REA Group is set to hit real estate agents with a price hike next financial year, according to a Citi analyst, reports the Australian Financial Review.
It’s reported that David Kaynes, who is a media analyst with the financial group Citi, had previously assumed there would be a 10 per cent price increase for agents in the next financial year.
“REA has informed real estate agents of price increases that will take effect from 1 July. While there are different price changes in different areas, feedback from agents suggests that the average price increase is approximately 15 per cent for agents that are on a Premiere-All contract,” he wrote in a note to clients.
“For other agents, the increases are larger, and we estimate that Highlight and Feature ad prices are seeing average increases closer to 18 per cent.”
Kaynes suggested that REA’s price hike for agents on lower contracts could result in more agents taking premium packages.
“If this current price trend is maintained, we expect that Highlight ads would continue to decline as a proportion of total depth ads, with most of the agents currently buying the product likely to step up to Premiere over time.”
REA has been contacted for comment.
