Property market tipped to stay busy

ONLINE real estate advertising firm REA expects the residential property market to keep moderating as interest rates rise, but expects its operations to keep ticking over.

The company, best known for its realestate.com.au portal, says rates have already impacted property prices, but noted strong fundamentals including record low unemployment, high household savings and increasing migration, should continue to support demand.

In July, national residential new listings were up 7 per cent year on year, partly as lockdowns were in place last year. REA, majority owned by News Corp, publisher of this newspaper, cautioned that growth rates beyond that will reflect the strong prior period listings volumes.

“While we’re mindful of changing economic conditions, with further interest rate rises expected, Australia’s property market is healthy and supported by strong underlying fundamentals,” REA chief executive Owen Wilson (pictured) said.

Mr Wilson said the company’s growth momentum was backed by an unrivalled audience and a product pipeline that he expected to deliver for users in coming years.

The company will boost its investment in its thriving Indian operations, where it has the number one audience position, and spending in this market will weigh on the group this year as it strives for long-term growth.

REA’s core operations generated revenue growth of 26 per cent to $1.17bn and an increase in earnings before interest, taxes, depreciation, and amortisation, including associates of 19 per cent to $674m.

The company’s reported net profit increased to $385m, reflecting one-off impacts in both periods. Stripping out REA’s India operations and its purchase of Mortgage Choice, core revenue increased by 18 per cent.

REA will pay a record final dividend of 89c a share fully franked.