Rightmove’s dominance in online property search has been challenged by a US-based company that bought OnTheMarket’s rival for £99m.
Rightmove shares fell by over 12pc Thursday following the sale of OnTheMarket, which was sold to CoStar Group. CoStar Group is a New York-listed company worth $33bn ($27bn) and listed on the New York Stock Exchange.
CoStar announced that it would invest £46.5m in OnTheMarket for the first year, and also set out plans to spend more than Rightmove over the long-term.
Jason Tebb said that the partnership between OnTheMarket and CoStar would allow the company to accelerate its business strategy, “with a clear goal of becoming the leader in the market”.
The increased competition in the online real estate market is accompanied by a background of weakening buyer activity because of high mortgage costs. It has also led to a greater demand for comparison sites, as estate agents use these to increase exposure.
Rightmove’s half-year results for the period ending June 30 showed that the slowdown on the market was beneficial to the business.
Rightmove’s chief executive, Johan Svanstrom said that agents and developers continue to use their products to win [instructions] and home movers continue to trust our websites to help them make informed decisions.
Our performance in the face of a challenging environment for interest rates demonstrates that Rightmove’s business is not materially affected by the property cycle.”
The Halifax house price index shows that the cost of an average property has fallen by 4.7pc over the last year.
The Bank of England has increased interest rates from 5% to 5.25pc.
CoStar stated that the deal “represents a convenient and attractive entry point to the estimated PS8 trillion UK Residential Property Market”.
CoStar’s founder Andy Florance told OnTheMarket that the Washington-based company will give OnTheMarket the tools it needs to “compete with the dominant United Kingdom real estate portals”.
Post Disclaimer
The following content has been published by Stockmark.IT. All information utilised in the creation of this communication has been gathered from publicly available sources that we consider reliable. Nevertheless, we cannot guarantee the accuracy or completeness of this communication.
This communication is intended solely for informational purposes and should not be construed as an offer, recommendation, solicitation, inducement, or invitation by or on behalf of the Company or any affiliates to engage in any investment activities. The opinions and views expressed by the authors are their own and do not necessarily reflect those of the Company, its affiliates, or any other third party.
The services and products mentioned in this communication may not be suitable for all recipients, by continuing to read this website and its content you agree to the terms of this disclaimer.