REA points way to home listing surge in 2025 as interest rates ease

The residential property market could see another rise, with cities outside Sydney and Melbourne to see the biggest shifts.

REA Group chief executive Owen Wilson.

Digital advertising company REA says Australia’s residential property market is in a healthy state, with strong demand across the nation being driven by high levels of employment and immigration, as it turned in a 24 per cent lift in full year underlying profit to $461m.

The company said the supply of homes for sale was also strong, with sellers confident in the level of demand and properties on the market selling quickly – well below the six-year average on its market-leading realestate.com.au site.

REA chief executive Owen Wilson said that with interest rates expected to stay at current levels until the first half of the next calendar year, a stable market and positive fundamentals, confidence should remain as tax cuts worked through the economy – and could even increase.

“Once we turn the corner into next calendar year, we’re probably going to be sitting in a market where everybody’s expecting rates to fall,” Mr Wilson said.

“That’s going to create that situation where buyers are willing to get in, knowing that their interest rate risk is probably very low in the short term.”

Mr Wilson said the company’s residential business performed exceptionally well.

The high level of demand was giving vendors confidence to bring their properties to market, he said, and they were moving to REA’s premium products.

In July, national residential listings were up 12 per cent year-on-year, with Sydney increasing 12 per cent and Melbourne listings up 15 per cent, in a sign that the two capitals are leading the way.

But adjusted for the length of the month, like-for-like growth was 2 per cent and growth rates for the remainder of the financial year will reflect very strong prior period listings volumes, particularly for Melbourne and Sydney.

Mr Wilson said Sydney and Melbourne tended to lead the Australian market, and the company was now seeing very strong listings growth in Canberra and Brisbane.

“I think what you’re going to see over the course of this financial year is those other capitals start to follow what Melbourne and Sydney did last year and have strong listings growth,” he said. He predicted the two leaders would perform well this year, with listings staying at similar levels and the rest of the country rising.

REA, which is majority-owned by News Corporation, publisher of The Australian, is also reaping the benefits of an average 10 per cent price increase in its highest penetrated product, Premiere+, as customers seek to differentiate listings.

REA’s core operations generated revenue growth of 23 per cent to $1.45bn, and an increase in earnings before interest, taxes, depreciation, and amortisation excluding associates of 27 per cent to $825m. Headline net profit slipped 15 per cent to $303m, reflecting the impairment of Asia-based PropertyGuru last December and other one-off impacts.

REA will pay a final dividend of $1.02 per share, fully franked, up 23 per cent year on year. Its shares rose 6.8 per cent to $202.36 on Friday.

REA India had strong momentum with revenue growth as customers increased their usage of the company’s products, and it continued to benefit from investment in its app experience, with significant app audience growth.  In Australia, REA has top sites realestate.com.au and realcommercial.com.au, data business PropTrack and mortgage broker Mortgage Choice. Core Australian revenue lifted 22 per cent to $1.35bn, which included the CampaignAgent business.

Mr Wilson said the site was providing highly personalised consumer experiences to drive loyalty and strengthen the quality of its audience across each of its platforms, and it has extended its audience leadership to 4.6 million people.

“Alongside healthy market conditions, this focus supported robust growth in both seller leads and buyer inquiries, increasing the value we delivered to our customers,” he said.