REA Group surfs the real estate market as incomes rise

“We think that might slow some of the demand this year, but it’s probably not unhealthy. Demand has been higher than supply for some time now so you will see a slight dip in house prices, but overall the fundamentals are still very sound.

REA, which is majority-owned by News Corp, benefited from a booming housing market in the third quarter, posting 23% revenue growth as listings continued their post-COVID-19 recovery.

REA Group posted revenue of $278 million for the three months ended March 31, as earnings before interest, taxes, depreciation and amortization climbed 23% to $155 million. National registrations were up 8% for the quarter, led by Melbourne which was up 14%. Sydney was up 6%.

Property listings reported by the REA in April were down 8% nationwide year-on-year, helped by the Easter and ANZAC holiday period, with Sydney down 19% and Melbourne , 18%.

National lists are expected to decline in the fourth quarter, reflecting the very strong previous period and the potential effects of the federal election.

Mr Wilson said the housing market had yet to see a drop in listings following the federal election, but said it could happen closer to the May 21 vote.

“Any impact from the election is really just a carryover to a later period – we don’t expect any long-term impact,” he said.

Mr Wilson hailed Labour’s share purchase assistance scheme, noting that any policy helping first-time home buyers to enter the market is welcome.

“Where I really think it helps the market is that these types of policies tend to drive new homes being built,” he said.

“So increasing the supply of stock in the market is a good thing for everyone.”

Mr Wilson said the REA group supported stamp duty reform but was not convinced it was on the political agenda at the moment.

“It would create so many efficiencies in the economy, but neither side of our federal politics is talking about it and most state governments have been silent about it as well.”

REA Group is confident it will post a strong result for the full year, and Wilson said any volume headwinds in the fourth quarter would be offset by growth in the data and services business. financials of REA.

“The rest of this quarter will be good. As we enter FY23, the quoting environment will remain healthy, likely at the levels we are at this year, and will be complemented by some of the other strategies we bring to market. »

Mr Wilson also noted that the REA Group had recently launched a new online website called property.com.au which would provide users with property information, valuation, transaction history, schools, public transport and cafes and restaurants.

Separately, News Corp’s Foxtel business saw lower third-quarter revenue, undermining efforts to tip the ASX’s boards as profits from the pay-TV business also fell.

The Foxtel Group had generated a lot of noise in the local market as it pursued a limited window of opportunity for a run at the ASX. However, according to News Corp sources, the pay-TV player has delayed listing until later in the year due to market volatility and fears that the luster in the streaming market will fade then. that Netflix attracts subscribers.

A decline in revenue and profit in the third quarter through March 31 also explains the move, with revenue from News Corp’s subscription video services business, which hosts Foxtel, falling 6% to $494 million ( $694.7 million). Earnings before interest, taxes, depreciation and amortization also fell 13% to $79 million. Foxtel’s revenue on a constant Australian currency basis increased 1% as the US dollar’s decline was due to currency fluctuations. Foxtel’s total number of paying subscribers stood at 4.3 million.

Penny D. Jackson