REA records 35% revenue growth after broker acquisition

The listed property platform has reported its results for the three months to 30 September, revealing revenue after broker commissions had grown by 35 per cent year-on-year to $264 million.

Parent company News Corp reported revenues were up by $94 million, or 62 per cent, from the prior three months, primarily due to the acquisition of Mortgage Choice and higher Australian residential revenues, partly a result of strong national listings and price rises.

REA completed its purchase of Mortgage Choice in July and expects to complete its integration by Q3 in the 2023 financial year.

Similarly, REA Group reported there had been continued growth in settlements and brokers across the Mortgage Choice and Smartline businesses.

Excluding the recent acquisitions of Mortgage Choice and REA India, revenue had grown by 22 per cent year-on-year in the September quarter.

REA Group chief executive Owen Wilson commented the company had performed strongly given the lockdowns in Sydney and Melbourne.

“Our teams have made excellent progress across a number of key initiatives including the integration of our Mortgage Choice and Smartline businesses, the roll out of new products such as our Connect offering and our integrated rental applications platform, all of which provide the foundations for continued growth,” Mr Wilson said.

REA’s earnings before interest, tax, depreciation and amortisation (EBITDA) came to $158 million, up 25 per cent year-on-year.

National listings were up by 11 per cent in the September quarter, with Sydney down 7 per cent and Melbourne rising by 79 per cent, after both cities saw 64 per cent rises through the June quarter.

On average, realestate.com.au had seen 12.6 million visitors each month during the September quarter, with buyer inquiries reaching record levels.

REA has forecast positive property market conditions, noting national listings were up by 16 per cent year-on-year in October – with Melbourne growing by 20 per cent and Sydney by 29 per cent.

However, the growth rate is expected to slow as the strong listing period cycles out, particularly in the second half of the FY22.

REA also nodded to regulatory measures, stating they could slow house price inflation and thus hit listing volumes.

“As vaccination milestones are met and restrictions continue to be lifted, we expect property markets across Australia to revert to normal operating settings,” Mr Wilson said.

“Buyers remain out in force and this strong demand is likely to fuel ongoing positive momentum.”

[Related: Home-ownership schemes a ‘catch-22’: REA]