PHOTO: FILE
Australians are facing some of the highest online advertising fees in the world when selling their homes, with costs reaching up to $4,000 for an inner-city listing. This is largely due to the market dominance of realestate.com.au and Domain.
Over the past decade, the News Corp-controlled realestate.com.au has prompted numerous complaints to the Australian Consumer and Competition Commission (ACCC) from agents and industry disruptors, as revealed by Guardian Australia.
REA Group, now valued at $27 billion, posted a net profit of $460.5 million in August, driven by a 23% revenue increase to $1.5 billion. This growth was partly fueled by a 13% rise in advertising costs over the past year.
Mike DelPrete, a US-based real estate expert, described REA as a global leader in the industry, with its per capita operating cash flow 16 times higher than US-based Zillow and nearly three times that of UK rival Rightmove.
Australia is one of the few countries where home sellers bear the advertising costs, whereas in most other markets, these fees are typically covered by the agent’s commission. In the US, for example, agents upload property listings to a multiple listing service (MLS) without charging sellers for advertising.
In the UK, agents absorb advertising costs from commission fees, with databases charging around £1,400 (A$2,700) monthly for all listings. However, in Australia, many agents opt for “premiere all” packages, forcing sellers into top-tier listings that can cost nearly $4,000 in cities like Sydney and Melbourne.
Real estate agents warn of the REA Group’s expanding influence beyond advertising, with concerns growing about its increasing dominance in the property sector. The Real Estate Institute of Australia’s president, Leanne Pilkington, noted that REA is working to deepen agents’ reliance on their services.
Despite concerns, REA Group says agents have various pricing options, with standard listings available from $200. The company justifies higher costs as reflecting their investment in new services and features to enhance consumer engagement. However, agents argue that these structures push them toward more expensive subscriptions, costs that are ultimately passed on to home sellers.
An ACCC spokesperson stated that while they do not comment on specific complaints or investigations, restrictions on access to platforms like realestate.com.au could raise concerns if they substantially reduce competition.
SOURCE: THE GUARDIAN