FOCUS: New real estate field to help Youla diversify, rather than earn in short term

By Yekaterina Yezhova

MOSCOW, Sep 18 (PRIME) -- Free online advertising service Youla has launched a real estate section and plans to become one of the property classifieds leaders by 2018. Analysts say the initiative will help the service to diversify and get itself differentiated on the country’s real estate market, counting 4 million deals per year, but would hardly bring profits in the short term.

“Real estate is one of the key markets for online classifieds, which brings them up to 6–7 billion rubles of revenue per year. The market has lacked an all-embracing approach to the housing issue that would facilitate the process of looking for lodgings and make it more convenient for all market participants,” Youla’s head Yegor Abramets told PRIME.

As to the amount of investments spent on the project, Abramets said that it is hard to count it since “main investments are working hours of our employees.”

The real estate section is already available for the whole country. Additional options, such as free professional photos of an apartment, are available for citizens of Moscow and the Moscow Region. “They’ll shortly appear in St. Petersburg with other cities with more than a million of people to follow later. The service is available on desktops and on iOS and Android mobile devices,” the service’s chief said.

The country’s real estate market sees 4 million deals per year, while the Moscow market witnesses some 200,000 deals, according to the 2016 data of the state cadaster service.

Created by Internet giant Mail.Ru Group in 2015, Youla launched its real estate section in late August in partnership with digital real estate agency 33 Slona. Youla wants to become one of the leaders on the real estate classifieds market by the end of 2017.

Estate agency Knight Frank named CIAN, Avito, and Yandex.Realty, a unit of Internet giant Yandex, as the most popular real estate sources in Russia now.

Abramets said that Youla’s real estate section differs from competitors, in the first place, thanks to its comprehensive approach. “We don’t only allow an owner to place an advertisement, but give them a whole range of additional ‘turn-key’ services, varying from free photos up to accompanying the deal. For buyers, this approach means access to a database of checked apartments and advertisements, which have been moderated by artificial intelligence,” he said.

Youla wants to accompany real estate deals from preparing of an apartment, taking its photos, and cleaning up to a still-projected electronic closing of the deal with the help of the blockchain technology, a much talked about distributed database that keeps a continuously-growing list of ordered records, called blocks.

“The promised future offer of ‘an electronic closure of a deal via blockchain’ will become available to all participants of the real estate market, if such an option materializes. In order to implement the electronic registration of deals, the legislation in the sphere of a transfer of rights for real estate and the technology of work of the Federal Service for State Registration, Cadaster, and Cartography should be revised,” Alexei Treshchev, director for city and countryside real estate at Knight Frank, told PRIME.

“It’s still early to speak about potential of the new service since it’s unclear what unique options it will provide. For example, preparing of an apartment for sale, cleaning, and free shooting are provided by real estate agencies, and Yandex.Realty moderates advertisements, which includes checks of rights for real estate, authenticity of uploaded photos, and the fact of sale of an apartment.”

Youla’s head Abramets said that its partner 33 Slona will share with the service its commission charged for additional services from property owners.

Brokerage BCS said effects on revenue will be minimum in the short term, but Youla will win by means of differentiation.

“The market of real estate advertisements is already well saturated: the long-standing leader CIAN is at the head of it, with Avito and portals of Yandex and Mail.Ru Group also keeping a huge market share along with other specialized portals,” BCS analysts said in a research note.

“Youla said it has 20 million unique users per month, and new functions will help it to get distinguished from bigger and more popular competitors. Mail.Ru Group said earlier that it will experiment with Youla’s monetization this year, and it makes no sense to expect that the new option would become a growth driver at least in the short term.”

(57.5336 rubles – U.S. $1)

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