The market share of online agents is growing – and the race for second place is on.
But, questions commentator Mike DelPrete, is it a race worth winning?
In his latest analysis, DelPrete looks at listings by five agents and finds that Purplebricks is effortlessly dominant, while both Yopa and Emoov had had “strong gains” in inventory, followed by Tepilo.
However, he concludes, HouseSimple is going backwards.
He points out that both Yopa and Emoov raised large sums of money last summer – £27.6m and £9m respectively – and are deploying it in marketing campaigns.
He says Tepilo has not raised more money, but has significantly increased its marketing spend.
He claims that HouseSimple’s new CEO “pulled its marketing spend before a product relaunch”.
The conclusion, he says, is not rocket science – the more the onliners spend on marketing, the more new listings they get.
But the real losers, he says, are the traditional agents. Between them, Purplebricks, Yopa, Tepilo, Emoov and HouseSimple had listings in April up 32% from January.
Overall new listings market share for the online agents jumped fro 5.7% in January to 7.1% in April, while Purplebricks increased its market share from 4% to 4.5%, with 6.7 times the number of new listings of its nearest competitor.
So, with Purplebricks in the lead, the online agents are competing with traditional agents and with each other.
The race for second place, after Purplebricks, is on “with several players raising and spending tens of millions of pounds”.
There is, says DelPrete, clearly room to grow market share at the expense of traditional agents.
But here’s the million dollar question: “Can they make money, or is it an expensive race to the bottom?”