Rightmove will need to increase revenue with its “long tail of smaller agents” every year until 2022, a new report has said.

It adds that this is “very achievable”.

Rightmove emerges as the top pick in the analyst’s report into global property portals.

The study, by William Packer of Exane BNP Paribas, gives Rightmove an ‘outperform’ rating and sets a target price for its shares at 560p. Yesterday, the shares closed at 487p.

Exane says that it expects Rightmove to sustain its dominant share of traffic, underpinning pricing power as a lead generator and being the marketing platform required by vendors.

The report rates Australia as the best property portal market in terms of dominance, products, and services for vendors, followed by the UK. The two have respective scores of 129 and 106.

Trailing are the US, Germany and France with scores of 78, 61 and 57.

The Germany and French markets “suffer” from private listings, while in America there are third party vendor lead-generation services.

Packer’s report also delves into the rise of online agents, saying that this is not a UK-specific dynamic but a challenge across the globe.

“We in fact argue that the UK’s low fee levels, listing exclusivity and low private listings share actually limit the long-term risk to traditional agents in the UK from online players, while the risks in Germany and France are under-estimated,” the report says.

Nevertheless market share of online agents is higher in the UK, at around 7% according to 2017 transactions, than elsewhere.

In France market share is about 5%, and in Germany, Australia and the USA about 1%.

The report is also interesting about the different traditional property markets.

In the UK, as in Australia, there are low levels of private sales and lettings. However in the UK, there are low legal requirements for agents; low commissions; and a comparatively high online agent share.

There is also relatively high home ownership, at 63%, compared with Germany at 53%.

An estimated 99% of all transactions in both Australia and the UK are via agents (95% in America).

But in France and Germany, 40% and 42% respectively of sales are private.

Packer does identify the rise of online agents as a risk to the long-term growth of portals across the globe. He says that at sufficient scale, there would be fees deflation – making it harder for portals to drive advertising growth.

There could also be branch closures, which could impact portals. A large online agent could also limit portal pricing power and demand big discounting.

Packer’s report specifically picks out Purplebricks and its implications for Rightmove.

It expects Purplebricks and Rightmove to maintain their current relationship for the foreseeable future.

The report predicts that in the UK, traditional agents’ market share will fall to 88%, with Purplebricks having 8% of the market and other online agents 4%.

It also predicts that in the UK, overall fees will stabilise at around 1%, as the pricing gap with online agents closes.

High street agents will continue to reduce staff headcount, the report predicts, and branch numbers will fall, while weaker agents will go bankrupt.

The report forecasts a 6% drop in the number of agents by 2022, and a 13% fall in the traditional commission pool.

Despite this, the report forecasts that “Rightmove will continue to drive healthy revenue growth amongst its traditional agency customer base despite challenging operating trends.

“We forecast Rightmove to rise from c25% of current marketing spend towards c40% by 2022.”