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Domain records strong financial year results

Significant growth in Domain’s residential online business, including a 9 per cent jump in listings, has underpinned the group posting revenue of $357 million for the 2021-2022 financial year.

The revenue marks a 23.2 per cent increase on the previous financial year and includes a net profit of $55.3 million, which is a rise of 46 per cent year-on-year.

Net profit after tax sits at $35.1 million, while earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 21.4 per cent.

Domain Chief Executive Officer Jason Pellegrino said the group had recorded growth across every sector of the business.

“This started with our residential online business, which is a business that generated $240 million of our $357 million total revenue last year,” he said.

“That’s driven by a 9 per cent increase in listing volumes over that year and on top of that, a 14 per cent increase in what we call controllable yield, which is price increases in our products that agents have stepped forward and incorporated, as well as a record number of agents stepping up and taking more premium depth products.”

Mr Pellegrino said it was particularly pleasing to see significant product takeup growth outside the traditional Sydney stronghold, with impressive growth in Victoria and Queensland for platinum products, followed by substantial gains in gold and silver tiers in South Australia and Western Australia.

“We reach over 8.5 million Australians each month across the Domain platform… but we’re not just about raw scale,” he said.

“Sending a lead to an agent of someone who’s actually not looking to actively acquire a property or sell a property is worse than useless.

“It engages the agent in a useless piece of activity and an agent’s time is the most valuable thing to them. 

“So one of the most amazing things over the last three years is we’ve increased materially, the quality of our audience.

“So our audience that sits there is 39 per cent more likely than the Australian national audience average to have purchased a house in the last 12 months and 65 per cent more likely to purchase a house in the next 12 months.”

Mr Pellegrino said the group was also expanding into three property-adjacent segments using its data, insights and assets.

He said revenue for the Agent Solutions arm of the business increased 67 per cent in the 2021-2022 financial year, including the contribution from the acquisition of Realbase in May.

“This helps agents with efficiency, with productivity, and with compliance,” Mr Pellegrino said.

“We want them to be doing today’s tasks in half the time.

“We want to free them up from the admin and compliance burden that locks them into low value activities, so that they can really spend their time on the highest value activity, which is fundamentally managing the emotions of buyers and sellers through the scariest transaction that they are ever likely to do in their life.”

Mr Pellegrino said Domain was also building a strong property data business that not only supported agents through Pricefinder, but aided governments with land valuation, and how and where to provide local community services.

Property Data Solutions revenue increased 35 per cent with solid underlying growth of 13 per cent from Pricefinder, APM and the contribution of Insight Data Solutions.

“Finally, we’re building a mortgage business at scale that’s a business that’s going up 69 per cent year-on-year in terms of the revenue that business has driven,” Mr Pellegrino said.

Looking forward, Mr Pellegrino said listing growth was still positive compared to the previous year but the market was shifting.

“We have clearly seen a tempering in the buyer demand balance,” he said.

“Six months ago there was a surplus of demand and a lack of supply and that really drove prices up at a fast rate and drove down time on market and time on site.

“Right now that is tempering and it’s moving to a much more balanced buyers and sellers’ market. Buyers are being more realistic, they’re not being driven by FOMO, and sellers are being more realistic around pricing too.

“We are seeing prices come off.”

But Mr Pellegrino stressed the drop in prices needed to be considered in context.

“In places like Sydney, where prices were up 30 per cent year-on-year, the sort of most hawkish market predictors are calling for those prices to sort of come down, peak to trough, around 20 per cent,” he said.  

Domain’s market outlook for the 2022-2023 financial year showed costs, excluding the impact of acquisitions, were expected to rise in the low double digit range from the 2021-2022 financial year base of $226.7 million.

The full year expense impact of the IDS and Realbase acquisitions, which are expected to add about $27 million to ongoing operating expenses, will also be seen in the 2022-2023 financial year.

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Kylie Dulhunty

Kylie Dulhunty is the Editor at Elite Agent.