Rightmove growth at all-time low, despite its market dominance
Rightmove’s growth rate is at an all-time low, despite what some consider to be an unbeatable lead amongst portals in the UK.
That’s the view of Mike DelPrete, former head of strategy at a New Zealand portal and a long-standing analyst of estate agencies in the UK and the US.
In a new analysis he says the primary driver for Rightmove – accounting for 72 per cent of its revenue – is its core agency listing service. “The growth rate of this business has dipped to four per cent, less than half of last year, and the lowest rate in years” says DelPrete.
He continues: “Rightmove has saturated the UK market. Every estate agent that could possibly be a customer, generally is. Therefore, the only way to increase revenues in the agency listing business is by raising prices.”
However, the analyst warns that Rightmove’s ability to raise prices is diminishing, and the key performance indicator for portals – average revenue per advertiser growth or ARPA – is falling annually.
DelPrete, an expert in US portals and agents as well as those in the UK, says the American site Zillow underwent a similar slowdown in its core lead generation business.
The analyst says the logical next move for such a business is to find new revenue streams, and in Zillow’s case it launched an iBuyer operation, home loans and other initiatives. “In the face of growth headwinds, Zillow acted decisively to diversify.”
However, he insists Rightmove has not done this – perhaps because it is in such a dominant position with a huge profit margin of 74 per cent on revenues and may be beyond the reach of other portals in the UK.
“But as a public company, it naturally faces pressure to grow — and that growth has steadily slowed over a number of years” says DelPrete.