Interest rate uncertainty and subdued listing numbers have contributed to REA Group posting a decline in third-quarter revenue and earnings.
The online listings company released its third-quarter financial results today, showing a decline in revenue of 3 per cent to $269 million, due to the challenging macroeconomic environment.
EBITDA (earnings before interest, taxes, depreciation and amortisation) also fell 13 per cent to $136 million.
However, for the nine months ended 31 March, 2023, revenue is up 2 per cent year-on-year and EBITDA, excluding associates of $495 million, has decreased 5 per cent.
REA Group Chief Executive Officer Owen Wilson said the tough market conditions in the March quarter had partially been offset by continued strong revenue growth in India, which rose 63 per cent, year-on-year.
“While interest rate uncertainty continued to impact the Australian property market, conditions have improved with the stabilisation of house prices and more vendors returning to the market,” he said.
“The movement in listings reflects the strong listings environment in Q3 last year, prior to the commencement of the interest rate increases.
“The strength of REA’s premium product offering and audience continued to support revenues, and our Indian business delivered exceptional growth.”
National listings declined 12 per cent during the quarter, with Sydney listings down 20 per cent and Melbourne dropping by 18 per cent.
Mr Wilson said REA Group’s flagship site, realestate.com.au, had maintained its market leadership position with 11.9 million people visiting the site each month, on average.
Realestate.com.au had 125.1 million average monthly visits, which equates to 59 per cent of Australia’s adult population.
Year-on-year the number of active members increased 16 per cent, while the number of active property owner tracks rose 51 per cent.
“Our strong audience metrics deliver unrivalled value for our customers and demonstrate the underlying strength of the property market,” Mr Wilson said.
“The launch of our realEstimate campaign, powered by PropTrack data, significantly increased active property owner tracks helping consumers understand their property value.”
Mr Wilson said property prices had stabilised in recent months as a result of limited supply, increasing international migration and strong underlying demand.
But listing volumes remain subdued, impacted by the uncertain interest rate environment.
Nationally, new listings were down 24 per cent in April, year-on-year, with Sydney listings falling 25 per cent and Melbourne dropping 22 per cent.
“Lack of supply and interest rate uncertainty have caused some vendors to sit on the sidelines, but we expect this to improve given strong demand, positive price sentiment and increasing confidence that we are near the peak of the rate cycle,” Mr Wilson said.
“We continue to invest in the products and experiences that drive value for our customers and we are well positioned for future growth.”