Property portals: Expect casualties

Editor's note: This item is republished with permission from Global Edge Marketing Ltd. The original post can be viewed here.

When the boom years return to the overseas property market, the Internet landscape will have changed drastically. Nobody will mourn the death of the one-man-band overseas property portal. Scale always wins and history never remembers who came second.

Consolidation is inevitable and the overseas property portal market of the future will be dominated by a smaller number of larger sites and lead-generation networks. Only the biggest brands will be able to charge monthly fees, and their pricing power will be chipped away at by Google real estate as it seeks to eat their lunch.

The overseas property portal as we know it today may soon be dead. In its place, there are likely to be four groups:

• Large lead-generation networks -- networks of overseas property portals that allow agents a single point of access to many portals
• Large country portals offering market access to overseas clients -- examples include Rightmove.co.uk and Primelocation.com in the U.K.
• Google real estate
• A small number of French and Spanish overseas specialists

Large lead-generation networks

There are over a hundred overseas property portals. It's a fragmented market and although there are exceptions, most of the portals are "Mom and Pop" businesses and their business models are looking increasingly shaky. Not only were they built on the assumptions of a thriving market but they rely heavily on Google -- and Google is slowly turning against them:

• Google's algorithms are becoming increasingly localized, making it more difficult to generate traffic in multiple geographic locations
• Google is beginning to bias results in favor of brands, which hurts the natural rankings of smaller businesses
• Google is itself moving into the property portal space (see below)

As the economics get tougher, smaller portals will look to sell up or outsource their entire sales and lead management operation to a network. This is already happening. Portals are collaborating and sharing both properties and leads behind the scenes. Upload to one portal and you get listed on many others and everyone takes a cut of the fee you pay.

This process should accelerate and it's likely to result in a small number of lead networks where you can upload properties to one place and distribute to hundreds of other affiliate portals. As an agent, you'll pay per lead or not at all. The whole process will become more transparent as smaller portals give up their sales operations and focus on generating leads for their network.

Large country portals

Large country portals are the exception. Rightmove.co.uk in the U.K. and Daft.ie in Ireland will always deliver disproportionately large audiences of potential buyers to agents, and agents will be willing to pay for it.

Market leaders tend to outsell their nearest rivals by a large margin, and leads once established and entrenched are difficult to reverse. Witness Globrix -- it has arguably the best product in the U.K. and although it's now the No. 4 player, it's unlikely to ever get close to Rightmove in terms of traffic.

Once U.K. buyers start buying overseas property again in volume, Rightmove and a few of the other top portals, like Primelocation.com, will take a significant slice of the action. The good news for agents is that they are unlikely to be able to charge the rates they were at the height of the last overseas property boom. The large lead-generation networks and Google real estate will see to that. ...CONTINUED

All rights reserved. This content may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this content without permission is a violation of federal copyright law.