Online Estate Agents Disrupting the Industry – My Predictions
I believe that in 2015, the online estate agents industry will gain more market share than ever before. Online estate agents continue to report record levels of business. But lets put that aside and look at some independent data.
This chart shows Google search volume for the brand names of some of the most popular online estate agents. We can see that from 2015, interest has started to rise dramatically:
My team and I, having recently launched our own online estate agents – CastleSmart.com – have benefited from seeing the customer demand and sheer need for this service first hand – despite at the time of posting being relatively new to the market.
Several things have aligned that makes now the right time for estate agents to really boom. Most notably, Gen Y (digital natives born after 1981) now have the power to buy and sell property. I’ve discussed other key reasons for the factors behind the boom here.
In this post, I want to discuss my predictions on exactly how this disruption will look, and its effect on traditional estate agents.
2014: Statistics showed that online estate agents were only responsible for 5.5% of house sales. Although small, it’s risen from almost zero a few years earlier.
2015: Online estate agents will continue to grab the headlines and be looked at with some novelty factor. As per the innovation bell curve below, innovators and early adopters have tried out the service and driven the early growth, laying foundations for more mainstream adoption.
Through word-of-mouth and mainstream advertising campaigns that are already being observed, the market share should rise to 10%.
Although I believe that this big bang type growth is unlikely, there’s certainly the possibility.
2016 > 2018: I forecast that these years will see some of the strongest growth, with market share climbing between 20% and 40%. At this stage, traditional estate agents will reluctantly start changing their business model to offer better value to consumers. For example, through lower-cost fixed rate packages.
2018 > 2020: I believe forecasts of online estate agent market share growing to 70% are ambitious. Although I think that online estate agents will now be a mainstream option and will comfortably handle at least 50% of property sales and lettings.
This growth will cause newer estate agents, and some that have failed to adapt, to close shop. Although the biggest estate agents – particularly those which have positioned themselves as premium and built their brand over many years, will continue to thrive but profits will be impacted.
For those that struggle to see these or similar growth forecasts materialise, look at other industries that seemed stubborn to e-growth. When the ‘online equivalent’ eventually gained traction, the new industry boomed. Think of e-books, Internet banking, movie rental and more.
Many notable figures are for the first time investing heavily in online estate agents. The number of platforms is growing and the reviews are glowing. With all of these factors combined, I believe we’re set for an online estate agent boom!