West Australian launches localised REA rival

The West Australian newspaper group and the Real Estate Institute of Western Australia have taken on Realestate.com.au with a new a listings website for the local state market.

The website www.westrealestate.com.au is owned by West Australian newspapers, with content and listings provided by the REIWA and its members.

“This is a strategic business move to ensure that the independence of both The West and reiwa.com is maintained and ensures healthy competition for the national providers of online real estate advertising,” says REIWA chief executive Anne Arnold. 

Most agents would see these comments directed squarely at News Corp-0wned REA, which has 70% of the online property ad market. Next biggest is Domain.com.au, owned by Fairfax, which only has a 20% share, according to AFR. 

The website’s launch follows reports of growing discontentment among agents towards ASX-listed REA Group over plans to approach home owners directly to run ads on its site and the group pushing up advertising rates in a flat property market.

In a recent AFR interview, Geoff Baldwin, chief executive of 14 RE/MAX offices in WA, called REA “chief extortionists”.

“They continue to put the price up and say to us, ‘You need us, you need our product’. Now they come out in public and say, ‘It’s our intention to go direct to the public’.”

REA chief executive Greg Ellis has defended the increase in subscription prices, saying its rates are still lower than what newspapers charge for property ads.

Ellis says REA will not approach customers without the consent of their agents.

“We have no plans at all to disintermediate the agents,” he says.

Realestate.com.au has a market cap of more than $1 billion.

In the 2010 financial year, it generated $194.3 million in revenue, an increase of 16% on the previous year.

Last month David Burkett, chief executive of the Independent Print Media Group, said it planned to turn Homehound, a rival listings website, into a more serious competitor to REA.

“Real estate agents always have issues with REA, but they still advertise with it,” Burkett says.

Homehound is a joint venture between real estate franchise groups LJ Hooker, Raine & Horne, Century 21 and Ray White and the Hannan media family.

Earlier in July, it was reported that Liberal Party powerbroker Michael Kroger and The Weekly Review magazine, launched by Anthony Catalano, former property editor and marketing manager for The Age, had been involved in separate bids to establish top-end websites that would challenge the dominant position of realestate.com.au.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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