Covid-19's Effect on Global Real Estate Portal Revenues

Earlier this year I outlined the ways in which the world's leading real estate portals were reacting to the pandemic, including significant customer discounts. The results are in, and the revenue impact to portals is quite varied.

Taking a Hit to Revenue

Top of the list is Rightmove, the U.K.'s leading portal, which saw a massive 37 percent drop in revenue for the first six months of 2020 compared to the same period in 2019. That's ten times greater than any other portal. The others saw more modest revenue drops of a few percentage points, with some, like Germany's ImmoScout24 and The Netherlands' Funda, managing to grow revenue.

In absolute dollar terms (and in local currency), Rightmove again tops the list, with revenues dropping a massive £38 million year-over-year. Zillow lost a substantial $15 million, but from a much larger revenue base ($450 million vs. Rightmove's £105 million in H1 2019).

Rightmove as the Outlier

The evidence clearly shows Rightmove as an outlier, while other portals managed to weather the Covid-19 storm relatively unscathed. Why?

One critical component of the answer is the severity and length of lockdown. My earlier research (featured in this Financial Times article) highlighted the U.K. as having one of the most restrictive lockdowns around the world, with a correspondingly severe drop in new listing volumes.

The second critical component is business model. Australia's portals generate most of their revenue from vendors, not agents. The U.S. portals generate revenue from selling buyer leads. Rightmove generates revenue from agents advertising houses for sale -- and if new listings drop 90 percent, there are 90 percent fewer houses to advertise.

A combination of the U.K. lockdown's severity and length, coupled with Rightmove's business model, made it especially susceptible to Covid-19. It was forced to offer its customers deep discounts for many months while the lockdown was in effect.

The pandemic affected all real estate portals -- but not equally. The more severe the lockdown, the more significant the revenue drop. 

A Note on Data Sources

To create a true apples-to-apples comparison, the data used is from the period beginning January 1 2020 and ending June 30 2020. The six months reveal a complete picture of the start, middle, and recovery from the pandemic and associated lockdowns.

The data is from each portal's residential real estate segment: Zillow's Premier Agent revenue, realtor.com's real estate revenue, Scout24's residential real estate revenue, Rightmove's agency revenue, REA Group's Australian residential depth and subscription revenue, and Domain's residential real estate revenue.