Rising Costs and Associate Losses Pose Challenges Despite REA’s Strong Q3

Strong Financial Momentum

REA Group Ltd (ASX:REA) has delivered a compelling set of results for the nine months ended 31 March 2025, showcasing an 18% increase in revenue to AUD 1.247 billion and a 19% rise in EBITDA excluding associates to AUD 734 million. The third quarter alone saw revenue climb 12% to AUD 374 million, reflecting broad-based growth across its core segments including Residential, Commercial, Financial Services, and its Indian operations.

Market Dynamics and Strategic Drivers

Underlying this performance is a favourable property market environment in Australia, where the first interest rate cut in four years has stimulated buyer demand and encouraged sellers to list properties. REA’s CEO Owen Wilson highlighted that these conditions have supported house price growth and increased listings, particularly benefiting the company’s premium digital products such as Premiere+, which saw a 10% price rise contributing to yield growth.

Residential revenue grew 12% in Q3, buoyed by a 15% increase in yield despite flat national listings year-over-year. Commercial and Developer revenues also advanced, supported by price rises and increased project commencements. Meanwhile, Financial Services revenue benefited from a 16% increase in settlements, driven by Mortgage Choice’s strong performance.

Digital Leadership and Audience Engagement

REA’s flagship platform, realestate.com.au, reinforced its dominance as Australia’s leading property website, attracting a record average monthly audience of 12.3 million visitors. The site’s lead over its nearest competitor widened to 5.5 million people, underpinned by enhancements in personalised consumer experiences and a 50% year-over-year increase in seller leads. These metrics underscore REA’s ability to deepen consumer engagement and deliver value to both buyers and sellers.

International and Cost Considerations

Internationally, REA India reported a 28% revenue increase, primarily driven by adjacency services on the Housing Edge platform, despite flat core housing revenue amid competitive pressures. Operating expenses rose 12% group-wide, with Australian costs up 9%, reflecting strategic investments in technology and employee incentives. The acquisition of Realtair also contributed to cost growth but is expected to enhance the company’s end-to-end real estate transaction capabilities.

Outlook and Market Positioning

Looking ahead, REA anticipates continued positive momentum supported by strong employment and further expected interest rate cuts. While residential listings are expected to grow modestly by 1-2% for FY25, yield growth is forecast between 13-15%. The company aims to maintain positive operating leverage with controlled cost growth and marginally lower EBITDA losses in India. CEO Owen Wilson remains confident that REA’s personalisation strategy and market leadership will sustain deep consumer engagement and underpin future growth.