The paper "Ray White: Real Estate Property Agents" is a great example of a marketing case study. The real estate industry in Australia re-established itself following the global financial crisis and has continued to grow over the past few years. The Australian real estate market has witnessed a significant amount of inbound capital from investors overseas. The industry has, however, experienced a great level of property market uncertainty which has resulted in relatively slow growth. From as early as 2003, according to a survey by the Australian Bureau of Statistics, there were about 10,001 real estate services businesses that operated within Australia.
This comprised of 3,639 franchised real estate agents, with 4,545 agents who were non-franchised and another 1,818 other real estate services businesses. The industry had already employed about 76,599 people. The incomes generated by these businesses were already impressive and stood at $7, 524.7 million, working out to an average of $98,200 for every person employed. The Franchised real estate businesses generated over $3, 672.9 million compared to $3, 145.7 million from the non-franchised agents. These figures revealed significant growth in the industry compared with the previous survey.
The total income had grown by 17.8% above the 1998-99 results. The growth majorly attributed to the property boom experienced across the country during this period. The major income source was from leasing commissions and property sales, both of which were growing at a rate of about 20.9% annually. As shown in fig 1 (see appendix), the following sources represented the income proportions the non-franchised agents: property management commissions (17.8%), commissions from property sales of non-residential properties (9.6%), leasing commission fees (5.8%), and vacant land (4.5%).
The proportions for franchised agents were: 15.6%, 6.7%, 3.7% and 4% respectively (Australian Bureau of Statistics, 2004). The real estate industry in Australia has been under transition for some time now. After emerging from the global economic challenges, it has managed to achieve strong balance sheets, with investment property valuations that are stable. The listed REITs, as well as the unlisted funds, remain relatively safe, serving as defence investments during unpredictable economic situations. However, the industry is faced with challenges of establishing new growth opportunities. It has struggled to close the gap between NTA and share price and to diversify sources of funding (PWC, 2010). Ray White is an established real estate business in Australia with great success in the industry.
The firm has been in operation for over a century in the property management business and serves customers interested in buying or selling a house or any commercial property, seeking to buy land or renting an apartment. The firm sells approximately one in every ten properties in Australia and New Zealand and has gained a reputation as a property expert in real estate.
The agents are ready to help clients with house prices, information about the suburb and other details to help one familiarise with the property market in Australia. IBISWorld estimations indicate that four of the largest operators represent 18.5% of the industry revenue, an indication of low market concentration. Businesses that make over $2.0 million accounts for not more than 4.7% of business in the industry. The largest establishments have a strong presence within smaller markets since they compete with smaller operations in these regions.
Ray White has been dominant in the market with more than 700 offices but has had to compete with other great performers. McGrath Estate Agents boasts of around 45 offices in NSW, with more others in Queensland. Victoria-based Hocking Stuart, the Professional, RE/MAX are among establishments with the top four of their agents doing very well in the market (Real Estate Business, 2012).
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