As an avid traveller and a leader in real estate advertising, over the years, I’ve observed how the world advertises real estate, and have always remarked that Melbourne is at the forefront.
History of Advertising:
I’ve come from an era where The Age Classifieds dominated the real estate advertising market with its artist sketches and column centimetres. Full colour became the ‘go-to’ at the endof the 1990s, as newspaper print bled colour and created inconsistencies, so the brilliance of glossy local magazines like The Melbourne Weekly emerged. Homeowners paid $2500-$5000 for a full page each week for a 4-week campaign. Insane! For some, it was bragging rights between their neighbours and the social elite, others just wanted to be seen in the pack. At a similar time, corporate real estate magazines evolved into hot property as buyers skirted around the local real estate agents to collect their Saturday bibles and scour them over a coffee at the local cafes planning their day full of property inspections.
At the turn of the century, homeowners paid 1-1.5% of their property’s worth in advertising, therefore the median Melbourne house price of $314,000 in 2003, would spend around $3000-$5000 in advertising. (In the days I created advertising schedules for leading eastern-suburb agents, most of the schedules were between $8000-$15,000 in 1998).
The Internet Portals:
And then www.realestate.com.au started to bring out its A-game, with domain.com.au following suit, while providing similar but complementary information. Other real estate portals vied for a point of difference but didn’t get the traction. www.realestate.com.au has allowed the rest of the Australian states to catch up to Melbourne’s winning formula in gaining the advertising dollar. Using premium listings and professional assets including photography, floorplans and copywriting, properties in all states and territories, urban and regional, all want to stand out keen to impress.
The Cost of Looking Good:
To be seen amongst the gamut of property on the internet portals, you must make a great first impression… and that comes in the form of styling. Photography that captures that styling. Stylists turn properties into the pages of an interior design magazine. While the detail isn’t so obvious through the photos, there is also a higher expectation that properties are well presented – so new carpet, paint, fixed grouting, landscaping, etc is all the go to ensure that properties gleam when you inspect. Now the 1-1.5% in advertising from 20 years ago is 1-2% of a property’s worth in the combined cost of advertising, styling and maintenance, plus the cost of sales commission and legals.
With the median price of a property in Australia hovering around $1million, it generally means it costs $20,000-$50,000 to sell a property, without the cost of stamp duty and moving into the next property, assuming it sells.
Property Costs Out of Control:
Real estate advertising is a $1.4billion industry with four companies dominating 70% of the industry according to IBIS World. With the cost of property taxes going up, tighter regulations on what you are allowed with your property, and harsher compliance on rental properties and new builds, how can the real estate industry make it fairer and more cost effective to advertise a property for sale or lease when the property owner is already crawling on the floor struggling to get up? The whole purpose of having property is to create financial freedom as our population gets older, and reduce the burden on Centrelink and other government assets. Yet property ownership has become more of a burden as governments make property owners pay for their costly mistakes.
Seller and Buyer Dilemmas:
The disconcerting aspect of advertising for sellers is the expectation to meet or exceed the market to be seen. IBIS World suggest that 23.6% of all online listings are ‘premium.’ That’s one in four. Some property owners don’t have the funds for premium listings, let alone cosmetically refurbishing their property, storing their items, bringing in a stylist and all the other knock-on costs that the process requires, just to be a ‘premium listing.’
The disconcerting aspect for buyers is that the photos make the property look amazing, but once they inspect the property, they are left bitterly disappointed that the rooms are smaller than they expected, the floors are uneven, the quality is barely liveable, the list of complaints is ever-changing. Yes, some buyers are idealistic, but most are realistic and are frustrated that the glamour in advertising is wasting their precious Saturdays and Sundays inspecting properties that aren’t suitable. They just want the visuals and price brackets to get real.
The Disruptors:
An interesting article by Kent Andrew Lardner suggests that the real estate industry could disrupt the real estate advertising industry with industry-led AI-driven technology that could unravel the current duopoly, to create cost-effective advertising with more industry control in the future. Using the extensive data that the industry already holds, they could create a GPT-driven search portal that gives up-to-date suburb trends (rather than data that’s 3 months’ old), buyer engagement and quick search options, that will reduce the need for premium listings fees.
This also opens the space for listing descriptions to be more proactive in providing key criteria that are factual, to enable buyers to be more specific in their property search, making real estate agents and property managers more accountable in their listings. Imagine if there was a minimum size for a room to be called a ‘bedroom’ (say 2.8m x 2.8m not including any built-in wardrobe)? There would be a lot of properties that would quickly be positioned through search criteria as a 2 bedroom rather than a 3 bedroom property.
Conclusion:
Through the disparity of lack of advertising controls and government mis-management of funds, we need the real estate industry to find clarity, structure and fairness. We need to build trust in the industry, but also in property ownership. Other industries are industry-led – look at training and education, environment, manufacturing, resources, law, accounting and finance. They all have quality control frameworks, policies and procedures that stakeholders must comply to rigorous standards. By sliding the scale over to the fairer side, we can still achieve record prices by allowing agents to negotiate, and also create a space for housing affordability through innovative housing concepts and planning. All while ensuring buyers and sellers are fairly positioned in the market and can make their decisions through trusted information.
As for Melbourne and being the forefront in real estate advertising? Melbourne’s position has moved, most noticeably as property markets in Brisbane and Perth reach higher median prices. New South Wales and Queensland have found their feet in more glamourous advertising campaigns, and sellers are paying for it. It’s time to put the real back in real estate.
About The Author:
Sue Langeder is the founder of Real Copy Right, a real estate copywriting business based in Victoria. She has 30 years of real estate advertising experience working for agents in and around Melbourne and across the globe. She works predominantly in sales, but also property management, medium term rentals, airbnb and corporate. Sue is enthusiastic about training the next generation of real estate agents and real estate marketers.
