REA Group has released its half-year financial results with the data reflecting a surge in listings along with record visitor numbers that saw the realestate.com.au emerge as Australia’s seventh largest online brand.
Revealing their results on Friday, the group noted national residential listing numbers increased 17 per cent on realestate.com.au in the first half of this financial year.
This included an 11 per cent increase in the first quarter, then a 22 per cent increase in the second, which both followed a 54 per cent increase in the final quarter of 2020/21.
Melbourne led the charge with a 43 per cent increase in listing numbers for the half-year, while Sydney’s listings increased 14 per cent.
On average, the site received 128.8 million visits per month, which was a 12 per cent increase year-on-year.
In October 2021, the site also hit a record at 145.4 million visitors.
Meanwhile, 12.6 million people visited each month on average with a record 13.2 million in October, which the group explained equated to 65 per cent of Australia’s adult population.
The data also revealed a 42 per cent year-on-year increase in buyer inquiries, a 24 per cent increase in active members and a 53 per cent increase in active property owner tracks.
REA Group Chief Executive Officer, Owen Wilson said, together, this contributed to realestate.com.au becoming Australia’s seventh largest online brand.
“realestate.com.au remains the clear leader in online real estate and we continued to consolidate audience engagement during the half,” Mr Wilson said.
“Holding the largest and most engaged audience of property seekers is core to our success, and the level of demand from the 12.6 million people visiting our site each month helped drive a record number of buyer inquiries.”
In financial terms, the rise in listings saw residential revenue for realestate.com.au increase 31 per cent to $387 million for the half-year.
Commercial and developer revenue also increased during the period, rising 7 per cent.
realestate.com.au’s performance helped underpin strong results for the REA Group throughout the first half of the 2021/22 financial year.
The group announced a revenue increase of 37 per cent to $590 million, an increase in EBITDA (earnings before interest, taxes, depreciation, and amortization) of 27 per cent to $368 million, and an increase in net profit to $221 million.
“Revenue growth was underpinned by increases in all major lines of business, including a 31 per cent increase in Australian residential,” the group noted in their announcement on the Australian Securities Exchange (ASX).
“This reflected a strong market recovery despite the impact of Melbourne and Sydney lockdowns in the first quarter.”
The group’s half-year result also included the consolidation of REA India from 1 January 2021 and Mortgage Choice from 1 July 2021.
“Excluding the impact of these acquisitions, core revenue increased by 25 per cent, EBITDA including associates increased by 27 per cent, and NPAT (net profit after tax) was up 33 per cent.”
Commenting on the half-year results, Mr Wilson described them as “exceptional” and said the business continued to successfully navigate the impacts of the pandemic.
“As anticipated, the removal of COVID restrictions saw a wave of new listings on realestate.com.au, with sellers making up for the time lost in lockdown and taking advantage of the significant buyer demand,” Mr Wilson said.
“Combined with record take up of our premium listing products in residential and commercial, we delivered very pleasing revenue growth.
“Our flagship site realestate.com.au continued its position as the number one address in property. In October, a record of 145.5 million visits to realestate.com.au were achieved and the site has grown to be Australia’s seventh largest online brand.”
Elsewhere, the group also achieved growth.
Media, data and other revenue grew 14 per cent during the half. Data revenue increased 23 per cent, primarily driven by PropTrack, while media revenue increased 15 per cent.
Other revenue, which REA Group explained was primarily flatmates.com.au, declined year-on-year.
In the financial services side of the business, revenue increased 24 per cent to $41 million on a ‘pro forma’ basis that assumed REA Group had owned Mortgage Choice in the year prior.
“Revenues benefited from a 39 per cent increase in settlements, driven by continued broker network growth and increased productivity in a buoyant housing market, partly offset by higher broker payout ratios,” the REA Group announcement stated.
In terms of international investments, REA India delivered a solid performance during the half, with revenue growth of 125 per cent to $24 million.
REA Group also has a 20 per cent stake in Move, Inc. which operates North American property portal realtor.com, and revenue from that investment increased 19 per cent.
In southeast Asia, REA holds an 18 per cent stake in PropertyGuru, which contributed an equity accounted loss of $4 million over the half-year to the group’s core EBITDA.
Looking to the future, the group said residential property market conditions remained positive, with high levels of buyer demand, underpinned by the increased supply of late 2021.
“January 2022 national residential new listings were up 14 per cent year-on-year, with Sydney listings increasing 19 per cent and Melbourne up 5 per cent,” the group stated.
“Year-on-year growth rates are expected to slow in the second half compared to the first half as we cycle very strong prior period listing volumes.
“Other factors such as the federal election and potential regulatory measures to slow house price inflation could also negatively impact listing volumes.”
Mr Owen said REA Group had emerged from a disruptive year in “excellent shape” and expected favourable market conditions to continue into 2022.
“While COVID and the Federal Election may throw some curveballs, the effect on our market should be temporary,” he said.
“We are excited about new products scheduled to enter the market this year as well as the excellent progress we have made with our adjacent businesses.”
