Not sure how successful this would be but guess they're big enough

Ray White’s secret plan to sell more homes off-market

One of Australia’s biggest real estate groups has been secretly experimenting with putting more properties up for sale off-market for almost a week, before listing them on the major property portals such as Domain and realestate.com.au.

Ray White, an agency group representing almost 15 per cent of properties sold in Australia and New Zealand, has been trialling a new tech product to list upcoming homes for sale on its own websites in several affluent Sydney suburbs for five days before they are listed on the portals.

The move demonstrates how agents are exploring ways to reduce their reliance on the property listings giants, which have a combined market capitalisation of $33 billion and have hiked prices to list by as much as 5000 per cent in the past 15 years. It cost $75 to put a home on realestate.com.au back in 2009 – it’s now as much as $6000, depending on the suburb.

Selling properties off-market can save vendors thousands of dollars, but comes with the risk of missing interested buyers who might have bid the price higher. Typically, vendors may choose to try to sell off-market to save money, allowing agents to send properties to their own database of potential buyers and buyer’s agents.

“It’s a long-standing agency practice to market directly to buyer databases with previews, new listing alerts or buyer matches ahead of portal campaigns,” Ray White managing director Dan White said.

Now, Ray White is developing its own tech to market properties. It spent $3 million to buy a 50 per cent interest in proptech platform NurtureCloud in 2020, which it uses to target an evolving list of potential buyers.

“We are developing a new platform to enable agents to alert buyers of new listings coming to market soon,” White said. Known as Uplist, it lets agents upload details and basic photos of new listings up to a week before they’re ready to go live. The group is trialling the product on Sydney’s upper north shore.

Ray White managing director Dan White. The group is trialling tech which makes it easier for agents to market new properties to their buyer lists before advertising them on the big property listings portals.  Peter Wallis

Ray White’s move risks pushing even more properties off the major platforms. Last month, private subscription platform Quiet List released an analysis of Sydney real estate sales in 2024, revealing that one in five sold off-market.

Competition between the property portals for listings is intense. REA’s realestate.com.au is by far the biggest platform, a dominance that has drawn regulator interest for its pricing practices.

REA now faces a powerful new competitor after US property conglomerate CoStar Group bought second-placed Domain for around $3 billion earlier this year. CoStar Group chief executive Andy Florance has pointed to new 3D internal mapping technology and faster website load times as ways to improve Domain’s audience in Australia.

But while the portals compete on price and introduce new products, agents themselves are increasingly trying not to be entirely reliant on platforms that can increase subscription fees by 110 per cent in a single year.

“Technology is such that it’s getting easier for agents to get traction outside of the portals than it used to be,” Real Estate Institute of Australia chief executive Leanne Pilkington said. “Advertising is so expensive, agents are always testing to see how they can save their clients money and still get a great result.”

An interesting appointment to say the least. Ostensibly good fit of course.

Cameron McIntyre appointed Chief Executive Officer of REA Group Ltd

The Board of REA Group Ltd (ASX:REA) is pleased to announce the appointment of

Cameron McIntyre as Chief Executive Officer (CEO) of REA Group with effect from 3

November 2025. Mr McIntyre will succeed Owen Wilson who, as announced in February

this year, has chosen to retire from full time executive roles.

Mr McIntyre is a highly regarded leader with an exceptional track record of delivery in

digital marketplace businesses across domestic and international markets. He has been

Managing Director and CEO of CAR Group Limited for the last nine years, during which

time the group has seen significant expansion, growing to become over six times larger

while delivering excellent shareholder returns.

REA Group Chairman, Hamish McLennan said: “We are delighted to announce Cam’s

appointment, following a comprehensive global search. His proven calibre and unique

experience, including a deep understanding of, and success in, a business that has much

in common with REA, make him the ideal person to build on REA’s strong momentum and

lead its next phase of growth.

“Having led the growth and transformation of CAR Group’s business, Cam has a wealth of

experience in successfully leading a thriving global digital business. He has consistently

executed strategies that enhance value for customers while breaking new ground to

improve the consumer journey. His track record of driving high performance and his

commitment to leading the growth and development of teams also demonstrate a clear

alignment with REA’s values.”

Mr McIntyre said: “I’m thrilled to be joining REA Group. This is an inspiring and iconic

business that I’ve long admired and whose products I’ve observed and used extensively

for many years. REA has outstanding market leading brands, a talented team, an

incredible culture and a lot of growth potential.

“Its culture of innovation and investment is renowned and I’m looking forward to working

with the Board and the team to continue delivering growing value for REA’s customers,

frictionless and engaging experiences that enhance the property experience for

consumers, and excellent outcomes for shareholders.”

Mr Wilson has been with REA for almost 11 years, including over six years as CEO. He will

continue in his role as CEO until 31 October 2025 to ensure a smooth transition. After

finishing as CEO, we are pleased to announce that Mr Wilson will commence in the role of

Chair of REA India Pte. Ltd.

Mr McLennan recognised the contribution that Mr Wilson has made in his time at REA:

“Since announcing in February his intention to retire, Owen has continued to lead REA with

enthusiasm and dedication. We are extremely grateful to Owen for his commitment to REA

and the significant impact he has had in his leadership, first as CFO and then as CEO.

During Owen’s time at REA, the Company has achieved considerable growth and

transformed from an Australian property listing business to an international, diversified

business, and the renowned culture of REA has gone from strength to strength.”

Like most of suburban Australia, where I live there is a feral infestation of real estate agents. Saturday mornings are particularly bad with stupid wire signs poked into footpaths on every street corner directing you to the agent’s little kerfuffle called an “Open House”. Where in the front yard, beside the excessively large for sale sign is the real estate agent assistant. A young blonde chicky babe, clipboard in hand, immaculately made up, with her fulsome silicone breasts and nipples peeping from a tight black dress that extends to barely covering her arse, even in winter.  Any time a red-blooded Australian guy wanted what she has on overt display he would either talk sweetly to his spouse, go to a bar or visit the local brothel. Sex should not be confused with buying the family home.

Closer to the front door is the goon agent himself. A walking parody of what it means to be a good citizen. With shiny shoes, sports jacket and of course fashionably tieless to give an impression of friendly approachability. The cropped beard the product of many hours of lovingly looking at himself in the mirror. All togged up in a fantasy of his own importance. His immediate task is to hold open the front door and introduce himself. Like you actually want to know the prick. 

If asked anything technical or legal about the home his is selling, the response is inevitably that he is not sure, and you should speak to a building or legal expert. This is the only time you will hear him speak the truth. Truth delivered not out of moral character, but truth from ignorance. For he is typically dumb. 

On the kitchen benchtop will be the neat little piles of his printed real estate pornography. The stock in trade for the human pornographer is lingerie, deceptive camera angles, improbable storylines and shaved vaginas. For the real estate pornographer his improbable story lines starts with his fantasy sale price “guidance” and ends with feigned surprise to disappointed buyers when this is well exceeded.  And, of course for many, the connection between vaginas and real estate agents will be an obvious one.   

Like the human pornographer, the agent is soon sated and quickly moves on to his next vendor victim. And like the blackmailer of homosexuals of days past, the agent intimidates the vendor into the belief that only he can get the best price for the vendors property.  And the weird semi-consensual financial rape is repeated. Semi-consensual because the reluctant vendor is conditioned to believe there is no other option but to bend over and take it.   

Agents around Australia are typically charging commissions anywhere from 1.8% to 2.5% on the property sale price. The rate varies greatly in different parts of the country and of course you as a vendor are free to negotiate the terms with your agent. In Sydney the rates are typically 1.8% with advertising and marketing charges on top of this. With the Sydney median house price at around $1.3m, the agent sales commission is typically around $23,000.  On-line marketing businesses Realestate.com (ASX:REA) and Domain (ASX:DHG) appear to take an amount that is around 7 - 10% the size of this figure, depending the fee plan the agent is on. 

REA dominate the on-line real estate advertising having four times the visits to their sites as their nearest and only real competitor DHG.  On-line real estate advertising has become so ubiquitous that very few properties in Australia will go to market without using either REA or DHG.  Currently both REA and DHG deal exclusively through agents, and individuals cannot market your home using their websites.

Many see the key piece of the real estate marketing puzzle as not the agent, but the service provided by the likes of REA. As it says on the REA website: "When it comes to owning a property, knowledge is power". And over the last decade the public's access to that knowledge has hugely improved, both in absolute terms and relative to that available to the local real estate agent. in past years the local agent pretty much has had a lock on his local area as far as comparable sales knowledge, planning rules and general local knowledge. Information was, and still is his currency. however his currency has been severely devalued, with up-to-date sales data, planning information, comparable listings and much more all now readily available.

Buyers and sellers are no longer at the information disadvantage they once were. And REA with its on-line market dominance and trove of easily accessible information is at the center of this change 

Every day in Australia thousands of goods from antiques to livestock to cars are auctioned on line. The software is so ubiquitous and those buyers and sellers so accustomed to it, it is now just routine.  The savings for buyers and sellers not having to physically attend an auction site, and the reduction in sales friction is significant.

So why not real estate? You might argue doing so would remove the agent’s “salesmanship” and negotiation role and rob the vendor of the potential of gaining a higher price. This is just a nonsense argument as the “negotiation” is just replaced by on-line bidding, just like a physical auction.  Well, you say: what about all the other factors in a negotiation, like settlement date or what chattels might be included in the sale. Again this is either in the contract or can be put in and is reflected in the agreed price paid at an auction scenario. Or the software could easily allow for these non-dollar matters to be submitted to the vendor at the same time as the price is closed.  All this is not hard.  And yes, a person to open and lock up the house on inspection day would still be required. However he or she could be engaged on more favourable financial terms in accordance with the Door Openers Award. And if anyone is worried about the goon agent becoming unemployed, he or she could take up more honest alternate employment like selling used cars. 

REA as the leader in this field is doing just fine out of the system as it exists now. It is after all a $31b market cap company and has 5X in the last decade. REA would well understand awaiting them at some point is a larger share of commission pie by eliminating the agent from the sales process. Surely it will only likely be a matter of time before REA takes on the agents.    I suspect most vendors would be happy to pay REA double or more what REA currently charge agents to eliminate the cost inefficiencies of using agents.    

Around forty years ago the public were thoroughly brain-washed into believing that only a university qualified solicitor had the knowledge and skills undertake the weighty task of a real estate conveyance. Well, we all eventually worked out the High Priest of conveyancing was not the lawyer, but a cluey 35 year old mum in the back office. The job of conveyancing for her was just a means to put food on the table. And she went home from a day at the solicitor’s office, cooked dinner for her kids and useless husband and then worked well into the evening to make a life for her family.  And eventually the jig was up for the lawyers. The legislation was changed and quickly Conveyancers were in every suburb. Real estate transaction costs plummeted and society was better for it. 

Bank Managers, once gatekeepers of home finance and the after-hours kings of the local golf club, have in a similar way been relegated to irrelevance. In their case by regulatory change and mortgage brokers.

There are of course smaller on-line competitors out there like “forsalebyowner”, but real industry change needs the heft of the lead player, REA. And REA has the right culture to do it, given they are 61% owned by News Corp (ASX:NWS) who have a history of market disruption going back 70 years to its origins in Adelaide.  Maybe not a task for the ancient Rupert Murdoch, but you would think breaking apart the Australian real estate agent cartel is not beyond REA and NWS.  

It is not often that Australians would cheer for corporate Australia, let alone a company controlled by a Murdoch.  However, assuming at some point in the future a REA CEO has the courage and strength to initiate the above change, then a grateful population will erect their statue in Centennial Park. Beneath their stone effigy will be chiseled in granite: “This single individual did the more to reduce the price of real estate in Australia than any government policy or politician, and so saved Australian households billions of dollars and made the dream of home ownership possible for tens of thousands of Australians who never thought it imaginable.”

Once CoStar have taken over DHG and make a mess of it, REA might be in a position to make such a change.  Step up REA, Australia needs you.

I've been listening to podcasts, waiting for a mention of Costar's acquisition of Domain to get attention on the US sites. its started. Remember, these are predominantly CSGP supporters. The immediate mentions talk about learnings coming from Australia back to the US, like customers paying for advertising and social media and text integrations, so learnings coming back to CSGP. interesting, as Australia has a different model, maybe more advanced.

the more interesting news is that there has been a board spill at CSGP, with new board members setting up an asset allocation overview committee to watch over CEO Andy Florence. that implies that CSGP expansions have not all been that good, CSGP has expanded quite aggressively and maybe has too much on their plate given the battle they are in with Zillow in the US

Bottom line, no real concerns so far for the Australian market

disc REA held large weigt

Interesting today that REA share price popped up 5% after advising it was walking away from acquisition talks with UK Rightmove plc.

i had never heard of rightmove until REA made an offer, and I can see why they want it. Over 50% net margin, no debt, growing revenue and eps consistently over the last 10 years.

im a REA shareholder and I was gutted that they could get a deal done, but obviously other shareholders were happy to see it fail,

any thoughts from those that follow REA?

I don't hold (sadly, despite several opportunities to open my account as a shareholder over many years), but surely this is the best way to play the seemingly bottomless Aussie obsession with property? (Yes, forget your nth investment property purchase!)

It is pricey now, but typically only offers fleeting opportunities to buy at something like half-reasonable value. The performance has been rock steady even in difficult conditions for the property market, which has certainly impacted listings growth. That hasn't landed more than a little rap on the knuckles for this outstanding business though.

For all its utter dominance of the local market where it still seems to have copious amounts of pricing power levers to pull, it is also targeting an enormous opportunity in the Indian market with its ownership of the largest real estate classifieds platform there. I wouldn't bet against them making that work given the stellar track record of this business.

Certainly not a bad business when it can deliver 31% increase in net profits during a 6mth period where Sydney and Melb have been in and out of covid lockdown.

Invested in India (Housing.com) and USA (Move, realtor.com)

Interesting features being offered overseas but not yet here in Aust website:

• Rent pay/property management services platform
• Sales Lead generation platform for sales agents
• Loans (bought Mortgage choice last yr - integration happening)

REA Group Ltd (ASX:REA, “REA”) today announced that it has entered into a Scheme Implementation Agreement (“SIA”) with Mortgage Choice Limited (ASX:MOC, “Mortgage Choice”) to acquire 100 per cent of the outstanding shares in Mortgage Choice for $1.95 cash per share (“the Offer”) by way of a scheme of arrangement (“Scheme”). The Offer represents an enterprise value of approximately $244 million.

Mortgage Choice is a leading Australian mortgage broking business with more than 500 brokers, 380 franchises across the country, and over 30 lending partners. It has a loan book of $54 billion dollars and settlements of $11 billion dollars in the 12 months to December 2020(1). Mortgage Choice reported net revenue(2) of $22.2 million and net profit after tax of $4.1 million for the 6 months to December 2020(3).

Accelerating REA’s financial services strategy The proposed acquisition aligns with REA’s financial services strategy by:

•  Leveraging REA’s digital expertise, high intent property seeker audience and unique data insights across a larger network
•  Providing a compelling opportunity to establish a leading mortgage broking business with increased scale
•  Complementing the existing Smartline broker footprint resulting in greater national broker coverage

REA Group delivers strong performance despite volatile market conditions Financial highlights from core operations1 compared to prior corresponding period2:

• Revenue3 of $430.4m, down 2%

• Operating expenses of $145.8m, down 13%

• EBITDA4 (including associates) of $290.2m, up 9% • Net Profit of $172.1m, up 13%

• Interim dividend of 59 cents per share, up 7%

• EPS of 130.7 cents, up 13%

1 Financial results/highlights from core operations exclude significant non-recurring items such as gain/loss on acquisitions and disposals and transaction costs and historic tax provision (historic indirect tax provision reflects potential retrospective changes to interpretation of tax law). In the prior comparative period, they excluded items such as restructure costs and gain/loss on acquisitions and disposals and transaction costs.

2 All financial growth rates refer to YoY comparisons unless otherwise stated.

3 Revenue is defined as revenue from property and online advertising and revenue from Financial Services less expenses from franchisee commissions.

4 EBITDA includes share of associates and joint ventures.

Also Presentation

https://rea3.irmau.com/site/PDF/d52b76c3-a286-40c6-a61e-f1b5edf3c73c/Appendix4DandInterimFinancialReportH1FY21

REA Group shows its resilience in tough times

by Joseph Kim from Montgomery Investment Management 14/08/20

Property advertising platform, REA Group (ASX:REA), was one of the first businesses to announce its results this reporting season. Given the COVID-related restrictions on real estate transactions, it was a strong performance. And, pleasingly for investors, the company will be paying a dividend.

The following are some highlights from the result:

• Full year net profit after tax was down 9 per cent to $269 million, driven by a 6 per cent decline in revenue to $820.3 million
• Total dividend per share of $1.10, equating to a payout ratio of 54 per cent based on earnings per share of $2.04/share
• The result was delivered in an environment where listing volumes declined 12 per cent, and project commencements declined 27 per cent
• Media and financial services revenues declined 19 per cent and 15 per cent respectively
• The result showed good cost control, with REA Group delivering on its 20 per cent cost reductions for the JunQ20 guided to earlier in the pandemic. The company has guided to a flat cost outcome for FY21, which was better than expectations of around a 10 per cent increase
• The revenue line also benefited from continued incremental benefits from additional “depth” revenues (ie higher tier listings and ancillary products) – a feature of REA results over the past 3-4 years.

Listings volumes have rebounded as COVID-restrictions ease (ex-Melbourne), with Sydney listing volumes +47 per cent in July on an easy comparator period in the prior year. Listing volumes suffered for much of 2019 given the uncertainty as a result of the Federal election, although did show signs of life in early 2020. We expect listing volumes to continue to improve, although we believe the investors are already anticipating a significant improvement in listing volumes by FY22 given the resilient share price performance.

REA Group has also deferred any price increases in the current environment, and will look to increase prices if there is a sustained recovery in the property market. However, the CEO noted that they are still “a long way from the circumstances to push a price increase”, with the COVID-19 path a significant part of the decision to raise prices.

REA has also wound back relief measures introduced for the June quarter across Australia, with the exception of Melbourne. These include lower subscription fees and free re-listing and re-upgrade features necessary during the height of the coronavirus pandemic.

While very difficult to track, the CEO believes there is not much evidence of distressed selling in the present market given the Government’s stimulus efforts as well as mortgage holidays implemented by the banks. There is the possibility of a pick-up in distressed selling in September / October, which may increase volumes – our channel checks suggest there are signs of sellers looking to transact prior to the end of any mortgage holiday, especially given the decline in rents and increase in vacancies.