A Commerce Commission analysis of Trade Me’s proposed purchase of online real estate website homes.co.nz says competition might not be substantially lessened but it wants feedback about the deal.
In a new statement of issues analysis, the commission examined whether the proposed deal would cut sector competition.
No price has been declared on the deal and many numbers were redacted in Trade Me’s application document.
“The commission’s current view is that the proposed acquisition is not likely to substantially lessen competition in that market, although we continue to test this view. We invite submissions on this,” it said.
So far, only one real estate agent has submitted: Graeme Berryman, principal of New Lynn agency Berryman Nationwide and a registered valuer, said he was “concerned” about the proposed takeover’s effect on the market limiting choice.
Trade Me wants commission clearance to buy 100 per cent of the shares or assets of PropertyNZ, which owns and operates the homes.co.nz website which gives free property valuations online and is partly owned by Spark.
The commission said comments of some real estate agents indicated that Trade Me Property is a “must-have” in most agents’ advertising campaigns and therefore tend to have most listings.
But other websites such as realestate.co.nz and NZME’s OneRoof also appear to have a large proportion of listings, it noted.
Realestate.co.nz is owned by five agencies and the Real Estate Institute.
OneRoof is owned 80 per cent by NZME, which owns the New Zealand Herald, and 20 per cent by Hougarden.com which operates the largest Chinese-language real estate platform in New Zealand, with just over 50 per cent of site visits coming from mainland China.
As of November 2020, OneRoof had the most residential for sale listings in Auckland, it noted. As of September 2020 it was the fastest-growing real estate site in New Zealand with +92 per cent year-on-year growth.
“It refers to itself as a “strong #2 in market” and offers agents free ads on NZ Herald as part of their OneRoof advertising packages,” the commission document said.
Realestate.co.nz, being owned by five of the largest real estate agencies in the country, is always likely to have access to advertising listings, the commission said.
That indicated competition is already strong in the house sales sector. But the commission wants more information.
“We continue to assess whether rivals could offer other types of bundles that are similarly attractive to agents: for example, whether OneRoof could counter any bundles that the merged entity offered with bundles that combined its real estate platform with its online and print media,” it said.
“At this point, we are not yet satisfied that rivals could offer an equally attractive bundle. For example, we are still considering whether rival platforms would be able to offer both listings and valuations/property information to the same standard as the merged entity and, if not, the barriers to achieving that standard.”
Submissions have been invited on:
• Whether audiences and agents are likely to find bundles of the nature described attractive;
• There are any components of the bundles described that rivals to the merged
entity would find difficult to replicate;
• If so, whether there are other means for rivals to compete against the
Homes appears to have contributed innovative products/services to the New Zealand real estate industry. Its philosophy is to provide free property data to New Zealanders which it says will increase efficiencies within the property market and improve the knowledge of fair market values for properties, the analysis said.
The commission is inviting submissions on the level of competitive constraint that Homes is likely to exert on Trade Me and other market participants and the likelihood of Homes becoming a more significant competitive constraint on Trade Me in any market in the future, including through the introduction of new products/services or other innovations.
Trade Me says the merged entity would be constrained in its conduct by its competitors including OneRoof, realestate.co.nz, Facebook, Hougarden, Neighbourly and by print media.
The commission says a decision on the deal is due on June 4.
Source: Read Full Article