REA Group says market contraction to blame for drop in realestate.com.au agent numbers as profits rise 29%

Larry SchlesingerDecember 8, 2020

REA Group, the dominant online real estate listings business and publisher of realestate.com.au, has posted a 29% rise in net profit to $87 million for the 2012 financial year ahead of analysts’ expectations, but real estate agent numbers have fallen 5%.

The group earned revenues of $278 million for the year ending June 30, a 16% rise on revenue of $238 million in the previous financial year.

Over the full year, the number of paying real estate agents declined by 5% to 9,069 and the number of listings dropped 2% to 761,329 - despite figures from SQM Research showing residential listings rising from 377,000 to 387,000 over the course of REA's reporting period.

REA Group said the decrease in paying agents to 21,448 in 2012 from 22,919 in 2011 was the result of “market contraction and consolidation”.

The drop in agent numbers was offset by a 16% rise in revenue per agent to $1,693.

Two years ago, REA Group reported it had 9,612 agents subscribing to its online offerings.

It reported that it had a unique audience of 2.9 million during 2012, with its nearest competitor, Fairfax’s Domain, achieving 1.6 million.

On the key measure of unique browsers for the year, realestate.com.au reported a figure 6.49 million – comparative figures on this metric appear not to be available in the current or previous year's results.

Realestate.com.au accounted for 61% of total minutes Australian spent on residential property portals as of June 2012, with Domain managing 17% of total minutes.

More than a third of total visits (34%) to property portals are via mobile devices, and REA chief executive Greg Ellis expects most of REA’s traffic to come from smartphones and tablets within three years.

Downloads for realestate.com.au’s iPhone, iPad and Android apps have reached 1.1 million, with mobile continuing to be a growth platform for the group.

Residential revenue increased by 12%, commercial revenue grew by 17% and media and developer revenue grew by 31% due to increased take-up of value-added products across all segments.

Ellis says he is cautious about the short-term outlook for the Australian property market with the downturn that began at the start of 2012 “out of alignment with the general economy”.

Despite this cautious outlook, Ellis is confident of double-digit growth in the current financial year.

“In Australia, we achieved 15% growth across the residential, commercial and media businesses and surpassed one million downloads of our realestate.com.au mobile apps.  Our high-growth Italian business achieved revenue growth of 35%. 

"In other international markets we achieved solid growth and continued to increase our leadership.”

The group derives 88% of its revenue from its Australian listings businesses – realestate.com.au, realcommercial.com.au, holiday rentals business homeaway.com.au and property.com.au.

Australian revenue growth was 15% for the full financial year, but slowed to 14% year-on-year in the second half, down from 16% in the first half – reflecting the impact of the market downturn Ellis referred.

The publisher also announced that it would pay shareholders a better than expected final dividend of 20.5¢ per share.

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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