Rich People Will Need To Pay More Money To Advertise Their Houses In Australia's Booming Property Market

Image: LJ Hooker.

One of Australia’s biggest real estate websites, is changing its pricing structure, making it more expensive to advertise homes in exclusive suburbs.

Owned by REA Group, the site will calculate ad listing fees based on the postcode the house sits in, rather than where the real estate agent is based or the deals the agency may have negotiated with the group.

An REA spokesperson told Business Insider postcode-based pricing is “one of a few elements” that will be taken into consideration under the new model.

REA’s general manager of sales and operations Arthur Charlaftis said the new pricing structure is fairer for agents who may have an office in an expensive suburb but sell properties in surrounding suburbs, Real Estate Business reported.

“We have been evolving our pricing model over the past few years, with a move towards depth products and away from a subscriptions model,” he said.

“We are continuing this evolution with the introduction of products and pricing we believe offers a fairer approach to delivering value aligned to local market conditions.”

The new pricing models won’t impact some agencies right away as many are still locked into contracts with the website, however it’s not necessarily agents who will be paying for the campaigns with marketing costs usually passed onto vendors.

In an internal newsletter LJ Hooker CEO Grant Harrod said many agents are not happy with the market-based pricing changes.

“One development I know that has caused concern amongst our network is (REA’s) move to a ‘market-based’ pricing structure,” he said.

“While portals such as REA are important advertising channels, they are not the exclusive option. That being said, if we don’t adjust our strategy, the new environment will commoditise our role as the real drivers of the sale process.”

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