REA Group Rides Strong Aussie Market to Positive Q1 as It Continues to Establish Leadership in India

The portal operator REA Group has released a trading update covering the first quarter of the Australian financial year. Highlights of the Melbourne-based company's performance for the three months ended 30th of September include:

• Revenue up 15% YoY at A$305m
• Operating EBITDA up 11% YoY at A$174m
• Operating costs up 22% YoY at A$131m

The uptick in REA Group's metrics was largely felled by the company's flagship Australian portal Realestate.com.au which benefitted from a 6% rise in sales prices across the country and a 5% growth in listings volumes compared to July 2022.

Like many portals, Realestate.com.au is increasingly pushing depth products on its users to good effect and saw increased penetration of its pricier products in both residential and commercial over the quarter.

Interestingly, one new metric in REA's missive is the number of Australians who are tracking their home's value in the portal's log-book style feature. The feature is growing massively in popularity (51% increase YoY) with CEO Owen Wilson saying:

“The value of realestate.com.au’s unparalleled audience is further enhanced when our consumers engage more deeply with the platform. During the quarter we saw continued strong growth in active members and property owner tracks, demonstrating the depth of interaction our audience has with our personalised experiences. This strong engagement underpins the high quality of the leads we generate for our customers."

Although the outlook in the Australian market was very positive overall, visits to the portal were down 5.5% YoY (although still claimed to be 3.3x the nearest domestic competitor) and revenue from the company's much-invested-in Financial Services segment dropped.

REA's increased operating costs were chalked up to higher employee and travel expenses as well as the reflection of reduced costs in the prior period due to covid restrictions.

In addition to the leading Australian portal, REA Group can now also claim to run the leading portal in India in terms of traffic. REA India's Housing.com has overtaken its rivals in terms of visitation with Wilson commenting:

“REA India further consolidated its position this quarter as the number one property portal in India by audience, continuing to build on its momentum to deliver strong revenue growth.”

Although no concrete numbers were forthcoming, REA's missive did state that its Indian operations saw a 47% YoY rise in revenue for the quarter helped by volume growth in adjacency products on the Housing Edge platform.

REA India is expected to remain unprofitable through FY23 as the company continues to invest in building a true market leader in the country.