REA Group alternative? The online property powerhouse with ample room to grow

If you’ve bought or sold a property in Sweden, chances are you’ve used Hemnet. Established in 1998 by an association of Swedish real estate agents, Hemnet began as a centralised online listings platform and has since evolved into the country’s default property marketplace. Today, it commands a market position arguably stronger than REA Group in Australia or Rightmove in the UK – an enviable first-mover advantage in a market where network effects are everything.

A dominant platform with deep network effects

Hemnet’s dominance is extraordinary: approximately 90% of Swedish homes sold are listed on the platform – a ratio that is unchanged for five years. The site attracts over 40 million visits per month and delivers 16 times more clicks per listing than its nearest competitor.

These network effects are self-reinforcing. More listings attract more buyers, which in turn draw more sellers and agents, perpetuating a virtuous cycle that makes meaningful competitive inroads extremely difficult. This is especially true in Sweden’s fragmented agency market, where the top 10 brands account for 80% of transactions but operate via hundreds of local franchises.

Navigating a softer market

Sweden’s property market is currently subdued, with listings well below historical averages. For Hemnet, this has a direct revenue impact, as revenue is a function of listing volumes multiplied by average revenue per listing (ARPL). A softer market can also prompt agents and vendors to trial free or lower-cost alternatives such as Booli.

While the possibility of a rival gaining critical mass cannot be dismissed, the probability appears low. 

History shows that breaking the network effects of a leading developed market real estate portal is extraordinarily difficult – in fact, its unprecedented. The reason is simple, as anyone that’s sold their home recently will attest. One’s home is a typically their biggest asset by an order of magnitude. Electing not to list on Hemnet might save you the SEK8k (US$860) listing fee. But if there’s a risk that your home sells for 5% less as a result, costing you SEK150k (US$16k) in lost sale proceeds, there’s a strong chance you will list on Hemnet.

Pricing power – still early in the journey

Hemnet’s most powerful long-term growth driver is its ARPL. Like REA and Rightmove, Hemnet offers a tiered suite of products – Basic, Plus, Premium, and Max – allowing sellers to pay for greater exposure. Between 2019 and 2024, listing prices rose at a compound annual rate of ~35% – rapid by any measure, albeit from a low base. Even now, Hemnet’s take rate is a mere fraction the median house price and compares favourably (ie. lower) to REA in Australia where pricing growth remains strong.

Interestingly, Hemnet now finds itself in the unusual position of being criticised for both being “too dominant” and “not dominant enough.” 

On one side, the Swedish Competition Authority and the Real Estate Agency Inspectorate have raised concerns over the company’s pricing power and its practice of paying commissions to agents. On the other, the equity market has punished the share price in recent months on fears that competitive threats from Booli could erode Hemnet’s market position.

The reality is that neither view tells the full story.

Despite competition, Hemnet’s market share has remained stable, with nine out of ten homes sold in Sweden in 2024 advertised on its platform. At the same time, pricing remains modest relative to other markets and the value ultimately delivered vendors as discussed above. Further, the value captured by Swedish agents still dwarfs that captured by Hemnet, in total contrast to the relative value being delivered to vendors, in our view.

If regulators were to intervene to reduce or remove Hemnet’s agent commission payments, it would in fact drive earnings higher without threatening market share. And while listing volumes are cyclical, history suggests they tend to revert to long-term averages over time, providing a natural tailwind when the housing market normalises.

Strategic levers beyond listings

Although listings remain Hemnet’s core revenue driver, its vast audience remains under-monetised. Management sees significant opportunities in adjacent verticals such as mortgage and insurance lead generation, following the example of peers like Zillow (USA) and Scout24 (Germany). As Sweden’s third-largest commercial website, Hemnet has a unique platform to build high-margin B2B offerings and diversify revenue streams over time.

Valuation and risks

At current levels, Hemnet trades on an FY26 EV/EBITA multiple of 21x – attractive for a highly cash-generative and dominant real estate marketplace with pricing power and a long-term growth runway. 

Key risks include regulatory scrutiny of its pricing and agent remuneration structure, heightened competitive activity from Booli, and the challenge of managing price perception among stakeholders. 

However, history suggests that the network effects underpinning a mature property portal are exceptionally resilient, and sustained market-share loss in such a context would be unprecedented.

The bottom line

Hemnet combines market dominance, latent pricing power, and adjacent growth opportunities with cyclical upside as listings recover in the Swedish housing market. While soft volumes may encourage some to trial free alternatives, the strength of its network effects and stickiness of its audience suggest to us that competitive threats are more noise than signal. 

The long-term investment thesis remains intact: steadily lift ARPL through product upgrades, reduce agent rebates, and leverage unmatched audience scale into new revenue streams.

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