New financial results for REA Group have revealed that the company brought in $406.8 million in listing depth revenue in 2015-16 – a 26 per cent increase on last year.
In a trading update yesterday, it was revealed that the parent company of realestate.com.au brought in $629.8 million of revenue in 2015-16 – a 20 per cent increase on the previous financial year – driven by the continued growth in its listing depth products (where agents pay extra to feature a more prominent listing of a particular property).
The group also noted that it is in a “strong position” to develop its property-related services and has opened up “opportunities to bring a wider range of advertisers in front of [its] consumer audience”, for example through the new home loan tool offered by mortgage broker AFG that was integrated into property searches on realestate.com.au last year.
REA Group has said it will “continue to invest in these products in the next year”, however further details have not yet been released.
The rising cost of listings has been carefully watched by real estate agents, with Lynsey Kemp from Belle Property, ranked 37 in REB's Top 50 women in real estate, saying, “There is a concern about the cost of Domain and realestate.com.au, in terms of what they charge and how they will continue to increase their advertising platform, because they're clearly the most powerful marketing tool.
“There's talk of different groups of agencies getting together to maybe form their own website, because otherwise it's quite dominant [if] Domain and realestate are the two main players and [we] are forced to pay their rates. It's fine now but we’re mindful of that in the future.”
If real estate agents do start their own website to rival the duopoly held by the two websites, it could impact REA Group’s revenue – 88 per cent of which (or $555.2 million) came from Australia in 2015-16. This marks a 16 per cent increase on last year.
Speaking after the results were released, REA Group chief executive officer Tracey Fellows said the company had “cemented [its] leadership position in Australia on the back of record audience and engagement”, and that this was “particularly pleasing given residential listing volumes were lower in the second half”.
She added that the company had also extended its operations by acquiring iProperty Group, which has given the group a “foothold” in south-east Asia and helped it extend its operations across four continents, and by launching its global property network “giving consumers access to more than 3 million listings from 56 countries”.
[Related: Fairfax to bolster Domain's market position]