Fairfax Media has flagged a drop in first-half earnings for its Domain real estate business as homeowners hesitate to put their houses up for sale in Sydney and Melbourne.
Chairman Nick Falloon said on Thursday that listings have failed to recover since dropping in July amid uncertainty over superannuation and negative gearing during the federal election campaign.
"Now, it's basically a lack of stock - people are not putting their houses up for sale," Mr Falloon said after Fairfax's annual general meeting in Melbourne.
"It (real estate) is a cyclical business, which will change - it's just a question of when."
Volumes of new listings to the end of October were down 18 per cent in Sydney and five per cent lower in Melbourne.
Fairfax pointed out that the comparative period in 2015 was one of very strong listings growth for Domain, which at the time boasted a 43 per cent increase in digital revenue.
So far this financial year, Domain's revenue is up by two per cent.
Fairfax shares closed down 3.5 cents, or 4.3 per cent, at 77.5 cents.
They had dropped as low as 72 cents after Fairfax warned Domain's first-half earnings before interest, tax, depreciation and amortisation (EBITDA) would be slightly lower because of the "listings softness" and continuing investment in the business.
Chief executive Greg Hywood told shareholders that Fairfax nonetheless remained confident on the outlook for Domain.
Overall group revenue for the year-to-date is six-to-seven per cent below that of a year ago.
That's better than the eight-to-nine per cent revenue fall forecast in the 2016/17 outlook at the company's full-year results in August.
Revenue from Metro Media, which publishes the Sydney Morning Herald, The Age and Australian Financial Review newspapers, was down about eight per cent.
Revenue from the Australian Community Media division was down about 10 per cent.
At the annual general meeting, one shareholder asked if Fairfax might one day decide to sell its newspapers and concentrate on Domain.
"We have the view that publishing is a sustainable business in its own right - all publishing," Mr Hywood said.
Mr Hywood said, however, that consumers of news were now accessing the product more through digital platforms than printed newspapers.
"Clearly, if closer to 70 per cent of the audience (seek) access through digital means, we have to focus on the journalism and where people access it," he said.
"So what we've done is invest in the digital platform."
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