REA Group to hike property listing prices

News Corp-controlled real estate giant REA Group is planning to introduce a double digital price increase for real estate agents that list properties on its website, in a bullish attempt to recognise the value it believes it provides customers.

Multiple media sources, who spoke anonymously because they aren’t authorised to speak publicly, said the group will propose increases of between 10 and 18 per cent to real estate agents later this month. Rival real estate group Domain, which is part owned by Nine Entertainment Company, publisher of this masthead, is also expected to introduce material price increases before July 1. Domain declined to comment.

Sources said REA Group will increase property listings prices by up to 18 per cent.Credit: Peter Rae

REA Group’s chief customer officer, Kul Singh, said the company’s online audience had doubled in the past three years. In February, REA Group said it had an average unique monthly audience of 12.1 million.

“This audience generates the most and the highest quality leads, with many customers commonly reporting we deliver seven to eight out of every 10 enquiries they receive,” Singh said.

“The price change varies depending on the different products our customers choose and the region they operate in. Our pricing structure reflects the ongoing investment in new products, services and features, as we continue to deliver the greatest return on investment for our customers.”

The new proposed price hikes will be the highest since the COVID-19 pandemic, and could increase premium listings by as much as $500 in major cities such as Sydney and Melbourne. REA’s premier product costs about $2,700 per listing in high-end suburbs in Sydney and about $3,400 in similar areas of Melbourne, according to sources familiar with the prices.

In other markets, such as the Gold Coast, it currently costs about $2,400 to list a property. These prices do not include additional products such as premier plus or audience maximiser.

Increasing listing prices is not unusual for REA Group, but the size of the proposed increase is bullish compared to previous years.

Real-estate sources said any price increases across Domain and REA Group are an attempt to financially benefit from an improvement in the products and technology and growth of audiences. But they also coincide with inflationary pressures that are hurting profits.

In February, REA Group’s chief executive Owen Wilson said that interest rate rises would not impact his business, despite rates and inflation contributing to a 9 per cent fall in profit to $201.6 million in the last three months of 2022. The group increased revenue by 5 per cent to $617.3 million in the second quarter, which Wilson said came from a rise in premium products and a 6 per cent price increase, which was rolled out last July.