- Property listings on realestate.com.au fell 12% in Sydney last month.
- This follows and 8% drop in the September quarter.
- Despite this REA posted a 17% jump in revenue to $221.9 million for the three months.
Sydney is turning into the problem market for the real estate industry.
The number of property listings on realestate.com.au dropped by 8% in Sydney for the three months to September, REA revealed in its quarterly results.
And the fall accelerated in October, falling 12%.
REA, majority owned by media group News Corp, foreshadowed in August that the Sydney market was as an issue.
The company posted a 23% increase in full year profit of $279.9 million, despite falling in listings in Sydney, the biggest market.
Sydney home prices have fallen 7.4% over the past year, the steepest annual percentage decline since February 1990.
In the September quarter, REA posted 17% jump in revenue to $221.9 million despite “unfavourable market conditions”.
Core EBITDA (earnings before interest, tax, depreciation and amortisation) was up 23% to $130.9 million.
In early trade, REA shares were up almost 10% to $79.84.
The September quarter numbers:
The online property classified advertising business reported a 3% fall in listings nationally, including an 8% drop in Sydney and 1% in Melbourne.
“Market conditions are not expected to improve in the short term,” says Tracey Fellows.
“Listings may be weaker in the lead up to the NSW election in March, while the impact of the Federal election is harder to predict.”
The BIS Oxford forecast for new apartment commencements indicates a continued decline for the remainder of this financial year.
REA says overall residential listings in October were down 2%. In Sydney, they were down 12%. Melbourne listings rose 4%.
“We have had a great first quarter and are confident in our strategy for the year,” says Fellows.
“Our market lead remains strong, and providing our customers with access to the largest and most engaged audience of property seekers in Australia continues to be at the core of this success.”
The revenue growth reflects the price changes which took effect from July.