McGrath feels pinch of sluggish housing market
REAL estate agency McGrath has booked a first-quarter loss as house prices fall and properties take longer to sell.
Shares in McGrath, founded by high-profile real estate agent John McGrath, tumbled yesterday after the agency said it had been impacted by an increase in the number of properties on the market and lower buyer activity.
That was pushing down prices and increasing the time it took to sell a property, the company said.
Properties across the McGrath network spent an average of 52 days on the market during the three months to September compared with an average of 47 days in the first quarter last year.
Lower auction clearance rates and a declining number of settled sales in Sydney, Melbourne and Brisbane had also impacted the company’s bottom line.
“Over the financial year to date, we have seen a noticeable slowdown in the market with a correction of residential property values experienced across the entire real estate sector,” chief executive Geoff Lucas said.
“In addition, the tightened lending environment is impacting current transaction volumes, however we believe this will ultimately strengthen the stability of our property market.”
The update comes after the national average for auction clearance rates fell below 50 per cent at the weekend, according to property research house CoreLogic.
McGrath booked an unaudited loss of $1.9 million for the quarter ended September 30.
For the full-year, the company said it expected earnings before interest, tax, depreciation and amortisation to at least break even.
It posted a loss of $63 million in 2017-18.
McGrath, which has the majority of its operations in NSW and Queensland, said new listings in Sydney dropped 7.9 per cent for the September quarter, while Brisbane listings fell 0.7 per cent.