Trade Me vs real estate agents: Five months on, could the boycott be growing?

Back in November last year when the news of an agent boycott over proposed fee increase by Trade Me hit the mainstream media, I was pretty sure sanity would prevail and, more importantly, sellers would not be used as "pawns" in this issue of internal costs of marketing.

LATEST: Trade Me: Agents that represent 80% of listings take up fee hike

It's now five months later and the issue is still not resolved and, as each week passes, I would judge that the balance of power is tipping significantly in favour of the agents.

Back in February I reported that the then two highlighted areas of the country where the initial boycott had begun – Hawke's Bay and Hamilton – still had a situation where Trade Me listings were significantly reduced and in some cases dominated by private sale listings. Revisiting the situation today shows a continuing gulf of listing stock sock between Realestate.co.nz and Trade Me Property in these areas.

Taking the Hawke's Bay region – as at this week Trade Me Property is displaying less than half of the property listings for sale of Realestate.co.nz (based on all house types as well as lifestyle property).

The data analysis of Hawke's Bay I have undertaken this time has broken down the listings by real estate company.

As reported at the time, the regional players of Property Brokers and Tremains who between them represent close to 40% of all listings in the region continue to boycott Trade Me Property; they currently feature less than one in 20 of their active listings on Trade Me Property (most of which are listings added by the seller with the agent details). This means that from among the 1594 active property listings on the market at this time in Hawke's Bay, Tremains and Property Brokers between them are not displaying 583 of them on Trade Me – that is significant over 500 properties for sale from the two big players in the market not being displayed on Trade Me Property!

Given the extent of this boycott, it is clear that these companies are not facing any adverse reaction from sellers – properties are being listed and sold in Hawke's Bay without the exposure on Trade Me Property.

Widening boycott?

What is also significant from the Hawkes Bay data is the extent to which Harcourts are boycotting Trade Me Property, with less than half of its listings in the region displayed on Trade Me. That amounts to another 181, adding to the 583 from Property Brokers and Tremains not featured on Trade Me.

The extent of this boycott by Harcourts is dramatically seen when doing a search on Trade Me Property for Harcourts listings bylisted date – there have only been three new listings across the whole of the Hawke's Bay region in April from Harcourts whereas in fact from data on Realestate.co.nz shows the total number of new properties listed by Harcourts in the region in the month was 227.

The national picture

Applying this analysis to the national picture, Trade Me Property is displaying 8% less listings of property than Realestate.co.nz (this total includes private sale listings).

The analysis below details the extent of the support or boycott by real estate company. Clearly Barfoot & Thompson and Ray White are at this time supporting the use of Trade Me (or as an alternative conclusion these companies' agreements with Trade Me have yet to reflect the new charging rate).

Harcourts is only featuring seven out of 10 of its active listings on Trade Me Property. Harcourts is the largest real estate company in the country with over 190 offices and currently 8315 listings of properties for sale.

Equally as significant is the analysis of listings from Bayleys and LJ Hooker who also appear to be boycotting Trade Me Property which, in the case of LJ Hooker, with 2664 active listings on the market results in only 1755 of them displayed on Trade Me Property.

Boycotts in Other Regions

Further investigation of the listings data shows that in addition to Hawkes Bay, the Manawatu/Wanganui region is also witnessing a boycott of some significance.

From among the 3223 active listings of properties for sale across the Manawatu/Wanganui region (using the boundary definition of Trade Me) as showcased on Realestate.co.nz, just 2567 of them are shown on Trade Me Property (actually somewhat less as this number includes private sale listings). The breakdown by company shows that it is only Ray White that has almost full support for Trade Me Property while Harcourts displays less than a third of its listings on Trade Me Property. Equally, other key players in the market such as Professionals and LJ Hooker, display less than 70%. 

The anomaly though is Property Brokers. This region is its heartland where it holds close to a 30% share of all listings on the market, yet it is displaying over 60% of its listings on Trade Me Property –  a very different situation from that in Hawke's Bay.

So, in conclusion, it looks as though the boycott of Trade Me remains and is growing, given the extent of the Harcourts representation (or rather lack of it!) on Trade Me Property. In my view, as each week passes without some action or decision or negotiation (which clearly will be going on behind closed doors), the market position of Trade Me Property weakens and the muscle flexing by agents appears to be working.

Former Realestate.co.nz CEO Alistair Helm is founder of Properazzi.