Digital property listings company REA Group has warned that soft listing volumes in the September quarter are likely to continue through the first six months of the fiscal year.
The company behind realestate.com.au says September quarter earnings are up nine per cent. Earnings before interest, depreciation, tax and amortisations from core operations have risen to $90 million, from $82 million last year.
Total revenue for the three months to September 30 are up 16 per cent to $170 million, despite a decline in new listings in the overall market. The gains have been driven by higher residential revenues and inclusion of revenue from the Asia-focused iProperty business that REA acquired in February.
The company, which is majority owned by News Corp, says it has achieved a 14 per cent increase in the Australian residential business, even as home listings have fallen eight per cent during the quarter.
"This has been a strong first quarter for REA Group given the softer market conditions in Australia," chief executive Tracey Fellows said on Tuesday.
REA said the decline in new listings for homes in the Australian market was led by falls in Sydney and Melbourne, due to a combination of uncertainty surrounding the federal election, and the lack of stock deterring potential property sellers.
"Listing volumes have remained at these levels in October and we expect these conditions to continue for the remainder of the first half," the company said in a statement.
REA had reported a 20 per cent rise in FY16 profit to $253.3 million, on the back of a 21 per cent lift in revenue.
The company's business now spans four continents following the acquisition of Asia-focused online real estate site iProperty in February.
At 1105 AEDT, REA Group shares were up 6.8 per cent at $51.83 each.
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