issued this week by REINZ reflected what was clearly being talked about around the country by agents who are close to the business – transactions were being made, property has been selling and interest from buyers is clearly there.

The graph below tracks the annualised sales, together with the annualised value of the residential market since 1993, whilst on first glance its shows a bleak position, there are good signs.

Estimated total transactions for 2008 look to be around the 60,000 to 70,000 properties – pretty much the level of sales a decade ago. The sharp decline in sales which started almost a year ago is likely to be behind us as we head into the spring. As for prices the median price for July showed no change and this was reflected in the July figures published for Barfoot & Thompson for the Auckland region which shows that despite the media hype we are not as yet (and may in fact not) witnessing catastrophic property price falls across the board.

The sales statistics reflects the transactions undertaken in July, based on buyer interest in May and June, the beauty of the web is that information is available on today’s market now. This data can provide a key pointer to where the market is likely to head in the next quarter. The level of web traffic across all real estate websites remains pretty stable at or slightly ahead of last year as shown by the red line on the graph below.

What I think is very interesting and potentially far more exciting for this coming spring is the level of email enquiry from realestate.co.nz. I have analysed the statistics of the number of emails we sent to agents over the past 2 years and plotted it on the graph below.

What this shows is that on an indexed basis the level of email enquiries being generated from the website started to pick up in late May and has accelerated enormously since then to a level far above the relative level of enquiry last year, this I feel is a great indicator of growing interest in the property market again. Let’s hope these enquiries that you are receiving turn into valuable leads and sales – this is a really important time to make sure you are getting these emails, we send on average up to a thousand emails to agents everyday – have you had one this week?

August 14 2008 | Market stats | 4 Comments »

Market contraction – we are all suffering

I got an email the other day from one our subscribing offices asking me a direct question – are you losing customers?

The short answer is yes! – the second answer as to are we losing market share is no!

The fact is that over the past 6 months our subscriber base has shrunk quite considerably. This was something that we foresaw earlier in the year. It is the result of the market contraction. At a rough estimate we probably have already seen nearly 80 offices close in this period – this is what has been for us a loss of customers rather than un-subscribers. At the same time we have added somewhere around a dozen new office subscribers, so the net result is that we are increasing our share of listings as can be seen from the website – we currently have 106,000 listings, by far and away the most comprehensive selection of listings across the industry.

This industry is undergoing a radical shake down as the sales of property this year will be around 65,000 as opposed to the 100,000 last year and the peak of nearly 120,000 a few years ago, clearly with this level of reduced business sustaining an industry with over 1,450 offices and over 17,000 sales people could not continue. I think by the end of the year closer to 1,200 offices will be operating with around 12,000 salespeople – that is a significant reduction. The licensing board and REINZ currently do not track these figures on the basis of active offices. Data of licences are really only ever analysed at renewal time in April.

This is a difficult time and pressure on margins and cashflow is serious. My comment and advice would be in seeking cost savings don’t look at the web as expendable – it is not. The web is an indispensible part of your marketing – it is now the most valued source of information by buyers and sellers and reducing your investment would be potentially far more damaging to your business than say reducing some of your print advertising.

A this time I would seek to maintain your continued support – we rely on the financial support of this industry – we have no “deep pocketed” media barons to fund us through tough times so we need to secure continued commitment and subscription, after all we are here to do just one thing – provide you with the best tool to help you sell property.

August 14 2008 | News | 1 Comment »

Commercial property for sale or lease on the web

I am conscious that we focus very heavily in this email and other general discussions on residential property – I am acutely aware that we are here with a website to support the whole real estate industry.

I wanted to share some key information with you in regard to the commercial property side of the site. In terms of content the high representation of content from the industry is reflected well in this category with the majority of major commercial agencies using the site – this has grown in the past year with some notable new subscribers. As a result and also as a function of the market the content of commercial listings on the website has rocketed up from just over 8,000 18 months ago to now stand at 15,000 – the most comprehensive stock of listings on any real estate website for commercial property in NZ.

Not only does our site offer rich content it draws a large audience of close to 13,000 unique browsers per month. Look at these statistics comparing the commercial section of realestate.co.nz with our competitor realcommercial.co.nz. Realestate.co.nz offers your listings twice the exposure and twice the duration of visitors to these listings.

Ammendment made 15 August

As per the comment from Glen below I have added the following key information to provide complete transparency.

  1. The data reported above in the bar chart of unique browsers and Total time is based on comparable audited data from Nielsen Online
  2. The data relates to domestic NZ traffic only – this is a consistency I use in all market information as the primary appeal for our commercial customers is domestic traffic
  3. The data for realestate.co.nz Commercial listings comes from Nielsen Online Site Census which is an internal analysis which we subscribe to and is internal data
  4. The data for international traffic of UB in July was as follows:
    • Realestate.co.nz Commercial listings 2,238 adding to the domestic of 13,045 to give a total of 15,283
    • Realcommercial international¬† 3,231adding to the domestic of 7,045 to give a total of 10,276
  5. As has been highlighted in the other comment realcommercial.co.nz also includes business listings, so to provide a true like for like comparison the data for traffic to business listings on realestate.co.nz in July was 4,247 UB in total with of these 876 international visitors. Therefore in total for business and commercial listings relaestate.co.nz delivered 19,530 UB in total in July vs. realcommercial.co.nz at 10,276

August 14 2008 | Market stats and Nielsen Online stats | 5 Comments »

Yet another website – promising the world!

I received this letter the other day (as I know a lot of others in this industry have done) from a company called “Get Leased” – now you have got to laugh! – they think that I would sign up !! – great bit of direct marketing??

Anyway their claim is interesting:

A new independent website specialising in commercial and residential properties for lease or rent. It is the only online marketplace designed to meet the specific needs of real estate agencies, property management companies and private landlords seeking tenants for premises.

Now I am all for competition – competition is healthy and ensures innovation is brought to the market as well as keeping costs at a market competitive rate. What I cannot understand is why people in this industry believe in what almost amounts to a “lemming like” behaviour that a new website somehow has to be another valuable place for their listings.

Lets look at this new websites offer:

  1. Do they have any viewers? – no! – they are not advertising either offline or online (try a Google search for commercial property or property for rent – after page 10 give up they don’t appear)
  2. Do they want to make money off of your company? – yes! -$100 per month for 50 listings, and then in multiples of 50 listings
  3. Does it represent value? – no! – how can it they have no audience and they charge $100 per month for 50 listings. Realestate.co.nz charges $200 per month for an unlimited number of listings – and has a regular audience of 270,000 unique visitors per month!

I am sorry but I get incensed when I see real estate offices sign up to these sites – an they are, just search on the site and you find companies advertising their listings – who do they think will see them!!

The web has become a massive, complex medium – every website, let alone a listing is like a single grain of sand on the beach – no body will find it unless it is part of a site that has an audience – 100 grains of sand are just that 100 grains of sand scattered on the beach.

Please – I know because you are reading this you will be smarter than to fall for this opportunistic business being offered through an anonymous letter, don’t believe that money you save from cutting back newspaper adverts should be spent of more websites – invest your money wisely and ask what can this marketing do and what will I get!

Updated 22 August

I have today received a follow up letter from Terry Kearns of Getleased. I have attached the letter here as a reference. Naturally and respectfully Terry takes me to task on a couple of my comments in my original post. I am keen to answer those issues and choose to detail them here in an open and transaprent manner to which others (inc Terry) can add their comments:

1. The letter is disappointed that I chose to use the phrase “opportunistic business” sighting that the website is the “result of many years working with real estate and the culmination of five years design and development work..” I stick to my opinion that the site is an opportunistic business; the judgment is that with the benefit of 5 years planning this website could have had a massive lead on the current key players in the market if it had launched 5 years ago. If the past 5 years have been spent on development, I would respectfully question the chosen technology provider as websites are today a commodity able to be developed in weeks rather than years. The whole realestate.co.nz website was a 4 months end-to-end project. I therefore submit that the site is an opportunistic development reflective of an ever growing proliferation of new websites starting for all types of real estate almost every other week.

2. The letter challenges the use of the phrase “anonymous letter” in the context of the letter I received. I concede that a better chosen word could have been “poorly targeted” as my name and company was clearly bought and used “unfiltered” from a mailing list as clearly we would be the last company likely to subscribe to getleased. The letter then goes on to imply that my comments were akin to an “overdone Nigerian scam” – these are the chosen word of the author, not my words – I certainly have a much higher regard and respect for competitors than to liken their tactics to such an illegal and immoral scam. I did (as you will see from the original post above) detail my respect for healthy competition.

3. As a final comment and one not addressed in the letter to me, but something I have noticed on the letterhead. The author uses the phrase “your independent website for commercial lease premises and residential rental properties” – I am confused – what is an independent website? – and by inference what is a website that is not independent?

Are not all websites independent, or is by some inference realestate.co.nz because it is owned by the real estate industry somehow not independent?

Anyway as ever I am always keen and open to discuss this matter through comments on this blog post – that way a fair and balanced opinion can be fostered as to the merits of one website vs another. I concede that there is much to be learned and innovative new entrants into a market can be a valuable addition to the customers in the market.

August 07 2008 | Competitive activity and News | 3 Comments »

Stefan shares his thoughts on the Australian and NZ market

Following the very successful visit of Stefan Swanepoel last month, from which we have received excellent feedback. It is very interesting to read this post by Stefan to his US community regarding his observations on the real estate market in NZ and Australia.

Real Estate News from New Zealand and Australia

By Stefan Swanepoel
This week I am in New Zealand and Australia giving talks in both Auckland and Brisbane to various different local real estate technology companies, a leading real estate brokerage and a large real estate association.

Similar to our real estate market their market also experienced a strong surge in property prices during the period from 2002 to 2007 but, although not caught in the subprime mess of the USA, they could not escape the resulting global hangover. That coupled with the rising price of oil and “Downunder” is also feeling the pain of a poor real estate market. Their market is currently experiencing a significant and dramatic decline in sales with March numbers down approximately 50% in New Zealand.

As Australia is much larger in size and thus more diverse, the declines vary depending on the state. The overall market is definitely slowing to the same extent as New Zealand – the following provides you a snap shot of what’s happening:

  • Queensland – sales numbers down 30%
  • New South Wales – slow, no real change the last 18-24 months
  • Victoria – sales numbers down 25%
  • South Australia – sales numbers up 20%
  • Tasmania – sales numbers down 15%
  • Western Australia – sales numbers down 50%

Similar to the initial stages we experienced in the U.S., the pressure is on prices to decline but many sellers are still holding out, so no major reductions; yet. Although not significant, nor expected to become as significant as in the U.S., foreclosures are also slowly on the rise. As is the case here, the general mood in New Zealand and Australia is fairly gloomy.

What is interesting is that the utilization of the Web by the public in Australia and New Zealand is amongst the highest in the developed world. It’s this global down market phenomenon and the surging usage of the web that is going to be the catalyst to re-engineer the real estate brokerage industry.

For those who have not been “Downunder” – neither country has a MLS (multiple listing system) so the influence of the web and its use for the marketing of houses, has a different dynamic than in the U.S. Both countries however do have a powerful, national real estate portal that is focussed and drives significant traffic to their websites and basically functions as a national MLS. The two sites also have similar names although owned by different entities: www.realestate.co.nz in New Zealand and www.realestate.com.au in Australia

Watch these two countries carefully, as in some cases they may actually leap-frog the U.S. and lead the way with respect to web-based real estate innovation.

August 05 2008 | Uncategorized | No Comments »