Online Estate agents go from 2.5% of market share to over 5% in two years – Rightmove
The property and technology worlds collided in the heart of London for the Future Property Tech conference, held yesterday.
EYE’s new Proptech editor (me!) was on hand to report on the day’s proceedings and highlight any interesting technology.
The day was kicked off with a panel discussion about deals within Proptech and the head of steam the industry has been gaining.
Headlining the panel was Charlie Wade of VTS, a US Proptech company which recently launched in the UK thanks to raising a mammoth $55m.
Google were up next with a whirlwind tour of how they are baking technology into our phones.
The example which had the crowd gasping was viewing a restaurant menu through the phone’s camera lens, and seeing the app replace the English words with French.
This technology is related to virtual reality and is called augmented reality, where you can see the world around you and computers can add images into your vision that help.
For the property world, that could be seeing live property listings in your glasses as your walk past homes on your street.
When asked by the audience whether Google will try and build a property portal again, the speaker responded by referencing Google Compare which was designed to ‘disrupt’ comparison sites.
He said Google is “taking a backseat” as it didn’t work out so well and it therefore seems unlikely that Google will enter the property portal space again.
A question on whether Google will be inventing an AI to replace estate agents unfortunately went unanswered.
Other speakers through the day included Eyal Malinger of Countrywide, who said his firm is sometimes known as the “best kept secret in the industry” which elicited laughter.
He spoke about wanting to “work with disruption” and said that “real innovative disruption cannot be stopped”.
Using the investment partnership with Fixflo as an example – which takes the pain of reporting repairs away for both tenants and landlords – he said Countrywide are looking for anything that “improves the productivity of our people and makes our customers happier”.
The undoubted main event was Miles Shipside of Rightmove.
Hosting a round table on what an estate agency might look like in the future, Shipside was a whirlwind of energy ensuring a wide variety of the audience got to speak.
Among the variety of views was EweMove Chief Glenn Ackroyd, saying 4-5% of people chose an estate agent based on price according to a Property Academy survey in 2013.
He highlighted that chains are where a local agent “earns their crust”, and are where an online estate agents “struggles to solve the pain”.
The conversation moved on to comparing the rise of online agents with conveyancing factories, which came in to disrupt their market.
The results were described as ending up with “some casualties, some mergers, but the conveyancing process is still way behind technology wise and needs fixing”.
Shipside went on to show data on Rightmove’s ‘Geographic Pricing Model’ for online estate agents, which now account for just over 5% of the market.
The graph on screen displayed that their market share was 2.5% in January 2014.
The Rightmove data on screen also included survey data of sellers of which 31% said they’d consider using an online estate agent, and 5% said they already have.
Russell Quirk of eMoov was quick to say “incumbents talk about online is only 5%, but if it’s doubled in two years, then where it could get to in 5-10 years, then I’d be a very happy individual.”
The next slide to pop up on the screen then burst the Emoov bubble by showing consumer awareness of online agents and whether they would consider using them: Purplebricks had 76% awareness to eMoov’s 32% and 19% of consumers said they’d consider using the former versus only 4% who would consider using Quirk’s business.
Rightmove said their interpretation of the research was “online brands struggling to convert that awareness into consideration.”
Iain White, a former agent with Romans, said: “all the models will work, if the offering is good. If what’s delivered is what was offered, then people will enjoy the choice.”
To add emphasis he described choice as “some people will want to sit on aisle, some by the window and other people will want to be strapped on the wing.”
He quickly raised the hackles of Adam Day of Hatched by saying, “Current online growth can’t continue as the spend isn’t sustainable at current profit levels.”
To which Day responded with “Sellers we (at Hatched) attract are more serious, as they’re paying up front so we achieve success on 65% of sales (as opposed to the widely touted 50% in the room.”
On the topic of price, Quirk gave us the gem that “Sellers want the agent to come and agree with them. It’s not a valuation, but a validation.”
Trevor Mealham of INEA did his best to talk everyone in the room into submitting to an INEA dominated future and was quickly told by Shipside that “Licensing? Not going to happen” when Mealham suggested licensing will come in within the next 2-3 years.
A French agent concurred by saying “licensed agents there (in France) are just as little trusted as here in the UK. Licensing is a red herring.”
The only mention of technology came from Eyal Malinger: “The risk is good agents becoming independent if given the technology to go solo.”
Another member of the audience called this the potential “Uberisation of estate agents” in reference to the surprising disruption of taxis by the ride-hailing app Uber.
And the conclusion?
Debbie Franklin of Andrews Property Group said she’d “been before” and that the event had “gathered momentum”.
She said while the “first session was boring”, she found “as the day’s gone on it’s been really good. The exhibition could be a bit bigger.”
She stated that while Andrews “previously haven’t thought of investing in things, if there’d been a few more stands it would have been more informative and visual. You don’t know who these startups are and those who aren’t good at promoting themselves could have a good solution for us.”
As the day ended, I felt a sense of anti-climax: I looked but didn’t come across any technology that would disrupt or enable agents so that consumers would get a better service.
Here’s hoping the massive amount of people who attended this well run event are inspired to invent that better future.
(Source Property Industry Eye)
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