Purplebricks Group (AIM: PURP), a UK-based hybrid estate agent providing a new way to buy, sell or let property, has launched its business in Australia, 28th August 2016, with an initial regional focus on Melbourne and Brisbane before rolling out nationally.
CEO Michael Bruce stated;
“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.”
Bruce told News.com.au that UK operations would be profitable in the coming months;
“We believe the Australian market can grow quickly because we believe our flat-fee model will get into the hearts and minds of Aussie homeowners quickly.”
The same article also quoted McGrath executive dismissing the Fintech challenger;
“Purplebricks will find a small niche in the market and I wish them well.”
PurpleBricks states that Australia represents a £3.3 billion real estate market. Their service will replace a traditional, and costly, agent and allow sellers to pay a fee of only 2.2% commission and an average of $2500 in marketing.
— Purplebricks UK (@PurplebricksUK) August 26, 2016
Purplebricks’ says its pricing in Australia will be a flat sales fee of £2,616 (Aus $4,500) and will include photography, marketing and advertising. Purplebricks is also offering an additional auction facility with a small top-up fee of £480 (AUS $825), which includes an auctioneer and all viewings held by a “Local Property Expert”. Based on the median Australian house price of £357,000 (Aus$614,000), the Purplebricks’ flat fee is expected to save owners an average of £6,690 (Aus $11,500). PurpleBricks has also partnered with peer to peer lender RateSetter Australia to provide a deferred payment option for customers.
Following Melbourne and Brisbane, PurpleBricks will then roll out its services to Sydney, Perth and Adelaide later this year. The Group intends to invest £ 10 million in the Australian business over the next two years which will be funded from existing cash resources.
PurpleBricks Australia will be led by CEO Ryan Dinsdale, Luke Pervan (National Sales Director) and Joby Russell (Chief Marketing Officer) who is relocating from the UK business.