REA Group is set to hike prices for agents listing a property on its website—with rumours of a 10-18% increase to go live later this month.
The news emerged as several media sources hinted at upcoming changes anonymously, with no public announcements made as yet.
The double-digit price increases, which are also expected at rival Domain, would be the highest since the pandemic, and could increase listings costs by up to A$500 in major markets like Sydney and Melbourne.
For reference, REA's premier product already costs real estate agents between A$2700-A$3400 per listing—which means any hikes could raise the cost of listing a property could realistically hit A$4000.
It is understood that REA wants to increase prices to better reflect the value it provides to users, with REA Group chief customer officer Kul Singh on record saying its audience “generates the most and the highest quality leads, with many customers commonly reporting we deliver seven to eight out of every 10 enquiries they receive.”
The question is how will customers react to a price rise during a time of economic hardship. Group CEO Owen Wilson said so himself in REA Group's HY1 financial results released in Feburary:
The Australian property market was heavily impacted during the first half by unprecedented consecutive interest rate hikes. While underlying demand remained healthy, uncertainty around future interest rate movements caused some sellers to pause and buyers to re calibrate as borrowing capacities fell.
The move may be driven by a need for more profitability in the company after mixed fortunes in February's H1 2023 financial results, where revenues were up 5% YoY but profits and earnings per share both dropped by 9% respectively.