The Covid-19 crisis has brought with it a withdrawal of advertisements from agencies and real estate, main source of income for these portals. It arrives at the Encinar company with Apax in the starting position

Foto: Photo: E. Villarino.
Photo: E. Villarino.
Ahead of

The crisis of Covid-19 has put in check one of the most successful business models in recent times: the websites of advertisements for the sale and rental of homes. These companies, whose maximum exponent in Spain is Idealista, followed by other competitors like Fotocasa and, They base the bulk of their income on the service they offer to real estate agencies and agencies by advertising them on their 'sites’ and, Besides, being able to do it in the most visible positions.

However, he stoppage of operations which has brought with it the declaration of the state of alarm and the forecasts of the fall in GDP and the unemployment rate for 2020 (-8% and 20%, respectively, according to the IMF) They have unleashed a leak from these advertisers. These are increasingly choosing to advertise only through their websites or in a single portal, when until now it was common for them to appear in several.


A situation that, Besides, in the specific case of Idealista, comes at a critical time for the company, since for months its main shareholder, Apax Partners, is analyzing the sale of 80% of the company, job in which you are being advised by Bank of America y Morgan Stanley, as published by this medium last February.

With an income close to 90 millions, Apax plans go through reaching a Rating, at least, 800 millions, figure that would allow you to quintuple your investment, but now faces the challenge of an unexpected and sharp drop in income due to the coronavirus and, what is more dangerous, the threat that it may reach question the business model, since the entire real estate sector is immersed in an aggressive commitment to technology, artificial intelligence and Big Data that constantly illuminate new companies.

Fernando and Jesus Encinar. (Mounting: Carmen Castellon)
Fernando and Jesus Encinar. (Mounting: Carmen Castellon)

As an example of the challenge that Idealista faces, button Casafari, ‘startup’ that has developed a platform that collects all the market announcements, both from portals and agencies, and that have been screened and followed for five years. During the alarm state month, in Madrid, this tool has identified 87.018 ads in total. Of these, 920 they have risen price, 4.087 they have lowered it, 24.132 they're new, 99 have been reserved, 59 sold and 57.721 appear as unavailable.

"This does not mean that they have been withdrawn from the sale, rather, the agencies are removing their ads from these portals and leaving them only on their own websites or in a single portal, that's why they appear as not available in others ", Explain Sergio Obregon, Head of Casafari in Spain.


“You have to differentiate between the removal of ads and the removal of real estate. There are houses that run several agencies, and if any of them remove their ads, does not mean that these homes disappear from the database, because they continue, but announced by other professionals. With the Covid, there have been clients who have temporarily withdrawn their portfolio and their ads are not visible”, recognize from a great portal, that asks to safeguard anonymity.

The impact that the virus may have on the ‘Idealist model’ It will be a function of both the scope of the economic crisis and the limitation of movements, in other aspects. However, in the specific case of the company founded by Jesus Encinar, in his favor he plays being the leader and having already overcome two crises in the past: the 'dotcom’ early century, that exploded in its beginnings, and the financial-real estate of a decade ago.

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