REA Group boss sets big target for growth
When property search giant realstate.com.au bought Smartline in 2017 for $67 million, rival Domain was quick to follow suit, announcing its partnership with Lendi. Just over a year ago, REA gave Smartline a makeover with a rebranding exercise – and with the announcement of its planned acquisition of publicly listed Mortgage Choice, the $244 million purchase will give REA Group just over 6% of the Australian mortgage broker market – and a total of 900 brokers, making it the nation’s fourth largest broker behind Aussie.
While those numbers may be impressive, Owen Wilson, REA’s chief executive has bigger plans.
REA claims 12 million website visitors every month – and with that level of consumer attention, Wilson wants to aim for a tenth of all broker settlements.
“Our vision is to create search, find and finance all in one place,” Wilson told Michael Bleby at the Australian Financial Review. “Ultimately our experience will be once you’ve got your loan approved, you can integrate that back into the search process. You can look at property you can afford based on the mortgage you’ve got approved.”
And given what happened the last time REA bought a brokerage, there’s a good chance that Domain may also be shopping. “We remain open to expanding the services we can offer consumers including in financial services,” Jason Pellegrino, Domain’s chief executive told the AFR.
When the REA acquisition completes the deal at the end of June, it will acquire a $54 billion mortgage book, 380 franchises and the services of over 500 mortgage brokers. The deal has been widely lauded by the mortgage industry as being a shrewd move by REA, with SFG’s Blake Buchanan describing the real estate portal as a “lead generating juggernaut”.
Not everyone believes that the deal is a 100% great move, with Morningstar analyst Gareth James telling the Sydney Morning Herald that the real estate giant should take caution after carsales.com.au’s experiences with offering loans.