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ftb_fml

Time to buy Purple Bricks shares?

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Happy for the more experienced share-dealers to shoot me down in flames, however does now not seem a potentially good time to invest in this company?

In the shorter term stagnating transactions and poor affordability currently suggest that in future transaction numbers should increase (more business for all) and if prices fall sellers will likely be looking to limit their sales costs further (a greater market share for cheaper alternatives to traditional agents).

In the longer term it looks like the house-selling model is going the same way as much of retail already has - from bricks and mortar to more cost-competitive online services. Anecdotally I've seen two or three properties come to market locally with Purple Bricks, while previously there had been none that I can remember.

A shrewd longish term buy perhaps?

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Well a brief look at the share price shows an individual share going from about a quid in November 2016 to approximately a fiver now.

They may pick up market share compared to their rivals but, in an environment where we are predicting wealth destruction and peole running for the lifeboats I don't think the EA sector is a good bet. 

Could be completely wrong but bargepole springs to mind.

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15 minutes ago, ThePrufeshanul said:

Well a brief look at the share price shows an individual share going from about a quid in November 2016 to approximately a fiver now.

They may pick up market share compared to their rivals but, in an environment where we are predicting wealth destruction and peole running for the lifeboats I don't think the EA sector is a good bet. 

I think they won't be hurt by others as much in a crash. Sellers typically pay up front to Purplebricks, so if they remove from the market in a huff ("I'm not giving it away") it's still a win for them, whereas traditional EAs actually need to get to completion. Much longer term, Purplebricks may pick up more market share if high street firms go bust. But I do agree most of the upside must have been priced in now. I thought about buying when they were about £1.50, then decided to wait until the new tax year to put in an ISA. By then they were up to £3 I think.

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I agree they won't be hurt as much as the others.

They will probably get more business in a crash as people look to cheaper options to sell. 

But on the back of a rapid price increase in shares (up 400% in half a year) are their shares really going to do up in a situation where there is a huge house price crash with massive wealth destruction?

It's your money but I wouldn't make the decision on the basis of having "missed out" when you spotted the share price was previously low,

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18 minutes ago, Kosmin said:

Much longer term, Purplebricks may pick up more market share if high street firms go bust.

Yep

Purplebricks are basically applying the Amazon business model. Charge less than competitors, try to make more money on volume. The greater the volume they do, the more they can lower prices, and squeeze competitors further, putting them out of business. I read that Purplebricks have just 3% of the UK market for EA's. When you consider that Amazon have 43% of the e-commerce market, then there clearly exists huge opportunity for Purplebricks and their low cost model. If these guys can execute in the huge US market which they are targeting, then this company could be a 10x from here.

Personally, it's is not for me. I am utterly useless at picking growth companies.

Edited by NuBrit

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If purple bricks become too successful with a market share over 40% then they become a direct rival to rightmove as you can just go to the purple bricks site to find many houses.

At that stage or before rightmove will move into their space with their own hybrid model or insist on "real" non hybrid agents listing on rightmove.

Edited by Fromage Frais

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2 hours ago, ftb_fml said:

Happy for the more experienced share-dealers to shoot me down in flames, however does now not seem a potentially good time to invest in this company?

In the shorter term stagnating transactions and poor affordability currently suggest that in future transaction numbers should increase (more business for all) and if prices fall sellers will likely be looking to limit their sales costs further (a greater market share for cheaper alternatives to traditional agents).

In the longer term it looks like the house-selling model is going the same way as much of retail already has - from bricks and mortar to more cost-competitive online services. Anecdotally I've seen two or three properties come to market locally with Purple Bricks, while previously there had been none that I can remember.

A shrewd longish term buy perhaps?

I sold 20k worth in Jan at 1.4.... I'm no investor. What a tool

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39 minutes ago, Fromage Frais said:

If purple bricks become too successful with a market share over 40% then they become a direct rival to rightmove as you can just go to the purple bricks site to find many houses.

At that stage or before rightmove will move into their space with their own hybrid model or insist on "real" non hybrid agents listing on rightmove.

I think this. 

I also think that traditional agents can be good. I know there are a lot of people on here who think they are dead, but my experience of them 9foir the first time recently) has generally been positive. House sales can be fraught with problems and having a third party with a vested interest between them smoothing over the issues is worth something. 

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It may not be RIghtmove that starts competing with more elbows and teeth - it can't be that difficult for EAs to offer a cut-price service advertising online (which is then taken up by aggregate sites). The potential upside for Purple Bricks (the potential to gain more market share in a buyer's market) isn't likely to outweigh the negative pressures.

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4 hours ago, Fromage Frais said:

If purple bricks become too successful with a market share over 40% then they become a direct rival to rightmove as you can just go to the purple bricks site to find many houses.

At that stage or before rightmove will move into their space with their own hybrid model or insist on "real" non hybrid agents listing on rightmove.

I believe that are some regulatory requirement for estate agents that rightmove circumvent by preventing private individuals from directly listing properties. I'm presuming purplebricks is an actual estate agent and thus already compliant with said regulations, not sure how easy/difficult it would be for them to make the move (sic).

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For what it's worth, I bought a house recently and had a horrible experience (as the buyer!) with a house listed via Purple Bricks - and then was shouted at when I wrote an email to complain. I wouldn't use them.

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All of the properties I've seen in my area that are one with Purple Bricks have been £100-200k overpriced compared with the rest of the local market - they're even more expensive than Foxtons!

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Nope. Wait for the estate agent apocalypse. Plently of time for mayhem once the outrageous agent fees are kiboshed and the property market comes to a standstill after the s24 BTL tax returns next year. Purple bricks will lose share price just because its lumped within the market, I'm sure it will be one of the few left standing in the long run however.

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Can't see why anybody with a bit of planning and foresight could not sell their own home quite easily....nicely designed board, postcard in local newsagents, word of mouth here and there....not difficult surely.;)

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One of the properties near me that fell through was first listed with purple bricks at 100k higher than when it most recently fell through with a high street agent.

Connells has started advertising cut price online only packages. It's much easier for traditional estate agents to move in on purple bricks territory if the market is really there. I would invest in a solvent traditional agent once things properly hit the pan as they are more likely to present a buying opportunity. 

Not an investor I  much of anything these days though. 

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7 hours ago, NuBrit said:

If these guys can execute in the huge US market which they are targeting, then this company could be a 10x from here.

Personally, it's is not for me. I am utterly useless at picking growth companies.

Me too.

These shares will trade regardless to fundamentals much like the FANGs do.If they're going up,they're going up.

7 hours ago, Fromage Frais said:

If purple bricks become too successful with a market share over 40% then they become a direct rival to rightmove as you can just go to the purple bricks site to find many houses.

At that stage or before rightmove will move into their space with their own hybrid model or insist on "real" non hybrid agents listing on rightmove.

RM can't move into being an EA or the EA's will  stop advertising.RM will be toast the day that PB/other online EA's no longer needs to advertise on it.

 

6 hours ago, TheCountOfNowhere said:

Is someone trying to ramp purple bricks share price ?

Market share of f**k all is f**k all.

But it's going up.

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6 hours ago, TheCountOfNowhere said:

Is someone trying to ramp purple bricks share price ?

Market share of f**k all is f**k all.

Come on, be fair now, there is still the name - Purple's gotta be worth something??  perhaps not.

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I have some. I sold some. They've had a nice run but if buying dries up they'll suffer too so be wary. In terms of competition, they will overtake them all.

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Whatever happens I recon the % commission model is dead long term, never really understood the logic of it - its the same amount of work (or lack of) to sell any house.

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10 minutes ago, goldbug9999 said:

Whatever happens I recon the % commission model is dead long term, never really understood the logic of it - its the same amount of work (or lack of) to sell any house.

When house prices collapse the % model will be cheaper than purple bricks :lol: 

 

Like it used to be

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