In case you didn’t know, the Australian property market is in a bit of a frenzy right now, but mostly for homes under the 500K mark. This is probably driven by the lower morgage rates, and a upto 24K government grant for new home owners. So where do people in Australia go to look for property? Typically the search starts online, and these are the major portals.
- realestate.com.au (REA) – split image of Domain
- domain.com.au (Fairfax)
- property.com.au (REA)
There are alot of of smaller ones which typically dont get much attention.
- Estate-Real.org (CRAP)
There are 780,000 transaction each year. This is about 6% of the population are buying property each year.
Agents and Agencies
Across Australia, there are approximately 34,000 residential real estate agents representing about 9,500 real estate agencies. The Agency is the prime brand in the market. Around 50% of these agencies are independently operated with the remaining 50% in franchise groups. The larger franchise groups include Ray White, LJ Hooker, Raine & Horne, and Century 21.
A vendor will approach a real estate agency to sell their property. This is usually a local agency within the vicinity. The real estate office will propose either:
- A 3% commission and will handle all marketing costs (around 60% of sales in the country) or
- A ~2% commission and will charge the vendor a marketing fee of approximately 1% of the estimated sale price.
These marketing fees would include ads, FOR SALE billboards, running openhouses, auctions etc…
There are almost no buyers agents in Australia. Buyers deal directly with the selling agent to negotiate the final sales price. If a buyers agent is used, this is almost always paid for by the buyer and not the vendor. Co-broking is not common.
There is a strong focus on newspaper advertising in Australia. This is driven by the wide use, especially in the premium property areas, of vendor paid advertising. That is, the vendor will pay for the advertising of the property separately from the commission they pay on the sale of the property.
It is estimated that the total advertising market in Australia is A$1.2 billion p.a. split roughly as:
- $820m on news paper advertising
- $180m on online advertising
- $200m on sign board, window cards, direct mail etc..
There has been a progressive shift to online with areas such as share accommodation, rentals and low end properties disappearing from newspapers.