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REA Group has finally responded to the recent hail of criticism about its fee increases, stating agents remain critical to its core strategy.
Following this morning's REA Group investor briefing, which was called to provide an update on agent strategic direction and as a response to commentary in the media, interim chief executive Peter Tonagh told Real Estate Business there's been misinformation in the market that REA has been trying to “disintermediate” agents.
"It's been quite specific accusations of disintermediating agents, which is not our intention at all,” said Mr Tonagh, who added that REA delivered "measurable value'" to agents and '"supported the long-term health and growth of the Australian real estate industry".
Mr Tonagh admitted there's been "a lot of noise in the marketplace" regarding its recent fee changes, but plenty of it was being driven by misinformation.
He told the investor briefing that in terms of agents feeling "ripped off" by the company, "there's a couple of angles to that".
"One of them is there’s a lot of noise in the marketplace, some of that noise is misinformation, but there’s enough noise there to say agents are agitated about these [fee changes]. We're not pretending there's no concern out there," Mr Tonagh said.
He told Real Estate Business that REA Group is very conscious of how it’s currently being perceived in the marketplace, and is not dismissive of agents' concerns.
Mr Tonagh pointed to the increasing effectiveness of digital marketing as a factor behind the fee changes.
"If you compare the cost of the different media, digital is still a very effective spend, and transparent in its effectiveness," he said.
Mr Tonagh also moved to clarify the new pricing model, effective as of yesterday (July 1), stating "some prices remain the same, some increase and some decrease".
Reacting to the news that agents have formed Real Estate Digital Marketing Services (REDMS) in response to REA's fee increase, Mr Tonagh said it was too early to comment.
"We had our first communication from them only in the last day or so," he said. "We don't yet fully understand the ownership of that business and the mandate it has."
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