Proactively embracing technology is the key to success in this industry
London, United Kingdom (PRWEB) May 23, 2012
Few industries do well during economic downturns, and this industry is not among them. A fall in property prices during 2008-09, combined with risk-averse lending institutions making finance harder to come by, cut revenue for real estate agencies. The worst year was 2008-09, when an 8.5% fall in revenue triggered office closures, staff cuts and pay freezes in the industry. Overall, industry revenue is expected to remain stagnant with annualised growth of 0.2% over the five years through 2012-13.
The outlook for the Real Estate Agencies industry in 2012-13 is not improving significantly. General economic conditions are faring worse despite improvements with commercial real estate values and yields. According to IBISWorld industry analyst Craig Shulman, “London as an international city is expected to recover more quickly than the rest of the nation, but the effects of the European debt crisis have dampened international investment levels”. Residential values remain weak, and a double-dip recession has begun during a period of government austerity and European financial turmoil. As such, industry revenue is forecast to decrease by 3.4% in 2012-13, to £8.96 billion. Due to the continued effects of government austerity measures and the European debt crisis, industry revenue is forecast to decrease marginally over the outlook period to 2017-18.
A recent government review was unsatisfied with the level of competition in the industry and called for service innovation to provide customers with improved value. Shulman adds, “the online sphere is a prime area for innovation and although an increasing share of agents' marketing expenditure is dedicated to online campaigns, there remains a lot of capacity for growth and diversification in this area”.
The Real Estate Agencies industry has a low level of market share concentration. The industry is highly fragmented, with thousands of local and regional players and there are no operators large enough to be considered major players. Agencies tend to specialise in their local areas, and the range of services offered by the industry allows service specialisation. It is expected that the long-term trend of a gradual increase in the level of industry concentration will continue in the years to come.
For more information on the Real Estate Agencies industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Real estate agencies are intermediaries in the buying, selling and renting of real estate on a fee or contract basis. Additional services provided by companies in the industry include advisory activities and appraisal services in connection with buying, selling and renting of real estate, and real estate escrow agent activities.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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