A Comparative Study of Real Estate Portal Revenue Growth

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With the books closed on 2022, the largest real estate portals around the world have demonstrated another year in a long line of consistent revenue growth.

Why it matters: The varied revenue growth between portals highlights business model differences, market share penetration, and hints at future prospects – all while reinforcing the strong position that leading real estate portals have in their respective markets.

  • The standouts are Rightmove (U.K.), Hemnet (Sweden), and Zillow (U.S.), all for a variety of reasons.

The change in revenue between 2021 (boom market) and 2022 (contracting market) highlights differing market dynamics and varied portal business models.

  • The U.S. housing market experienced higher highs in 2021 and lower lows in 2022 compared to many international markets – leading to revenue declines in 2022.
     

  • In Sweden (Hemnet) and Australia (REA Group and Domain), the homeowner pays the portal listing fee – making it easier for portals to increase prices on a fragmented audience that transacts infrequently.

 
 

Hemnet is the clear standout in terms of revenue growth over the past four years.

  • General Atlantic, a growth equity firm, acquired a majority stake in Hemnet in 2016 – and since then the business has accelerated its growth in a remarkable way.

 
 

Dig deeper: Hemnet’s revenue growth has come from increasing its average revenue per listing, with the major driver being price increases (in addition to new premium products).

  • As the only major portal in Sweden – far above any competitors – Hemnet has incredible pricing power.

 
 

On the opposite end of the spectrum, Rightmove has the slowest growth of its peers.

  • Rightmove is the dominant portal in the U.K. and its competitive position hasn’t changed in years, but the company has a more conservative growth model and tends to “stick to its knitting” more than its peers.
     

  • It’s also reached market saturation and is only able to raise prices so much each year.

 
 

The bottom line: Real estate portals are strong businesses that typically demonstrate consistent revenue growth.

  • But across the world, not all portals are created equal: markets, business models, relative pricing power, and competitive tension all factor into growth potential.
     

  • And with an asset class as financially and as psychologically valuable as real estate, customers – real estate agents and homeowners – are willing to pay more and more each year, fueling the perpetual revenue growth machine.