Purplebricks Group plc (AIM: PURP) the hybrid estate agent providing a new way to buy, sell or let property, has told DirectorsTalk that it is formally launching its business in Australia today, 28(th) August 2016, with an initial regional focus on Melbourne and Brisbane before rolling out nationally.
Australia represents a GBP3.3bn real estate market*(1) , and the Group’s market research indicates that its compelling proposition of high quality customer service coupled with a competitive flat fee structure will appeal in a market where sellers are currently charged an average of 2.2 per cent in agency commission and an average $2,500 in marketing costs.
Purplebricks’ pricing in Australia will be a flat sales fee of GBP2,616 (Aus $4,500) which will include photography, marketing and advertising on platforms Domain.com.au and RealEstate.com.au, as well as the Purplebricks Australia website. Given the role of auctions in the Australian property market, Purplebricks is offering an additional auction facility with a small top-up fee of GBP480 (Aus$825), which includes an auctioneer and all viewings held by a Local Property Expert. Based on the median Australian house price of GBP357,000 (Aus$614,000), the Purplebricks’ flat fee will save property owners an average of GBP6,690 (Aus $11,500). The Group has also partnered with RateSetter Australia, a leading alternative finance company, to provide a deferred payment option for customers.
Following its launch approach in the UK, Purplebricks will initially launch in Melbourne and Brisbane and then roll out its offering to Sydney, Perth and Adelaide later this year. As previously announced the Group intends to invest GBP10m in the Australian business over the next two years which will be funded from existing cash resources.
The Group has recruited a strong management team led by Australian CEO Ryan Dinsdale, Luke Pervan (National Sales Director) and Joby Russell (Chief Marketing Officer) who is relocating from the UK business. The Group’s initial intake of Local Property Experts has been recruited and further recruitment continues as part of the growth strategy.
CEO Michael Bruce comments, “Australia is a natural second market for us to target. It is a large and fiercely competitive real estate environment, but one where sellers are currently receiving poor value for money. We will offer the Australian public far greater transparency and a fairer way to sell their homes. We are very excited about the size of the market opportunity there, and believe that the expansion outside of the UK provides both additional returns for investors and the benefit of diversified income streams.”
