Growth driven by higher seller confidence and increased product demand
Digital real estate advertising company REA Group posted strong financial results for the first quarter of fiscal year 2025, supported by robust listing activity and increased demand for its products.
The company, which owns mortgage broking franchise Mortgage Choice and property data services provider PropTrack, reported a 21% year-on-year increase in revenue to $413 million, while EBITDA excluding associates rose 23% to $243 million.
Operating expenses rose 19% year-on-year to $170 million, while free cash flow increased by 16% to $74 million.
REA Group chief executive Owen Wilson (pictured above) attributed the strong Q1 performance to high seller confidence and a robust listings environment, which provided buyers with more choice and helped moderate house price growth.
“In this healthy market, we hit new audience records, and our customers increasingly leveraged our premium products to differentiate their properties,” Wilson said.
REA Group’s core Australian business saw a 20% rise in revenue, driven by gains in both the Residential and Commercial sectors. Excluding the impact of the recently acquired property technology company Realtair, Australian revenue increased 19% year-on-year.
In the residential segment, revenue rose by 23%, with buy-side revenue boosted by a 15% increase in yield and 7% growth in new listings. Rent revenue was also up, supported by an 8% average price rise and an increase in listing volume.
Commercial revenue grew as well, driven by a 12% average price rise and higher listing depth, although growth in developer revenues was more subdued due to an 11% decline in new project commencements.
The company’s media, data and other segment also saw revenue growth, despite some offset from lower PropTrack and programmatic display revenues. CampaignAgent, a financing service for property campaigns, reported strong revenue growth due to increased customer use and higher adoption rates.
Financial Services revenue increased on the back of a 5% rise in settlements and greater penetration of higher-margin white-label products.
Looking ahead, Wilson expressed confidence in REA Group’s market position, noting the potential impact of anticipated interest rate cuts, steady employment levels, and population growth. He highlighted October’s near-record listing volumes as evidence of the ongoing momentum in the property market.
“As we move further into FY25, it’s clear that the Australian property market remains in good health,” Wilson said. “This significant market activity, combined with the strength of REA’s audience and product suite, continues to position our business strongly for future growth.”
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