News Corp majority-owned REA, which runs online property site realestate.com.au, has managed to lift revenue 7% to $198.6 million in the third quarter but sees storm clouds ahead created by weak listings and the federal election.
CEO Owen Wilson says the growth was achieved in a challenging market with significant declines in new residential listing volumes and new project commencements.
"Our ability to continue to deliver growth despite the significant market headwinds is testament to the strength of our business," he says.
"It’s almost a decade since we’ve seen market conditions like these, especially in Sydney where the decline has been the most pronounced. With the Banking Royal Commission now behind us and the Federal election taking place next weekend, we expect less uncertainty surrounding the property market as we enter the new financial year."
Listings in the national Australian residential market fell a 9% over the three months to March period led by an 18% drop in Sydney and 12% in Melbourne.
Competitor Domain last month reported a 6% drop in total revenue for the March quarter.
REA's revenue growth reflects price changes, improved product mix and depth penetration, and stronger contribution from products such as Audience Maximiser.
Wilson says market conditions are not expected to improve in the short term, with listing numbers impacted by consecutive long weekends over Easter and Anzac Day, as well as the Federal election campaign.
He says these circumstances did not exist the year prior resulting in an exaggerated decline of 22% national residential listings in April. Sydney was down 39% and Melbourne down 35%.
He expects the fourth quarter to have a lower rate of revenue growth than the third quarter.
The third quarter results in detail:
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