First National takes over competitors
May 27, 2008
Real estate industry consolidates as First National takes over competitors
First National is to take over its third
competitor in a month, with LJ Hooker in Nelson the latest
casualty of the market.
By the beginning of June both LJ Hooker’s offices in Nelson will have merged with First National’s under the First National banner, signifying the end of the LJ Hooker brand in the region.
Just weeks ago First National Whangarei took over Century 21, adding it to its stable of multiple offices in Northland. Earlier in the year, First National Taupo took on LJ Hooker’s staff and some of its business after LJ Hooker in Taupo went under.
First National New Zealand General Manager John Stewart said several other offices in the network were in talks with their competitors regarding similar moves.
“Because First National is a
co-operative and not a franchise, it is cheaper for a
business to belong to us than say Harcourts or one of the
other franchises. For businesses looking at the structure
of their overheads in periods of lower sales it makes sense
to pay your brand one or two percent of your turnover rather
than up to 10% that some franchises
“Obviously we have to be careful who is
joining under our banner. We are implementing Best
Practice across our offices and that has rigorous
standards. Over the past six months we have let go of
three First National members whose dealings with customers
did not reflect our brand values.
is not traditionally a flashy high flyer. We are a solid
regionally strong network of like-minded businesses. With
our increasing focus on bringing in a Best Practice real
estate system, we can achieve great results for our
customers. Despite a toughening market, First National is
enjoying a high degree of customer loyalty because of that
Nelson Tasman First National principal
Colin Wilson said his company had taken over the whole LJ
Hooker business, including rental management and property
sales and given all the sales people jobs.
the downturn in sales volumes, the market is
consolidating. We are obviously pleased that First
National is growing but we do recognize the challenges of
the local market and are working to be proactive in these
Mr Wilson has just marked his 20th
anniversary of being in real estate. He says he has seen
tougher times in the industry than what is happening at the
“I am yet to see the substance of all this
doom and gloom predicted. I came into the industry at the
time when the sharemarket was in turmoil after the ’87
crash. I was there through the troughs of the early 1990s
and late 1990s. They are cycles. Despite the doom and
gloom people are predicting now, we have seen worse in the
“I’m not saying it’s not tough out
there, We are going through times when physical sales
numbers are down. But prices have never been this high
before and people live differently. They are often more
highly geared financially so it takes less to put stress on
people’s lifestyles these days. That may make it seem
worse even though there are fewer mortgagee sales and
relatively smaller price drops than other low points of the
property cycle over the past two decades.”
Mr Wilson said the proliferation of agents and new offices during a long prosperous growth period for real estate meant the sudden downturn in sales volume had left a substantial number of firms feeling desperate.
“Some I have heard about have only made one sale for the whole of last month. You can’t run a business on that.”
His one piece of advice for other real estate companies was to band together and talk to each other.
“To protect the salespeople who
work for them they must look internally and talk to their
competitors about how best to get through the times