Hemnet: Monopoly for 9 out of 10 Real Estate Sales in Sweden

• Hemnet, Sweden's leading real estate portal, benefits from a unique market structure where sellers are responsible for marketing costs.
• This direct control over expenses is reflected in the overwhelming presence of 9 out of 10 properties sold on the platform.
• Despite economic challenges such as high inflation and interest rates, Hemnet has been able to significantly increase its revenue through innovative value-added services and a new compensation model.

Individualization and personal responsibility are deeply rooted in Swedish society. Sweden is one of the few markets in the world where sellers rather than brokers are responsible for marketing costs. This gives sellers direct control over their expenses and the opportunity to optimize costs. Hemnet, the dominant real estate portal in Sweden, benefits significantly from this: 9 out of 10 Swedish properties are sold there. A major advantage of Hemnet is that virtually all estate agents list their properties on this website, which means there is no need to switch between different sites.

Despite high inflation and interest rates weighing on the Swedish real estate market, Hemnet is doing extremely well. The company is benefiting from its undisputed monopoly position. Even when real estate offers fell by 20% in one quarter of 2023, Hemnet increased its revenue by 6%. On July 18, 2024, the group announced an increase in sales of over 50% for the past quarter. Although the real estate market recovered slightly, the strong result was mainly due to increased revenue from value-added services per home sold. Property sellers increased their use of paid Plus and Premium packages, which offer additional features and visibility, resulting in significantly higher revenue per listing. The number of listings also increased by 10 %. Hemnet also introduced a new compensation model that allows sellers to pay for additional services and upgrades, increasing the attractiveness and effectiveness of their listings. This model offers multiple options to better market properties.

In terms of the platform's user-friendliness, technological developments and transparency, Hemnet is undoubtedly a world leader. The Swedish real estate market was digitized very early on, and Hemnet has been instrumental in driving this development. Virtual reality could be the next step, and Hemnet is already active in this area too. With a monthly traffic of over 40 million visits in Sweden - 550% more than the next largest provider - Hemnet is the clear market leader among Swedish real estate portals. Hemnet is constantly innovating to consolidate its leading position and meet the changing demands of the market.

The only catch with Hemnet is understandably its high market valuation. The P/E ratio for 2024 is estimated at 72 and is expected to fall to 42 by 2026.

Conclusion: Sweden, as one of the strongest economies in Europe, offers a solid basis for a prospering real estate market. Hemnet benefits from its monopoly position and technological strength, which makes the continuation of a strong and stable upward trend likely.

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