Purplebricks

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There are now just 182 listings remaining on the Purplebricks website.
It's less than a quarter of what remained in July when they still held <a href="https://www.urban.com.au/news/100591-purplebricks-australian-property-listings-shrinks-to-just-800-homes-for-sale-2">800 listings</a>. 
Since then a number of properties have been presumably sold or vendors have ditched the UK-based disruptor for local estate agents.
<img src="https://www.urban.com.au/images/2019/9/13/Tallai%20PurpleBricks.JPG" alt="">
The <a href="https://www.purplebricks.com.au/search/property-for-sale#?q&amp;location=&amp;page=1&amp;searchType=ForSale&amp;sortBy=2" target="_blank">remaining 182 offerings</a> range from around $2.4 at 19 Alawara Drive, Tallai (pictured above), a seven bedroom, seven bathroom house set on 0.82 hectares to $150,000 for 140 Gilmore Ave, Medina.
The 522 square metre Medina, West Australia holding has been for sale since December 2018 with the asking price reduced from $170,000 in August 2019.
According to their website, around 73 agents are still on deck, down from 85 in July.
In early May, Purplebricks Australia announced its intention to exit the Australian market.
Despite the newly-installed CEO Neil Tavender and Kenny Bruce having overhauled the pricing model, so that half the fee was paid upfront and half on completion of the sale, Purplebricks decided to abandon the Australian market.
The pressure on the Australian business was most clearly exposed when it reported an $18 million interim loss for the six months to October last year.
Vic Darvey, the Purplebricks Group CEO said in May that after much consideration it had "made the difficult decision to close the Australian business."
"We’ve been operating here for two and half years and, unfortunately, we have been unable to make the progress in the Australian market that we’ve wanted, despite the tireless efforts of our employees," he concluded.
The Australian branch announced that they would take no further listings in Australia, but intended to finalise all existing agreements.
They announced their decision just a week after UBS said the company was<a href="https://www.urban.com.au/news/98151-purplebricks-not-likely-to-make-profit-in-australia-until-2022-ubs" target="_blank"> not likely to make money in Australia</a> until 2022.
In the month prior to the shutdown it was forecast that Purplebricks would potentially have to close its Australian operations <a href="https://www.urban.com.au/news/97258-purplebricks-australian-estate-agency-may-need-to-be-abandoned-to-save-uk-mothership" target="_blank">to save the UK mothership</a>.
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j.ballantyne1990-6AQqhLzZaK

Purplebricks Australia down to just 182 property listings

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Losses at online estate agent Purplebricks have almost doubled with the UK based firm confirming plans to exit the US market after its previously announced exit from Australia.
It revealed in total, its operating losses in the key US and Australian markets were £52.9 million (A$93m).
"We have taken the difficult decisions to exit our businesses in both Australia and the US as it is very important that we now focus our resources on the UK and Canada, where we have a strong established presence and where there are significant opportunities to grow market share and deliver profitable growth for shareholders," Purplebricks boss Vic Darvey said.
"Both exits will be conducted in an orderly manner with the expectation they will be completed by the end of 2019."
It made a FY19 operating loss of £18.8 million (A$34m) in Australia.
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Purplebricks shareholders were updated today on the cost of its venture into Australia that facing "increasingly difficult market conditions as the year progressed, we changed the management team and business model."
"The board concluded that the prospective returns from Australia were no longer sufficient to justify continued investment and took the decision to exit the market in May 2019."
It has <a href="https://www.urban.com.au/news/100591-purplebricks-australian-property-listings-shrinks-to-just-800-homes-for-sale-2" target="_blank">fewer than 800 listings remaining in Australia</a>, down on the 4500 instructions received in FY2018.
A focused, results-orientated team are on the ground implementing its exit strategy, which is based around an orderly process where we stand by our key obligations and help customers successfully sell their properties.
With the decision to close its Australian business, it expects total losses and closure costs of between £6 million to £8 million in FY 2020.
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The company noted during the two and a half years that Purplebricks operated in Australia, "market conditions became increasingly challenging."
"Despite changes to the business model and the continued hard work and dedication of the team there, we failed to gain the scale needed to succeed.
"Given the market outlook, and size of the ultimate opportunity, the board took the decision in May 2019 to run down and close the business, which will be completed by 31 December 2019.
"A reduced team is in place to ensure a professional wind down of the business and to ensure we continue to deliver great outcomes for our remaining customers.
"Having launched in the US in September 2017, we expanded rapidly into a total of seven states within a year.
"Each state required a significant investment in marketing to underpin the brand.
"Having not seen the revenue growth we had expected, in early May 2019 we put the US business under strategic review, to examine the feasibility of delivering growth in a more effective and cost-efficient manner.
"Having reviewed a number of alternative business models, the outcome of the strategic review was that while there remains a significant opportunity to disrupt the US market, it would take substantially more management time and resources than the Company is able to commit at this time.
"Therefore, a decision was taken to withdraw from the US and either sell or close the business."
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Investment in building its brand in the US and establishing the Australian business led to a group operating loss of £52.3 million (FY 2018 loss: £27.8 million).
The business is supported by a robust balance sheet with a strong cash position, it advised.
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Its mission was to be "THE WORLD'S MOST INNOVATIVE, CARING AND MODERN REAL ESTATE AGENCY THAT HAS OUR PEOPLE AND OUR CUSTOMERS AT THE VERY HEART OF EVERYTHING WE DO. TOGETHER WE WILL NEVER STOP LEARNING, CHANGING AND WINNING."
It hopes to get to 10 percent of market share in the UK and 12 percent in Canada.
The Australian and US startups had been "incredibly distracting," Darvey told a results presentation.
"I don't think we will ever move to no-sale, no-fee. The upfront fee brings to us a motivated seller," he said, while acknowledging the agency would continue to evolve its pricing model.
 
The presentation noted UK commission rates were coming down, although this was only in certain pockets, and no figure was offered.
Rentals provide just 10 percent of the business.
Founded in 2012 by Michael Bruce and Kenny Bruce, it débuted on London's Alternative Investment Market (AIM) in December 2015.
In August 2016 <a href="https://www.urban.com.au/expert-insights/investing/60186-purplebricks-arrives-in-sydney" target="_blank">it launched in Australia</a> and in September 2017 Purplebricks was launched in the US. 
In 2018, the company purchased DuProprio, a Canadian real estate company that offered commission-free real estate services.<a href="https://en.wikipedia.org/wiki/Purplebricks#cite_note-11"> </a>
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jchancellor-FAypfDUnLy

UK disruptor Purplebricks to also exit the US after Australian low commission venture failure

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There are just 800 listings remaining on the Purplebricks website.
It was at around 1000 a fortnight ago, as vendors depart the UK-based disruptor for local estate agents.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/7/29/narre%20warren%20east.jpg" alt="">
The <a href="https://www.purplebricks.com.au/search/property-for-sale#?q&amp;location=&amp;page=1&amp;searchType=ForSale&amp;sortBy=2" target="_blank">remaining 800 offerings</a> range from around $2.9 million to $3.2 million at 30 Boundary Road, Narre Warren East (pictured above), a four bedroom, three bathroom house set on 6.47 hectares to $30,000 for Lot 30 Melvin Terrace, Pinery.
The 1012 square metre Pinery holding has been unsuccessfully offered to market multiple times over the past six years, with the asking price reaching $133,270 from 2014 - 2016.
According to their website, around 85 agents are still on deck.
In early May, Purplebricks Australia announced its intention to exit the Australian market.
Despite the newly-installed CEO Neil Tavender and Kenny Bruce having overhauled the pricing model, so that half the fee was paid upfront and half on completion of the sale, Purplebricks have been forced to abandon the Australian market.
The pressure on the Australian business was most clearly exposed when it reported an $18 million interim loss for the six months to October last year.
Vic Darvey, the Purplebricks Group CEO said in May that after much consideration it had "made the difficult decision to close the Australian business".
"We’ve been operating here for two and half years and, unfortunately, we have been unable to make the progress in the Australian market that we’ve wanted, despite the tireless efforts of our employees."
The Australian branch announced that they would take no further listings in Australia, but intended to finalise all existing agreements.
They announced their decision just a week after UBS said the company was<a href="https://www.urban.com.au/news/98151-purplebricks-not-likely-to-make-profit-in-australia-until-2022-ubs" target="_blank"> not likely to make money in Australia</a> until 2022.
In the month prior to the shutdown it was forecast that Purplebricks would potentially have to close its Australian operations <a href="https://www.urban.com.au/news/97258-purplebricks-australian-estate-agency-may-need-to-be-abandoned-to-save-uk-mothership" target="_blank">to save the UK mothership</a>.
Michael Bruce, the group's founder and chief executive officer stepped down immediately following the announcement with Vic Darvey, previously Purplebricks’ Chief Operating Officer, being appointed to the role of Chief Executive Officer and to the Board of Purplebricks.
While Purplebricks has sold more than 5000 homes since launching in Australia in September 2016, the company was spending about 84c in advertising to generate a dollar of revenue.
The Australian Financial Review has regularly revealed an exodus of estate agents along with allegations of a "toxic culture" within the company.
Over the weekend the London press reported Purplebricks is due to post losses of £51 million.
The Sunday Telegraph advised that the loss, for the 12 months to the end of April, will be unveiled when Purplebricks reports its results on Wednesday.
The ‘underlying pre-tax’ loss compares with £26m for the year before.
According to the Telegraph, the near-double loss comes after a “failed assault” on the Australian market and troubles in its American business, which has been under review.
However, says the newspaper, the company is “theoretically profitable” in the UK.
The founders, brothers Michael and Kenny Bruce, have both left the business.
Michael Bruce, who was also global chief executive, has been replaced by Vic Darvey, formerly managing director of Money supermarket.
The Bruces have sold their shares in Purplebricks to German publishing giant Axel Springer, now Purplebricks’ largest investor with a 27% holding.
Purplebricks shares closed on Friday at 99p, below the £1 launch price back in 2015.
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Purplebricks Australian property listings shrink to just 800 homes for sale 

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EXPERT OBSERVER
Purplebricks’ inability to succeed in the market was not driven by a lack of interest, or fixed fee not being feasible, but instead by their complacency in bringing a foreign model to Australia and assuming it would work without any adaption.
We are confident that Australians want to sell their properties for a fairer price and we have developed a proposition that supports this. In a world where vendors pay less, agents make more and the business is sustainable, everyone wins.
There is a huge appetite for fixed fee and Purplebricks themselves proved it with over 7,000 listings and 5,500 sales in under three years. This is no small feat. In entering Australia however, Purplebricks naively brought in the same model that had proven successful in the UK. It is critical to have a market appropriate version of fixed fee for it to be a success.
In the UK, for example, people are happy to do their own open homes, which is a small, simple thing, but it impacts the process. Here they weren’t transparent about open homes being an extra fee.
Under their scheme, vendors were also liable to pay the full fee regardless of whether the property sold or not. This left no incentive for the business or the agents to actually sell properties. This may work in a booming market, but not in a declining one.
In October last year Purplebricks turned their fee structure around, modelling it on our business, <a href="https://upside.com.au/" target="_blank">Upside Realty</a>, which is purpose built for the Australian market. The fee structure is paid on successfully achieving a sale, as opposed to their all upfront, regardless of success starting point. We see this as just one of the errors that Purplebricks made in expanding to Australia.
In order to grow, Purplebricks attempted to buy the market through huge TV and media spends of over $20m a year which obviously creates a very large hurdle for profitability.
Purplebricks also quoted ‘increasingly challenging’ marketing conditions as a reason for their lack of success, we would debate that the market is an inhibitor for the growth of such a business. Whilst the market conditions have created a lower volume of sales post royal commission with finance tightening, we feel it is ideal for change and disruption but as a company you need to be very tight on execution and be efficient.
Upside is growing quickly with over 650 listings in Sydney and Melbourne and expansions into ACT and Brisbane this month. This is achieved through strong execution, hiring the right agents and living up to our promises. Sustainable growth is key to Upside’s long-term success, we will not compromise on service quality to accelerate expansion. Upside is using technology to bring the price down without impacting service levels, in fact our back-office technology means our agents have more time to focus on each customer and their property. Like Purplebricks, Upside Realty has no commission structure, we offer a fixed fee of $7,500 for private treaty sales and $8,500 for auction.
Adam Rigby is CEO and founder of <a href="https://upside.com.au/" target="_blank">Upside Realty</a> he is also a seasoned entrepreneur and executive with some 25 years founding successful businesses in the digital sector.
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Despite Purplebricks pullout Australians still hungry for fixed-fee agencies: Adam Rigby

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University of Sydney Business School associate professor Jamie Alcock said it was unfortunate Purplebricks had folded in Australia.
“I don’t think it was bound to fail, it was a market ripe for disruption,” Mr Alcock told Domain.
 “The [real estate agent] commissions in Australia are very high by international standards.
“There is a lot of money to be made. 
"It’s not a hugely complex task to sell residential property; a lot of it could theoretically be disrupted through some technological revolution or a new business model.
“When you see large fees and there are no huge technical skills or qualifications required, it’s disruptable.”
The DIY selling platform, forsalebyowner.com.au has offered to hire all 105 Purplebricks agents and migrate their 1400 listings to its online platform for free, after the British-based firm announced its intention to exit Australia this week.
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Australian real estate maket ripe for disruption: Sydney University professor

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GUEST OBSERVATION
The real estate agents of the land will be toasting the departure of upstart disruptor Purplebricks who are packing up and going home to Britain. Crisis over. No more nasty TV commercials playing to a nations’ already healthy distrust of traditional agents.
But it’s not that simple. Real estate agents still rank 27 out of 30 professions in terms of respect and reputation – below politicians and just above car sellers.
Purplebricks lost because they were even worse. They correctly targeted the problem – agents who will do anything to get you to sell your house so they can clip the ticket with fat commissions. A system which inherently mis-aligns incentives between provider and customer. Have you noticed now is always a “great time to sell” regardless of whether the market is going up, down or sideways? Yes, because it’s always a great time for an agent to trouser a healthy commission. Hence why the profession is held in such low esteem by its customers.
Purplebricks was a “disruptor” to use the favourite word from my second home, Silicon Valley. And they correctly belled the cat on the problem with the status quo. But their problem is they replaced it with something worse. You paid them whether or not they successfully sold your house. Now a problem that plagues the industry at the best of times – agents “buying your business” by giving you an inflated idea of what your house will sell for – had no constraints to hold it back. At least a traditional agent has to do what the industry euphemistically calls “vendor management” – talking you back down to the price it will actually sell at or they won’t get paid on commission. Purplebricks didn’t even need to do that – if your property didn’t sell at the (inflated) price they told you it would, they were paid anyway. All care but no responsibility. Indeed, a total lack of responsibility.
Too little too late they changed and near doubled their fee to include a second half that only got paid if you sold. And then they too got in the business of “vendor management” – indeed they had competitions internally to see who could talk their clients down by the largest discount to the original asking price. It wasn’t a good look when that became public!
So, I expect we’ll see a series of triumphant “I told you so” pieces in the real estate industry press celebrating the departure of the young bull and triumph of the old ones.
My counsel, having seen this movie in countless other industries over the last 30 years? Don’t celebrate too hard folks, the voting public still has a huge problem with the real estate industry – its incentives and its ethics. Winter is still coming. Just not quite yet. Not that the current market slowdown hasn’t been hard enough for a commission driven industry.
Amazon was not the first online retailer. Google was not the first search engine. Tesla was not the first electric car. Change will come, but not, as always, without some false starts. No less an authority than MacQuarie Bank – who banks more than half the industry - have told them so at a major conference late last year. Data and digital disruption will come, margins will compress, customers will demand transparency. It’s only a question of when and how those realities come to pass.
And if it’s true in real estate sales, all the more so in the poor cousin of the industry – rental property management. The quiet achiever of the real estate industry has been treated as a cash cow by the sales agents who own the agencies for decades now. It’s the only thing that is keeping many agencies alive in the current downswing.
But the incentives here are also misaligned. If the agent tells an owner they will get an (inflated) rental price for their property in order to secure the business, who pays for the error? The owner – with an empty unlet property until they are also “managed” back to a realistic price. If the agent doesn’t stay on top of their brief and collect the rent from a recalcitrant tenant, who hurts from the error? Not the agent again – the owner.
The message from Purplebricks is clear – the status quo is not OK – the customers are not happy – and just because one “disruptor” with an even more mis-aligned business model than the old guard failed, do not assume winter isn’t coming. It will. The good agents know this and are working on how they can build a sustainable model that is aligned with the interests of their clients. Those who don’t adapt will die. I just can’t tell you when yet.
That’s why some more innovative new participants in the industry are starting to do things differently by genuinely putting owners first, offering guarantees that if agents don’t quickly find a new tenant or collect the rent on time, then the agent, not the owner bears the cost.
Evan Thornley is the co-founder, investor and executive chair of new style agency LongView. 
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jrobinson-rf4aSBido9

Winter still coming for real estate agents despite Purplebricks departure

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"Really they were a dressed up private seller platform that was purported to be something else."
That's the view of REIA deputy president Hayden Groves, who told Ross Greenwood's 2GB last night that the exit from the Australian market confirmed yesterday, was good news.
"It hasn't worked here," Groves said.
Its Australian website had about 1400 property listings.
It had 3,600 verified five star reviews.
"They were really trying to take the real estate agents out of the process of real estate professional transactions, purporting the fact they were real estate agents which was curious.
Groves said in actual fact they were a dressed up private seller platform, pretending to be something else.
"It's great news for consumers of professional real estate services in the country because they were duped by false and misleading advertising by Purple Bricks purporting to be something they're not.
"They were saying that real estate practitioners in the traditional sense were nothing more than commission collectors and not undertaking their role correctly.
"They were saying they were real people and real real estate agents that they were going to be holding the hand of the consumer, seller, client in the selling process the process
"But of course their model, their agents weren't incentivised to get an outcome.
"Effectively these poor consumers, who were expecting something else, were left without any of the proper services and support services they needed to get the job done.
Purplebricks dubbed themselves a low commission agency, having had previous success in the UK property market, they entered Australia just two years ago.
The group sought to disrupt the old fashion way of paying an estate agent commission of between two and three percent of the sale price. 
The saving on a $900,000 sale was put at $11,300, given an all up fee of $8,800.
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There were around 30 agents across New South Wales who will find themselves out of work, and 30 o so in Queensland. 
Purplebricks sponsored House Rules last year, however a cost-cutting measure saw them hand it over to Century21 for the current series.
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The NSW have 240 properties for sale, having sold 1,038 in two years, buoyed by an advertising campaign for listings by the celebrity builder, Barry Du Bois.
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Their revised so-called 'first-class package' was priced at $4,400, which pays for the marketing, with a further $4,400 payment when the sale of the property is successful.
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It was pitched towards typically outer-suburban and regional listings.
Its most upmarket listing was in Vaucluse, albeit a dump, which belonged to the socialite mortgage broker Lizzie Buttrose. 
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Vic Darvey, the London-based Purplebricks Group CEO said after much consideration it had "made the difficult decision to close the Australian business."
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"We’ve been operating here for two and half years and, unfortunately, we have been unable to make the progress in the Australian market that we’ve wanted, despite the tireless efforts of our employees.
"We will take no further listings in Australia, but intend to engage with our customers to finalise all existing agreements.
"This is not a decision we have taken lightly, but with market conditions becoming increasingly challenging, we do not believe that the prospective returns in Australia are enough to justify continued investment."  
Only last week UBS said the company was not likely to make money in Australia until 2022.
It was forecast that Purplebricks would potentially have to close its Australian operations to save the UK mothership.
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Michael Bruce, the group's founder and chief executive officer is stepping down from the business with immediate effect.
 
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Purple Bricks was a 'dressed up private seller': REIA deputy president

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Purplebricks Australia has announced its intention to exit the Australian market.
The decision comes amid the continued advertising campaign for listings by the celebrity builder, Barry Du Bois (below).
Even its revised fixed-fee sales model proved to be problematic for real estate agents, amid the slow down in the housing market.
Vic Darvey, the Purplebricks Group CEO said after much consideration it had "made the difficult decision to close the Australian business."
"We’ve been operating here for two and half years and, unfortunately, we have been unable to make the progress in the Australian market that we’ve wanted, despite the tireless efforts of our employees.
"Our present intention is that, over the next few months, we manage the process of closing down the Australian business in an orderly way, attempting to minimise disruption for both our people and our customers.
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"We will take no further listings in Australia, but intend to engage with our customers to finalise all existing agreements.
"This is not a decision we have taken lightly, but with market conditions becoming increasingly challenging, we do not believe that the prospective returns in Australia are enough to justify continued investment."  
Only last week UBS said the company was<a href="https://www.urban.com.au/news/98151-purplebricks-not-likely-to-make-profit-in-australia-until-2022-ubs" target="_blank"> not likely to make money in Australia</a> until 2022.
Last month it was forecasted that Purplebricks would potentially have to close its Australian operations <a href="https://www.urban.com.au/news/97258-purplebricks-australian-estate-agency-may-need-to-be-abandoned-to-save-uk-mothership" target="_blank">to save the UK mothership</a>.
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Michael Bruce, the group's founder and chief executive officer is stepping down from the business with immediate effect.
 In turn, the Board has appointed Vic Darvey, previously Purplebricks’ Chief Operating Officer, to the role of Chief Executive Officer and to the Board of Purplebricks.
Vic joined Purplebricks in January 2019.
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Purplebricks quits Australia after low commission model fails

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Leading investment bank UBS has predicted that shares in Purplebricks, the international low commission estate agency, will soon hit £1 each, the price at which it floated in December 2015.
In May last year its shares were trading at £3.54p but are now exchanging hands at £1.33p.
It suggested the company will have to borrow another £100m ‘soon’ to fund its mounting group losses.
UBS has based its prediction largely on the worsening position for Purplebricks in Australia, which the investment bank claims will not break even until 2022, three years later than expected, while its US operation is not likely to break even until 2025.
The investment bank says it expects Purplebricks’ Australian operation to generate revenues of £26 million next year on which it will make a loss of £12 million, while the company’s US operation could lose £53 million.
“Operations in Australia and the US are characterised by having very limited visibility on the businesses’ development and break-even horizon – Australia keeps being postponed and losses in the US are expected to worsen”.
Referring to Purplebricks’ recent decision in Australia to alter its up-front model to a more traditional post-sale fee one, UBS say the move “raised concerns about the future of online agents and the upfront fee model”.
UBS is also concerned that parts of both Australia’s and the UK’s housing market are experiencing tough conditions at the moment, claiming that Purplebricks’ operation has lost momentum.
Purplebricks share price has been falling for the past 12 months. 
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Purplebricks, which launched in Australia in 2016, recently opened operations in the NSW Central West by appointing an agent in Bathurst, David Chapman. 
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Chapman started his real estate career in 2012 with First National Real Estate, then was the co-owner of LJ Hooker Bathurst, moving on to Century 21 Bathurst and then leaving the industry in 2017. 
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Chapman told the local paper that Purplebricks "was the fastest growing real estate brand in Australia."
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Purplebricks not likely to make profit in Australia until 2022: UBS

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The cut-price online estate agency Purplebricks may have to abandon its struggling Australian operation to survive in the United Kingdon, analysts at investment bank Berenberg have warned.
Berenberg slashed its share price forecast for the embattled company from £4.70 to 80 pence.
It switched its rating from "buy" to "sell", sending the stock into an 8.4 per cent tailspin on the British share market on Friday.
The Financial Times reported: "It was more bad news for Purplebricks as Berenberg analysts turned sharply bearish on the online estate agent."
The analysis by Berenberg suggests Purplebricks is “running out of steam” in the UK.
However Purplebricks hit back saying it is looking to boost the business in Australia.
Investment bank Berenberg also said the company might have to quit the US to survive in its core British market.
"Having flown too close to the sun, with operations in five countries and cash burn of circa £7 million [$12.9 million] a month, we believe the group will be forced to seek additional equity at a significant discount or a doubtless expensive debt facility; or to abandon the Australian and US operations and retrench to the UK and Canada," the German private bank said in a note to its clients.
But Vic Darvey, the London-based group's global chief operating officer, rejected the analysis, reaffirming that Purplebricks was committed to the Australian market.
"Our transformation over the last six months is bearing fruit, and we are pleased with the recent growth in instructions and sales," he told The Australian Financial Review.
"Recently, we have boosted our agent numbers and expanded to new regions, bringing our proposition to more Australians."
Darvey joined the firm in February from MoneySuperMarket.com with experience of tech-focused, customer-centric businesses.
Purplebricks shares closed at 129.6 pence on Friday, down about 75 per cent from a mid-2017 high point of about £5.13.
The company's current bout of share price doldrums began in February, when it cut its revenue forecast.
One of the agency's co-founders, Michael Bruce, is now running the US business full-time, having previously divided his time between there and Britain. Meanwhile, his brother Kenny Bruce has only just returned from Australia to focus on the British business.
"In our view, the limitations of the upfront fee model are being laid bare," according to the Berenberg analysts' note which joined other analysts in questioning the business model.
"In our view, the limitations of the upfront fee model are being laid bare and the addressable market is proving much small than initially hoped," the Berenberg analysts said.
In Australia, the newly-installed CEO Neil Tavender and Kenny Bruce have overhauled the charging model, so that half the fee is paid upfront and half on completion of the sale.
"While the local market has softened, the fixed fee model continues to be an attractive proposition for sellers who want to maximise their returns," Mr Darvey said on Sunday.
The pressure on the Australian business was exposed when it reported an $18 million interim loss for the six months to October.
While Purplebricks has sold more than 5000 homes since launching in Australia in September 2016, the company now spends about 84c in advertising to generate a dollar of revenue.
The Australian Financial Review has regularly revealed an exodus of estate agents along with allegations of a "toxic culture" within the company.
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