A City analyst says the long-term effect of OnTheMarket may be neutral' for estate agents even if it takes over as number two portal - but the real 'threat' is from online agencies.
Jasper Lawler, market analyst at CMC Markets, says if the trend of agents moving to OnTheMarket continues to be primarily from Zoopla, the new portal could take over as the second largest to the seemingly-invincible Rightmove.
But he warns that one key to OTM's success so far - its one-other-portal policy - may have to stop if it is found to be illegal by the Competition and Markets Authority.
He says: Whether Zoopla or OnTheMarket comes out on top, it still means a duopolistic market with Rightmove and could be a fairly neutral result for estate agents.
However, Lawler says Zoopla is responding behind the scenes. In a briefing to CMC's investor clients, who operate in 100 countries, he says Zoopla has made 11 acquisitions to consolidate the classified ads market and in doing so has removed some of the pricing competition that could have kept fees paid by agents down.
Lawler says that while agents are often unhappy at portal fees the sheer number of referrals produced and the reduced need for other advertising appears well worth the listing fees paid by agents to the portals.
He says the bigger long-term threat to the traditional estate agency model is what he calls the rising popularity of self-listing services and online-only estate agents such as Tepilo, Hatched and eMoov.
CTC is a trading platform for investors operating in traditional investments, foreign exchange and spread betting.
Over the weekend The Guardian newspaper road-tested Rightmove, Zoopla and OnTheMarket.
Its personal finance editor Patrick Collinson wrote that OnTheMarket is already having a striking impact. For example, in Harrogate, Zoopla was this week listing only 138 properties compared with 343 on OnTheMarket, and 529 on Rightmove. But in Exeter, OnTheMarket could only muster 171 properties compared with 719 for Zoopla and 726 for Rightmove.
He continued: In some parts of the country OnTheMarket is virtually invisible, such as Bury in Greater Manchester and Dundee, where we found it listing a tiny fraction of the properties available on the other sites. But in one location, Aberystwyth, OnTheMarket had more properties than either of the other two. Zoopla points out that sites may use different definitions of a town area, which will affect the listing numbers.
Meanwhile Zoopla claims its mobile traffic is up 40 per cent so far this year compared to the same period in 2014.
The portal does not give any overall figures but the increase comes despite its 20 per cent drop in estate agency branches.
Zoopla also says its appraisal tool, which allows prospective vendors to contact agents to arrange valuations, has delivered a record 45,000 enquiries during the first two months of the year.
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Comments
PS. A date for the diary - Zoopla's 2015 H1 results released on the 20th May. It will be interesting to see what the markets make of annual revenue of around 10m being wiped off the sheet post OTM launch.
A quick bash on the calculator tells me that Easy Property need to either drastically increase their listings, or start charging each landlord just under 3k to hit the projected income figures in their prospectus. My money is they go under before they "float at the end of the year". (Note to people with a spare few pounds - beware of the actual value of companies using crowd funding websites!!!) I've been in the business since the internet and agency became intertwined, and online agency has been a near constant since that point. [u]Put simply, vendors & landlords who use half decent agents, achieve far higher prices. Until online agents learn to automate good negotiation, they will fail time and time again. [/u]
High Street Agents are used to challenges from market conditions, the web, competitors, corporate millions propping up chains etc. Theyll adapt but will still be there in the years to come.
Inclined to agree with you here. The problem is, the research so far has been for consumers so they're not going to look into how much it costs per lead when unfortunately, as agents, that's what we really need to know!
Hmm... Online agents are the 'danger' only because of the portals allow them to be. It's got nothing to do with high street agents being WAYYYY more expensive then - pull the other one. People are shifting to Aldi and Lidl they are cheaper, even though they loose some on the shelf choice.
Hmm... Online agents are the 'danger' only because of the portals allow them to be. It's got nothing to do with high street agents being WAYYYY more expensive then - pull the other one. People are shifting to Aldi and Lidl they are cheaper, even though they loose some on the shelf choice.
Online agents are the 'danger' only because of the portals allow them to be. That being said, i'd like to know how many agencies in the country have so far been seriously affected by the apparent surge in online listing companies Have any high street agents actually closed down due to competition from Emoov and co Have any agencies seen their listings noticeably reduced
Seriously, these constant warnings from analysts and online agency chiefs (one name in particular annoyingly springs to mind) are getting rather stale now. I always thought it would be interesting to fall asleep, wake up in 5 years time and drive around my home town to see how the agency boards may have changed. Would I still see all the established local names or would I be surrounded by a clutter of tacky purple boards or boards adorned with the face of Ms Beeny
Nobody can know for sure, but one thing I am sure of is that these articles are wearing thin.
I have just checked our core area G12 in Glasgow
RM 92
OTM 76
Z 26
S1 H 48
Its easy to see that there are still some agents using S1 homes whilst OTM too.
I dont know if OTM will succeed, all I know is that people do not change their habits easily and of all the people I have asked including friends and family in England (some of which are house hunting) they have never heard of OTM!
One analyst is saying OTM COULD be numbr 2 but this remains to be seen, and I have to agree that online agents are a huge threat to traditional estate agents.
I'm surprised all the attention and comments seem to relate solely to numbers without reference to price ranges.
I believe it's the higher priced properties which are being removed from Zoopla which indicates it will continue but will serve a different market.
A quick spot check this morning on my area in Somerset
BA5 - within 10 miles.- minimum price 500,000
Rightmove 476 properties On the market 354 Zoopla 50
As the public become aware certain property types are not available on zoopla they'll move to On the market or Rightmove.
If properties are held back for a few days from Rightmove - OTM becomes the go-to site.
It's up to agents to decide where they see the best and most economic marketing options.
And here is the first analyst that states that OTM could become number 2 as opposed to all the other reports which states that OTM will be a short term thing.
The ride has turntable it appears. id start to be worried if I owned Zoopla shares.