Lack of cooperation strangles future of online realty
An atmosphere of distrust among property agents and the IT industry's continued slump have kept Poland's real-estate portals from reaching their potential.
Janusz Herod, head of the investment department at Maxon Nieruchomosci (http://www.maxon.pl) , introduced the Warsaw-based real-estate consultancy to the Web in the mid-1990s by uploading the agency's first site. That was five years ago. He didn't update the company's site again until two weeks ago.
Herod hadn't bothered to update the site out of a lack of enthusiasm for the Internet. He admitted he doesn't value it as an efficient tool for promoting office, warehouse or retail space. "You can only attract attention for about five seconds," he said, adding that it's difficult to present complex information on the Web, and hardly any firm invests in it. "Only if you are an exclusive agent for a building can you list many details," Herod said. "Otherwise you're giving an offer away for free."
He found that another obstacle preventing the development of e-business in the property sector is the high price of Internet access, limiting the number of users. "Maybe it would be more popular if the monthly fee for an ISDN line was cheaper and the Telekomunikacja Polska (TPSA) monopoly was broken up," he said.
Herod said that eye-to-eye contact with an agent is an indispensable element for customers purchasing realty, adding that the anonymity of mass media means that the Internet and the press could never replace the traditional property market in Poland. But despite his skepticism about the effectiveness of Web sites, Herod is convinced that good real-estate agencies should have Web sites as marketing tools, since a presence on the Web improves the way a company's status is perceived by potential clients.
For the past couple of years, real-estate agencies such as the Anglo-American Jones Lang LaSalle (http://www.joneslanglasalle.pl) and U.S.-based CB Richard Ellis (http://www.cbrichardellis.com.pl) have recognized the importance of the Internet and have started posting their offers on the Web. International giants and smaller players use the Internet to advertise their services as well as particular properties for sale and for rent. "We just indicate that a product (property) is available," said Lech Gietko, property consultant at Unikat Commercial Properties (http://www.unikat.com.pl), a Warsaw-based real estate agency.
But Web advertising will take some time to win over all property consultants, many of whom believe that Web sites cannot give customers the feel of a property. "You have to see it, smell it and touch it, there is no other way you can perceive a property," said Bartlomiej Hofman, senior property consultant at Anglo-Dutch real-estate consultancy DTZ Zadelhoff Tie Leung (http://www.dtz.com).
Calling all Internauts
One of the obstacles blocking the growth of on-line property services is the low number of Internauts in Poland. According to a survey conducted in March 2001 by research company Taylor Nelson Sofres/OBOP (http://www.obop.com.pl), only 22% of Poles have access to the Internet, 16% use it regularly and a mere 4% shop online.
The use of the Web in property sales in Poland is far below that of more mature property markets. "There is no comparison between Poland and Western countries, the gap is too huge," said Magdalena Zakrzewska, head of the residential department at Knight Frank Nieruchomosci.
According to Zakrzewska, agents in developed markets have a more open approach to Web marketing, grouping their offers on common sites or placing offers on each other's sites and sharing commissions.
In Poland, the tendency is for agents to keep offers in their own database. With this system, clients interested in buying or renting have access to a wide selection of properties. "The Web is a major resource for attracting clients," Zakrzewska said. She added that the sites provide comprehensive information, including technical details of properties and deals involving similar properties in comparable areas, stating when they took place and the prices attained. With the selection of properties on the Web and because the client plays an active role in the elimination process, the number of properties that agents have to advertise is kept to a minimum.
The use of the Internet as a tool for selling property is less evolved in Poland than elsewhere. "It's a tricky issue here," Zakrzewska said. The Polish Association of Real Estate Brokers tried to introduce the Multiple Listing System (MLS), which would allow participating brokers to display each other's listings on their own Web sites, but it failed through a lack of interest from agencies, who were afraid of making their offers available to competitors. "You would be a fool to put all the details about a property on your Web page, unless you're an exclusive agent," said Janet Choynowski, chief executive officer of Poland-based Worldwide Property Web, which operates the immobel.com (http://www.immobel.com) portal.
Two major property portals have been launched in Poland, aiming to capture a share of the corporate and consumer markets through the sale and rental of property. Trader.pl (http://www.trader.pl) was established in 1999 and is a subsidiary of Canadian portal trader.com, and Poland-based immobel.com, which was established last June.
Bringing in a profit
Although the use of the Web in real-estate marketing is still in its infancy in Poland, representatives of real-estate portals remain confident that their business will become profitable in the long run. "Yes, we are making losses right now, but that's connected with the weak position of portals in general and the generally poor performance of the economy," said Michal Dembinski, managing director of trader.pl. Dembinski predicted that within two years the IT market would recover and trader.pl should start to operate at a profit.
Selling both cars and property on its site, trader.pl lists mainly residential properties in its database of more than 81,800 entries. The company charges between zl. 150 and zl. 200 a month to list a property. "It's much cheaper than other media, especially newspapers, but its range is much more limited," Dembinski said. The daily number of hits on the site ranges from 6,000 to 10,000, with an average of 3 million Internauts passing through trader.com's portal each month.
Although the potential profit to be made on real-estate portals is attracting many start-ups, Choynowski said setting up a professional portal in Poland is a daunting task. "(Entrepreneurs) would have their work cut out for them," she said, adding that the size of the market is still limited.
Polish agents do not want to give out their listings, thus highlighting the problem of exclusivity. An agent, who is not sure that no one else will participate in the transaction, is not going to provide all the details about the property, so that everyone has access to it. According to Choynowski, the cost of preparing a professional Web site, which would be recognized by international search engines, can be as high as $1 million. She refused to disclose the costs involved in setting up immobel.com, which lists around 5,000 offers of both commercial and residential property, including listings of properties in Poland, Europe, the United States and South Africa and gets 10,000 hits a day. Despite the poor performance of Polish portals, she said the market will pick up in the future.
For Magdalena Zakrzewska, the days of real-estate sites and portals are numbered. "In my opinion they won't survive unless the listing system is changed and somebody does it professionally," she said. Jaroslaw Wozniak, a PR and marketing manager at Skanska Property Poland, who used to work for the Biznespolska portal, is even more pessimistic. "(Portals) are going to go bankrupt, because Poland is not a nation of Internauts and the market is in its infancy," he said.
