Company Reports

REA Group's full-year results showed both revenue and EBITDA up 12% on the prior year, excluding the exited India business. Dividends per share were up 20% to AUD 2.97.

We expect REA Group’s near-term challenges to center on navigating significant regulatory and competitive tension. REA Group has come under increasing regulatory scrutiny for anticompetitive behavior, which we find understandable, given the dominant position it holds and the steep price hikes it puts through every year, both from direct price hikes on existing tiers and through the introduction of new listing tiers, which we consider price hikes by a different name. The acquisition of competitor Domain by CoStar, and its intention to increase competition, adds to near-term challenges, although it mitigates regulatory scrutiny.

We expect REA Group’s near-term challenges to center on navigating significant regulatory and competitive tension. REA Group has come under increasing regulatory scrutiny for anticompetitive behavior, which we find understandable, given the dominant position it holds and the steep price hikes it puts through every year, both from direct price hikes on existing tiers and through the introduction of new listing tiers, which we consider price hikes by a different name. The acquisition of competitor Domain by CoStar, and its intention to increase competition, adds to near-term challenges, although mitigates regulatory scrutiny.

REA Group reported third-quarter results with EBITDA before associates and excluding mergers and acquisitions of AUD 220 million, up 16% on the prior year, on an 11% increase in revenue and a 5% increase in operating costs.

Advancements in AI, including data analysis tools and "vibe coding" software built from prompts, have increased investor concerns about the impact on software stocks. The ASX 200 technology sector has fallen over 40% since September 2025, and REA Group shares are 35% below the peak.

We expect REA Group’s near-term challenges to center on navigating significant regulatory and competitive tension. REA Group has come under increasing regulatory scrutiny for anticompetitive behavior, which we find understandable, given the dominant position it holds and the steep annual price hikes it puts through, both from direct price hikes on existing tiers and through the introduction of new listing tiers, which we consider price hikes by a different name. The acquisition of competitor Domain by CoStar, and its intention to increase competition, adds to near-term challenges.

REA Group's fiscal first-half EBITDA before associates rose 6% on the prior year, mostly driven by an 8% increase in revenue in Australia and a 9% increase in operating costs in Australia. The shares opened down 18% but closed down around 8% after the release.

We expect REA Group’s near-term challenges to center on navigating significant regulatory and competitive tension. REA Group has come under increasing regulatory scrutiny for anticompetitive behavior, which we find understandable, given the dominant position it holds and the steep annual price hikes it puts through, both from direct price hikes on existing tiers and through the introduction of new listing tiers, which we consider price hikes by a different name. The acquisition of competitor Domain by CoStar, and its intention to increase competition, adds to near-term challenges.

We expect REA Group’s near-term challenges to center around navigating significant volatility in the Australian housing market. After the onset of the covid-19 pandemic, REA Group received a substantial boost to revenue and profit margins from the booming housing market. We estimate that residential transactions were around a third above trend levels during fiscal 2021 and 2022. With the normalization of interest rates, we expect continuing swings in listings but an eventual return to trend, which started in fiscal 2023.

REA Group's first-quarter EBITDA before associates was up 5% on the prior year, driven by a 6% increase in group revenue and a similar increase in expenses.

We expect REA Group’s near-term challenges to center around navigating significant volatility in the Australian housing market. After the onset of the covid-19 pandemic, REA Group received a substantial boost to revenue and profit margins from the booming housing market. We estimate that residential transactions were around a third above trend levels during fiscal 2021 and 2022. With the normalization of interest rates, we expect continuing swings in listings but an eventual return to trend, which started in fiscal 2023.

REA Group's full-year results saw EBITDA from the group's property and online advertising segment exceeding AUD 1 billion for the first time. The company also committed to further double-digit price hikes for buy-listings for the next two years and the foreseeable future.

We expect REA Group’s near-term challenges to center around navigating significant volatility in the Australian housing market. After the onset of the covid-19 pandemic, REA Group received a substantial boost to revenue and profit margins from the booming housing market. We estimate that residential transactions were around a third above trend levels during fiscal 2021 and 2022. With the normalization of interest rates, we expect continuing swings in listings but an eventual return to trend, which started in fiscal 2023.

REA Group’s third-quarter trading activity showed 13% revenue growth compared with the same time last year. Australian residential revenue grew by 12% on a 15% price increase and flat listings growth. (A 3% revenue deferral made up the difference.)

We raise our fair value estimate for narrow-moat Domain to AUD 4.43 per share from AUD 4.20 following the announcement of an improved nonbinding indicative proposal from wide-moat CoStar Group to acquire the business (see our note “Domain: CoStar Offers to Buy Australia’s Struggling Number 2 Property Portal). We assume a 100% probability of the business being acquired for the proposed offer. Our stand-alone valuation for the company remains AUD 2.65 per share.

We raise our fair value estimate for narrow-moat Domain to AUD 4.20 per share from AUD 2.65 following the announcement of a nonbinding indicative proposal from wide-moat CoStar Group to acquire the business. Our upgrade credits 100% probability of the business being acquired for the proposed offer and reflects the known willingness on the side of Nine Entertainment, which owns around 60% of Domain, to sell the business, as reported in the media. Our stand-alone valuation for the company remains at AUD 2.65 per share. We don’t change our valuation for wide-moat peer REA Group, as we expect its economic moat, based on network effects and cost advantages will protect it from incursions by Domain, even under potential new ownership.

We raise our fair value for wide-moat REA Group to AUD 126 from AUD 123 previously, following first-half results. The company has outperformed our expectations, as Australia is seeing continued new listings growth, despite listing levels last year having already been significantly elevated compared with long-term trends. REA Group estimates that new buy listings were around 8% higher during the first half, compared with the previous seven-year average. However, we believe this seven-year average itself also represents somewhat elevated levels, as it included the booming housing market period of fiscal 2021-22. Regardless, new listings growth slowed during the half, from 12% above the seven-year average in the first quarter to just 3% in the second quarter. We therefore continue to forecast a normalization, albeit at a slower pace. We have adjusted our immediate near-term forecasts up and pushed back our normalization to fiscal 2026-27. Our forecasts assume a gradual normalization and don’t include a potential increase in listings from distressed selling.

We expect REA Group’s near-term challenges to center around navigating significant volatility in the Australian housing market. After the onset of the covid-19 pandemic, REA Group received a substantial boost to revenue and profit margins from the booming housing market. We estimate that residential transactions were around a third above trend levels during fiscal 2021 and 2022. With the normalization of interest rates, we expect continuing swings in listings but an eventual return to trend, which started in fiscal 2023.

We maintain our AUD 123 per share fair value estimate for wide-moat REA Group following its first-quarter results. Similar to narrow-moat Domain, REA Group had a strong start to the year, but we don’t expect this momentum to continue as listings activity is likely to slow from current elevated levels. One crosscurrent that may cause a delay to this normalization is a potential increase in distressed selling.

We expect REA Group’s near-term challenges to center around navigating significant volatility in the Australian housing market. After the onset of the covid-19 pandemic, REA Group received a substantial boost to revenue and profit margins from the booming housing market. We estimate that residential transactions were around a third above trend levels during fiscal 2021 and 2022. With the normalization of interest rates, we expect continuing swings in listings but an eventual return to trend, which started in fiscal 2023.