REA Group tips return to normal for nation’s property market as CEO Owen Wilson walks

Australia’s property market is headed back towards more normalised levels but a widely-tipped interest rate cut from the Reserve Bank will continue to support strong demand from homebuyers, says the outgoing boss of REA Group.

Owen Wilson said strong employment, high levels of immigration and expectations for long-awaited rate relief over the next six months was giving vendors the confidence to list their properties.

He said a higher level of residential stock was also offering buyers more choice, which had tempered runaway house price growth.

“Following sustained listings growth, the Australian property market has reached a more balanced level of supply and demand,” Mr Wilson said.

“Continued strength in underlying fundamentals and the expectation of at least one interest rate cut before the end of FY25 should further support the health of the market.”

The online real estate company — which owns realestate.com.au and is controlled by News Corp — on Thursday reported a 20 per cent surge in first-half revenue from its Australian and Indian operations of $873 million. Revenue from India accounted for $64m of the total, up 46 per cent compared to the same time a year ago.

Net profit was up 26 per cent for the six months to the end of December to $314m and REA declared an interim dividend of $1.10 a share. Net reportable profit was up 246 per cent to $441m after it offloaded Asian property platform PropertyGuru

Mr Wilson said the “exceptional” first half result was driven by strong yield growth in a “healthy listings environment”.

“Vendors remained confident during the half with sales volumes consistently higher than the prior year, demonstrating the depth of demand, while buyers benefitted from more choice and some moderation in price growth.”

Most real estate professionals expect a continuing climb in national house prices ahead of the RBA’s interest rate cuts as inflation cools, and a Federal election where home ownership will remain a policy priority.

But the pace of growth may slow with affordability constraints remaining.

A Corelogic survey released on Wednesday of more than 2400 real estate professionals across the property and finance industries found two-thirds expected prices to increase, with a quarter of them expecting growth to exceed 5 per cent.

More than three-quarters of those surveyed by CoreLogic reported buyers relying on financial help from their parents.

Mr Wilson said 11.9 million people visited realestate.com.au every month.

In a second half trading update, REA said January national residential new buy listings were up 3 per cent year-on-year, with Sydney up 5 per cent and Melbourne rising 3 per cent. It added year-on-year growth rates for the second half of the financial year would reflect “very strong” prior period listings volumes.

Accompanying the first-half result, Mr Wilson also announced his intention to retire in the second half of 2025 after 10 years with the group and six as CEO.

“It has been a privilege to lead REA Group for the past six years and I am proud of all our team has accomplished,” he said.

“The business is in excellent shape as evidenced by the results we have announced today. We have an exciting strategy and a talented and committed team to deliver it.”

New Corp chief executive Robert Thomson said Mr Wilson had shown extraordinary leadership and built “a global success story”.

REA last year made a failed fourth tilt for the UK’s Rightmove that valued the online market platform at $12 billion.