Although filled with uncertainty, the COVID-19 pandemic year proved to be a bonanza for the Australian property market, with Harcourts Group Australia reaping the rewards despite being a relative newcomer.
The Aussie arm of the New Zealand-based property group rose through the ranks to secure the position of the country’s second-largest real estate brand by volume amid one of the most tumultuous periods in modern times.
According to property data analytics firm CoreLogic, Australian residential property prices grew at their fastest annual rate since 2004 in the 2021 financial year, rising 1.9% in June to be 13.5% up on a year ago, with prices rising in all capital cities.
House prices rose 15.6% while units went up 6.8%. This spike represented a huge opportunity for real estate firms, and Harcourts Group Australia CEO Marcus Williams was determined not to miss out.
Although young in Australian terms, the company is a veteran over in New Zealand where it was established in Wellington by JB Harcourt in 1888. “We’ve grown to become the largest brand and the most trusted brand in New Zealand in that time,” Marcus tells The CEO Magazine.
“Then 24 years ago, our owners had the courage to step out of New Zealand for the first time into Brisbane. And from there, their vision has always been to become the leading brand here in Australia.”
Now co-owned by Paul Wright, Mike Green and Irene Green, Harcourts has more than 900 offices in New Zealand, Australia, Indonesia, Fiji, China, Hong Kong, South Africa, Mexico, Canada and the US. Marcus came on board in 2011 with the aim of helping the company deliver on its ambitious vision.
“We’ve always wanted the Harcourts’ experience to be recognised as the finest, with three groups of people in mind: our teams, our business partners and our clients,” he shares. “Over the past 24 years, we’ve had incredible success, but we’ve also had a lot of headwinds, from global financial crises to raging bushfires to COVID-19. Despite all those challenges, we’ve always taken market share, and our vision has always been pretty clear.”
Setting it out
Marcus committed to that vision at a Harcourts’ conference five years ago. “I confirmed that, in five years’ time, we would be the second-largest real estate brand in Australia,” he recalls. Even then it was a tall order, with the company’s key competitors having been in operation for the long-term. Market leader Ray White has been trading in Australia for almost 120 years while LJ Hooker, another “iconic” brand, has been around for 93 years.
24 years ago, our owners had the courage to step out of New Zealand for the first time into Brisbane. And from there, their vision has always been to become the leading brand here in Australia.
“So they’ve got a huge head start on us.” However, despite this lead, Harcourts has made significant headway to take the number two spot, according to a CoreLogic report that looks at the number of sales.
“We made sure that as a leadership team, we did everything we possibly could to ensure that our people understood our ambition and that they had the product services and leadership to enable us to achieve that,” Marcus says.
“Essentially, we’ve achieved that goal. That’s extraordinary bearing in mind that five years ago, the gap between us and the business in second position was 11,000 sales. We’re now selling more properties than the second-largest group.”
Marcus announced the major milestone to the Harcourts team in June at its state annual and national awards ceremony held across its five main land hubs and then streamed together using the latest event technology.
The event was particularly poignant because the disruption of COVID-19 and the subsequent risk of bringing teams together across Australia had prevented the company’s nearly 2,000 team members from coming together for some time. “This amazing event was truly a celebration of that significant milestone achievement for our Group,” he smiles.
Since entering the Australian market, Harcourts’ focus has been firmly on growing its market share. “We’ve always been focused on talent, because we know people share equals market share,” Marcus confirms.
We’ve made some massive decisions around our tech strategy to be able to offer choice to our people rather than a standalone product.
“And while our competitors are beating their chests on their results, we’ve quietly and diligently been focusing on talent acquisition and retention, hence why we’re taking market share.” However, the company’s status as a relative newcomer on the property stage has been an undeniable challenge.
“We’re perceived as a reasonably new brand to Australia, sort of a best-kept secret, but as the years have gone by, we are now recognised as a leading brand,” he reflects. “We’re a brand that knows where we’re going, that has very strong values and a good strategic plan.” Those values are very much about “people first”, according to Marcus.
“It’s all about doing the right thing, fun and laughter, and being courageous. Those values we protect very, very carefully,” he says. “They are values that we turn to on a consistent basis to help inform our decision-making process moving forward.” Although it has grown exponentially over the years, Harcourts remains a family business at heart, he stresses.
“It’s not about profit, we’re not a listed business. We’re a family business and we just need to make sure that in everything we do, we’re doing the right thing,” he says.
“And I think what’s helped us grow is that we are recognised as a Group that cares for its team and whose purpose is to create success.” This is all part of being a great franchise, especially in a landscape where other franchises have become “complacent and lazy”, Marcus explains.
“We believe we can be the leading franchise real estate group in Australia – we’re committed to ensuring that our people have a culture that they aspire to and enjoy,” he insists. “Our product services and tools will help them help us to achieve our ultimate goal, which is obviously to be the leading real estate group here in Australia.”
The next challenge
Getting to the position of second-largest real estate brand by volume in such a short time is a great achievement, but Harcourts is not content to stop there. “We’ve got a fiveyear plan,” Marcus reveals, adding that it has three pillars, the first being culture.
“We need to create an environment where people feel respected, valued and enjoy coming to work. We want them to be proud of our brand and everything that we do, so culture is the number one foundation stone for us.”
Last year was actually our best year in the history of our group.
The need to ensure a strong sense of connection, trust and safety has been heightened by the arrival of COVID-19. “People were lost, and I think many are still suffering from the effects of the pandemic – financially, mentally and emotionally in particular,” Marcus admits. “I think it’s going to take a long path for many people to overcome sort of the shock that they experienced.”
The second pillar is made of the company’s value proposition including the products, tools and services that it offers. “It needs to be market-leading; it needs to provide the set of tools, services, training and leadership to ensure that we are able to continue to outperform the market and take market share from our competitors in whichever market we choose to dominate,” Marcus asserts.
“It links back a bit to the fact that people in franchising groups have just gotten lazy. But we haven’t.” To this end, Harcourts has focused on exactly what its people want. “We’ve made some massive decisions around our tech strategy to be able to offer choice to our people rather than a standalone product,” he specifies.
“We’ve made some significant ground around our brand management platform and branding. We’d also just gone through a brand refresh pre-COVID. The timing wasn’t great, but it looked phenomenal.”
The company’s training academy has also added an extra level for stakeholders ranging from business owners to property managers and administrators, Marcus reveals, leveraging both face-to-face channels and Zoom videoconferencing. “That’s been hugely successful by using internal and external talent,” he says.
Leadership makes up the third pillar with the appointments of a number “heavy hitters” at leadership level that Marcus expects will take Harcourts from strength to strength.
Lisa Pennell recently joined as COO, while Adrian Knowles is taking on the role of CEO of Growth for Australia looking at talent acquisition. Karmen Costigan was appointed Head of Property Management, with Christian Hamilton named Head of Auctions across Australia. “We’re beefing up the team and it’s really exciting, especially as this time last year was more challenging,” Marcus adds.
The company’s “very disciplined” culture around communication, business planning board meetings and financial governance and compliance meant that when COVID-19 struck, Harcourts was able to pivot “extraordinarily quickly”.
“When I say extraordinary quickly, I mean, extraordinarily quickly,” Marcus stresses, describing it as an emotional and stressful experience. “But because we’ve got this governance in place, because we’ve got great leadership team members and corporate team members at state and national level, we could turn on a dime, and we very quickly kicked into making sure that our communication was consistent, clear and understood at all levels within our organisation on almost a minute-by-minute basis.”
The company also made sure that everyone had all the training and promotional material necessary to ensure that their people and their clients fully understood that branches remained open, albeit in a “new way of doing business”.
“This is how we were able to transact in the system with their dreams of moving or moving property,” Marcus explains. “It was extraordinary how quickly we were able to do that, whereas many of our competitors were in disarray.”
None of its team members were made redundant. “We held on to every single one of them,” he says. “That was a great thing to do because who could have possibly predicted that the market would come back strong? And when it did, we still had our full team of people with the structure behind us to move really, really quickly.” This led to what Marcus calls a “massive jump” for Harcourts.
“Last year was actually our best year in the history of our Group,” he reveals. “We just had a phenomenal year – we listed, sold, mortgaged, insured and managed more properties last year than in our Group’s history. We took significant market share, hence how we were able to become number two.” But Marcus stresses the importance of being humble, with so many people negatively impacted by the pandemic.
“We’re not a crowing Group, we just say it humbly. But we’re very lucky that we’re still able to trade,” he says. “We’ve embraced new technologies quickly, we’ve embraced new ways of doing business quickly and it’s been a phenomenal experience both for us and for our clients.” ON
The tech front
Historically, the company had a customer relationship management platform called Harcourts One that provided support to its entire network throughout the entire buying process. “That was a market-leading product more than 10 years ago,” Marcus reveals.
“But then, in the tech world, we saw an explosion of new entrants supported by an explosion of millions of dollars in investment.” Rather than tackling the complete platform, tech companies homed in on areas they could specialise in.
“Consequently, we found that the pace of our system was good but keeping up with the pace of the explosion in the tech world was becoming more and more challenging for groups like us who own their own technology,” he concedes. After months of consideration, Marcus and the team decided to adopt a platform called VaultRE.
“It enables us to offer significantly more choice to our network around tech platforms, and it opens up the door for us to further enhance other products like our websites, data lakes and efficiencies in SEO,” he explains.
“That tech decision was massive for our Group, and I’m glad we’ve made it.” The new offering will be rolled out across the Group, on top of its brand management solution, over the next 12–18 months.
“This will help ensure that our teams have platforms that are not only cost effective but also help them to be more efficient, and financially, to ensure that we do become the largest real estate brand here in Australia, which we aim to do so within the next five years,” Marcus says.
When it comes to motivation, Marcus admits it is a more complex matter. “Someone asked me the other day, ‘What’s your motivation, Marcus?’ And I didn’t really have a clear answer,” he admits.
“I think my motivation is our Group – I believe that we have a talent pool that’s so great, that we actually deserve to be the leading group.” He is also a believer in focusing on the journey rather than the destination.
“We all work exceptionally hard and go beyond what’s expected of us pretty much all the time, and you’ve got to enjoy it,” he says. “That’s why I love Harcourts – the culture, the recognition, the pat on the back. If you’re in an environment where you’re not enjoying it, get out because you’ve got to enjoy this journey. Life is so short, so enjoy it.
“If people enjoy what they’re doing, they have a spring in their step. They feel valued, they feel loved, they feel looked after, so they’re going to go the extra mile. Whereas the old-fashioned set-up where the boss sits at their desk and the people are miserable doesn’t get great results.”
It is clear that adding value in every area of its operations is top of mind for Harcourts. “You’ve got to constantly think about getting better, being better. I think we play a huge role in that area, which is why our purpose is creating success,” Marcus says.
“We take it very seriously. We’ve just got to be at the forefront of where we need to be.” And for Marcus, that means that in five years’ time, Harcourts will be number one.
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