Website turns in first profit for real estate body

The Real Estate Institute has stemmed big losses on its website, which has made a profit this year for the first time since it was launched almost a decade ago.

The institute's annual report shows a turnaround of almost $1 million on its financial position in the March year, much of that attributed to curbing losses on the RealENZ website.

In the March year, the institute had an operating surplus of $332,397 and a net profit of $277,537, compared with last year's $623,370 operating deficit and $352,515 loss.

Website RealENZ generated a $48,000 profit, compared with last year's $561,515 loss.

But institute executive director Boud Hammelburg warned against complacency.

"We face a major challenge in the coming year, as RealENZ faces increasing competition in the online property listings market," he said.

The website began operating in 1996. It holds 62,000 residential, rural, commercial, industrial, rental and business listings.

The institute plans to upgrade and enhance it, budgeting $320,000, of which $140,000 was spent in the March year. The remaining $180,000 will be spent by September 30.

Competition in online property listings galvanised the institute's resolve to develop a much-needed promotional campaign for the web- site, the annual report said.

Closing submissions were being made yesterday in the High Court at Auckland over a $1 million claim against the institute by property data information service RPNZ.

The institute has made no contingent liability provisions in its accounts for the claim.

"The outcome of this claim is uncertain at this time and so no provision has been recorded in the financial statements," the institute said.

The institute has 10,293 members, up on 9813 in the March 2004 year and says it is taking a more aggressive approach to improve industry participation by all certified salespeople.

The industry employs 16,607 salespeople.

The institute holds $1.8 million net tangible assets in its fidelity fund, in trust for future claims that might arise. No claims were paid out from the fund in the current year.

The last high-profile claim was around 2001 when, in a rare move, the institute called on its fidelity fund and paid about $100,000 to landlords whose properties were under the failed property management business, Platt.

The institute's Industry Training Organisation was started in May last year and is responsible for establishing and maintaining qualifications requirements. It generated a $6816 net profit.

The institute holds $4,523,625 accumulated funds, compared with $4,191,228 last year.

Its land and buildings at 29 Gillies Ave in Newmarket and 202 Parnell Rd, and its furniture, fittings and computers had a book value of $4 million.

But it said it could benefit from the rising property market.

"Given the current real estate market conditions, we suspect the real value of these assets is obviously significantly greater than their carrying value."