Realestateview.com.au was formed around 2001 as an industry portal and had nothing to do with property.com.au which has been around since 1995 and was owned by PMP Communications.

They sold out to some other company (RPData?) before realestate.com.au bought them a year or two ago. The REIV now controls realestateview.com.au.

Sal

Were you guys around during the last big ‘clean-out’ of the industry in the early nineties?

[Just as a point of reference, that's when Property.com.au (Realestateview.com.au as it was then), began - pre-Netscape browser days, ftp's and 9.6Kbps when the browser was eventually launched - ah, the good ole days And Even Thornley was hatching-up Looksmart with Readers Digest funding but still hadn't launched.]

What were you up to then, Simon? Learning some graphs and sales skills with McKinsey while the rest of us were wondering who was going to be left.

Papers, schmapers…that’s what I always say.
REA, Domain, blah, blah, blah. I know another very well known (VERY) old-timer who has just sold a couple of big properties without using the Web at all. He is the master of niching. Makes you wonder, don’t it.

“firstly, they need to maintain growth in revenues and as Australia is their main driver of revenues, a price increase is the easiest way”.

Growth in revenues simply can’t happen in the current economic environment given the number of agencies either closing, merging and cost cutting implementation. I believe to the contrary where the market can anticipate profit downgrades given that their remains a very strong possibility that third party advertising will be seriously impacted and reduced substantially.

Until businesses see some light at the end of the tunnel we can expect very conservative agency marketing expenditure for quite some time to come.

Good article and makes a nice match for our top 10 predictions for the Australian property portal market on Property Portal Watch.

I have to agre with you that REA will increase their prices. My guess is that they will for a couple of reasons – firstly, they need to maintain growth in revenues and as Australia is their main driver of revenues, a price increase is the easiest way and secondly, they will see this as a way to drive another nail into the coffins of the papers and the online competitors.

I also think that Domain will follow REA up on any price increase as Fairfax needs every cent of revenue it can generate. It doesnt make sense for them to drop their prices.

Finally – i agree with your comments about the papers and TV … there is too much investment for them to die overnight but they will eventually pass away … just look at the US and what is happening there.

Simon Baker

I think you are absolutely spot on and there won’t be a recovery until real wages fall back into line where once again they allow the “Australian Dream” to become a reality to the younger generation.

I’m at an age where I have seen several booms and busts but the current one is far different from the past.

Here in Canberra the dream of home ownership for one reason or another has been taken away from the young generation.

There is only one way it will become achievable again and that is when supply of land way exceeds demand and therefore the market drives down the price.

But I cannot see it happening because governments have become reliant on taxes and duties on land transactions so they believe it’s in their interests to keep land scarce and keep prices up.

I remember the days here in Canberra when a young couple could walk into the lands office and choose a block of land over the counter and pay maybe the equivalent of a years wages for a decent block.

Now land is so scarce they need to pay $200k – $300k for a block if they are lucky enough to find one.

That’s equivalent to 3 – 4 years wages and the dream has evaporated.

I’m old enough to also remember Gough Whitlam opening up Western Sydney and housing boomed because it was affordable.

Like it or not, one way or another Government needs to make it affordable again, and there is only one way and only one way, that is to oversupply land availability.

Throwing money at first homebuyers or reducing stamp duties won’t solve the problem, only one factor will make housing affordable and it’s over supply and the only control the government has is land supply.

So open up the land.

Oh Oh, here come the greenies.

I believe that supply and demand and lower interest rates will still drive prices, albeit somewhat more modestly than in previous years.

I think one could safely predict rental prices to continue to climb over the next couple of years though.