Mortgage Choice acquisition drives revenue boost for REA

For the nine months to 31 March, revenue came to $869 million, 32 per cent more year-on-year.

The financial services division, including the broker franchises Smartline and Mortgage Choice, reported “strong growth” in operating revenue, powered by increasing settlements and brokers.

REA had commenced rebranding its Smartline brokers to the Mortgage Choice name during the quarter, with full integration of the aggregators expected to be complete by the third quarter of FY23.

However, financial services settlements growth is tipped to slow in the fourth quarter, as national property listings are expected to fall from prior strong periods and from potential federal election impacts.

REA also expects the current industry trend of increased mortgage run-off rates to negatively hit future trail commissions by the end of the year.

Meanwhile, the Australian residential business benefited from higher sale listings, prices surging, and continued growth in add-on products.

On a national level, buy listings were up by 11 per cent year-on-year, with Sydney up by 14 per cent and Melbourne increasing by 8 per cent.

Looking at realestate.com.au, around 12.7 million people visited each month on average during the quarter. There had been 124 million average monthly visits and a 26 per cent rise in active members.

Owen Wilson, group chief executive for REA commented there had been continued high demand and transactions, giving sellers confidence to bring their properties to market.

“These conditions, combined with record take up of our premium products, contributed to our very strong result,” Mr Wilson said.

“We also continued to see excellent growth in our strategically important Financial Services, Data and Indian businesses.”

Rental revenue also experienced growth from increased prices, but there had been a decline in listings.

Meanwhile commercial and developer revenue was broadly flat, with a continued decline in project commencements.

The downwards trend in developer projects is expected to continue into the fourth quarter, especially on an annual comparison basis – as last year, the industry was boosted by HomeBuilder.

The media, data and other segment saw its revenues rise for the quarter, with stronger growth in data.

Looking forward, Mr Wilson commented the Australian property market is “very healthy” and will withstand rising interest rates, with strong bank liquidity, low unemployment and increased immigration.

“While we are seeing housing price moderation in some areas, the strong economic fundamentals will continue to support robust conditions beyond this quarter,” he said.

“We are excited by the significant growth opportunities throughout our business and are well positioned to deliver another strong full year result.”

[Related: MoneyQuest acquires Loans Actually]