The average Australian’s home-owning dream is all but out of reach, with rising interest rates being dubbed more persistent than ever. Home values are increasing, as are financial pressures. For property and real estate companies like REA Group (ASX: REA), this has meant dwindling consumer confidence. 

In Q1 FY24, REA saw a modest 1% increase in property listings nationwide. But, Sydney experienced a 16% growth in listings, and Melbourne also saw a 14% increase.

The Company’s rental income improved year-over-year, with an average price increase of 8%. This growth was somewhat offset by a 3% decrease in rental property listings. Commercial revenue was boosted by a moderate 11% price hike, increased market penetration, and more listings. On the other hand, developer revenue remained relatively stable, as longer project durations offset lower project starts.

REA Group Chief Executive Officer Owen Wilson commented, “The property market started the new financial year strongly, led by Melbourne and Sydney. Healthy demand from buyers, coupled with stable interest rates for several months, gave sellers confidence to bring their properties to market.”

Overall, the digital advertising and real estate listings company’s revenue was $341 million, up 12% YoY, and EBITDA excluding associates was $198 million, an increase of 13%. Its core Australian revenue increased 11% on Q1 FY23, reflecting yield growth across REA’s Residential and Commercial businesses. Excluding the impact of the CampaignAgent acquisition of July 2023, Australian revenue increased 9%.

REA Group’s flagship site, realestate.com.au, did not lag, reporting a 16% increase in active members, with 2.2 million average monthly buyer enquiries, marking an 11% uptick.

Wilson added, “The strength of our audience leadership, combined with the increasing depth of consumer engagement on realestate.com.au, continues to deliver superior value to our customers. Our focus on personalising consumer experiences is key to this, and during the quarter we saw a record number of visits to our Property Owner Dashboard.”

As for its international arm, REA India continued its momentum during the quarter, with revenue up 25% YoY. The revenue growth was driven mainly by Housing.com’s property advertising business, which saw audience growth of 16% and continued customer growth and benefits from upselling. 

Moving into Q2, REA has reported a 16% year-over-year increase in new residential property listings for October nationally. Sydney’s listings surged by 33%, while Melbourne’s increased by 32%. These October listings were 1% higher than the six-year average. If this trend persists for the rest of the year, the Company anticipates that year-on-year listings for FY24 will show a growth rate of 3-5%. Additionally, REA expects double-digit growth in residential property yields for FY24, primarily due to a national average price increase of 13%.

Wilson concluded, “After a strong start to FY24, we remain focused on delivering new features across our product suite. We will continue to enhance the depth and quality of engagement on our platforms with more personalised consumer experiences. Together, these initiatives will drive significant value for our customers and audience, underpinning future growth.” 

As Australia sees near-record employment and immigration, companies like REA are hopeful that rising prices and interest rates will not deter demand.