As Purplebricks finishes closing its business in Australia at an estimated cost of £41 million, one of the country’s senior property industry figures has said that its biggest mistake was to ‘go hard on price’.
Steve Carroll (pictured above), who is Director of Industry Relations at the Oz equivalent to Rightmove, the REA Group, says Purplebricks misunderstood the strong emotional attachment to property in Australia.
“It was black and white – you can save money by using Purplebricks,” he says in an interview with Chris Watkins given exclusively to The Negotiator.
“That didn’t resonate with Australians because people in Oz don’t mind giving an agent 2-3% of the sale value if the agent does a really good job of selling their property for a premium price, but I don’t think Purplebricks fully understood that.”
He also explains in the video (see below) that, particularly in Sydney and Melbourne, many homes are sold via auction, a service that Purplebricks didn’t offer.
Carroll also accuses the company of not doing its homework before entering the Australian housing market, and that he doesn’t believe the company sought advice from anyone prior to its launch in August 2016, including anyone at REA.
In May this year Purplebricks announced it had lost $18 million during the first half of its financial year to October 2018 and new CEO Vic Darvey subsequently announced it would close the business, citing ‘market conditions’ as the main cause. It currently has 151 properties still awaiting a buyer and 70 agents featured on its website.
Watch the video: