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Loud complaints from real estate agents over Trade Me Property's fee increases have been followed up with action. Several agent offices have withdrawn their listings in the last few weeks.
Craigs Investment Partners broker Chris Timms said while the boycott was small at present, there was a risk it would spread further. He downgraded Trade Me to a hold, with a price target of $4.45 a share, down from $4.81. The shares had traded in a 12-month range of $5.43-$3.96.
''In our last update in November, we noted the real estate agent industry had become more belligerent by poaching Brendan Skipper, then head of Trade Me Property, to lead industry-owned portal realestate.co.nz. More recently, we note some agents have been actively encouraging visitors to open homes to use realestate.co.nz.''
Realestate.co.nz had since launched an advertising campaign. Several agent offices in Hamilton and Hawkes Bay had removed listings and there had been scattered removals elsewhere in New Zealand, he said. The agent boycott of Trade Me to date was small and fewer real estate agents had joined than had publicly threatened last year. Trade Me was removing the cap on fees and moving to a pure fee-per-listing model for agents, as it already had for private sellers, Mr Timms said.
The average listing fee increased to $159 in November for independent agents, which accounted for about 25,000 listings of the 145,000 in total.
Trade Me's agreement with the large national franchises - including Barfoot & Thompson, Harcourts, Baileys, Ray White and LJ Hooker - which accounted for a further 105,000 listings, would all expire by the end of the year, including several in the next few months.
Trade Me was seeking to progressively renegotiate terms, he said. The remaining 15,000 of listings were from private sellers which were charged between $349 and $399, depending on the value of the property.
Trade Me had entered the negotiations in a ''very strong position''. A listing on Trade Me Property was now an essential part of any real estate marketing campaign and Mr Timms believed Trade Me's current average yield per agent listing was low relative to the value it delivered.
Trade Me generated nearly half of all house buying leads in New Zealand but only had 10% share of real estate agent marketing spend and, if private sellers were included where Trade Me had a 50% market share of spend, a 13% share of total real estate marketing spend. By comparison, in Australia, online portals already accounted for 50% of total real estate advertisement spending.