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Can anyone beat Realestate.com.au at their own game?

Property, Whitepapers | Comments (16)

Can anyone beat Realestate.com.au at their own game?

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Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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16 Comments

  1. Darren Cash
    :

    Hi Roger – I find the manner in which you present your ideas logical and entertaining – I am a total novice RE: virtually all things “investment”, and quite young – but articles such as this one have really sparked a level of intellectual curiosity – thank you. QUESTION: I am confused by your rating OnTheHouse of A grade quality considering its overvalued stock price (despite the potential for a marked increase) – I was under the impression that an A grade company was a business that the MontgomeryFund would likely invest in, yet I also know that you only purchase stock at a price less than the perceived intrinsic value? Thanks

    • Roger Montgomery
      :

      A1 means the company has the lowest probability of going bust. Value is completely separate to the question of quality. A high quality company may, today, be expensive or cheap. We want to buy them when they are cheap.

  4. Lloyd Evans
    :

    Interesting white paper Roger,

    It would be hard for OTH to compete directly with REA purely on property listings due to its cemented position within this market and its network effect. Most agents I have spoken to would list approx. 60-70% of their listing on REA, with the balance on Doman. This is purely due to the network effect.

    Console is the number 2 software for real estate agents. Rockend software – rest system is far superior and agents prefer it due to functionality and overall support. I don’t see a lot of upside for this part of the business.

    What is interesting is OTH ability to sell ‘leads’ to agents and potentially to banks. I see this as having tremendous upside.

    On REA the majority of data that agents provide through listings are being sold to the likes of RP data, with OTH this income is kept in house with its Residex.

    The potential to sell the leads to banks is also very attractive, notwithstanding it would cut the requirement for a residential brokers.

    Agents are somewhat fearful of REA power and ability to raise prices given its position. There was also speculation that the REI (Real Estate Institutes) was planning to launch their own property website for its members, however this appears not to have come to fruition.

  5. Peter Watson
    :

    Interesting opportunity. I can see it becoming a must read site for property investors.

  6. Ben Godfrey
    :

    Roger, OnTheHouse is pretty poor quality, can’t understand why you’de be commenting on it??? Weird.

    • Peter Watson
      :

      I have been obtaining information from “On the House” for the last 12 months and I have no issue with the quality. The site is easy to navigate and the information is reasonably up to date. It is superior to Realeatate.com with respect to factual information on past sales and information on surrounding property. Hence, I beleive it is likely to become very popular with serious property investors or home buyers.

  7. Tony Tucker
    :

    Another Value,able analysis of exceptional depth and insight Roger. I really enjoy your writing. Thank you for giving your very well-reasoned view of Onthehouse.

  9. Lisa Creffield
    :

    This was very interesting, thanks for posting it. I would be interested to hear your thoughts on the iSelect IPO (due next month) as it strikes me there are some parallels.

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