REA Group

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  • February 11, 2019

    REA Group 1HFY19 update: growth in a challenging environment

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    On 8th February 2019, REA Group reports its 1HFY19 earnings. Core Australian business continues to drive earnings and revenue growth in spite of a tough macro environment but a write-down in the Asia business impacted earnings for 1HFY19.
  • December 5, 2018

    Classifieds Marketing Outlook: All Segments

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    For decades, classifieds were the domain of newspapers, which offered advertisers cheap ads sorted under specific categories. The ads gave shoppers an easy way to browse various local offers, usually from private sellers. But, the jump from print to digital was inevitable and has proven itself to be quite lucrative for digital players. However, in the past few years, as the online classifieds market matures, leading digital classifieds players are attempting to diversify their revenues into new products and services. This is being driven by the need to ensure new sources of revenue growth and to drive customer acquisition and loyalty. In the real estate market, REA and Domain have introduced adjacent services such as mortgage broking and data analytics. In the recruitment market, LinkedIn and SEEK have been investing in technology companies involved in temporary hire, skill development, alternative recruitment and employee engagement.
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    October 17, 2018

    Property Advertising Market Outlook

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    Even as the RBA chooses to keep interest rates stable, the Federal Government has implemented measures to cool the rising property market. This has resulted in a decline in new listings and housing sales in major cities and a decline in real estate purchases by foreign buyers. Macroeconomic indicators, such as GDP growth, household income and consumption continue to strengthen, with labour participation increasing and the unemployment rate falling to 5.4% in June as 41,200 full time jobs were created. The RBA continues to maintain the cash rate at the same level due to a below-target inflation rate and high consumer debt that makes many households’ consumption rates sensitive to the mortgage rate. Household debt recently reached 190.0% of total annualised household income. The online real estate classified market is dominated by two players, the REA Group and Domain, which together hold 98.0% of the market. Both players reported strong annual results, with about 20% revenue growth for FY18. Despite the dominance of the two players, new start-ups continue to enter the market in the hopes of grabbing a slice of the lucrative property classifieds market. However, to date, none have gained any material traction in the Australian market.
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  • November 15, 2017

    Classifieds Marketing Outlook: All Segments

    The Online Classifieds market recorded robust growth of 18.3% between 2014 and 2016, with Real Estate Classifieds witnessing a surge of 20.5%. This was followed by Employment Classifieds and Auto Classifieds with 17.4% and 13.6%, respectively. Growth in the overall Classifieds segment is expected to slow to 5.6% between CY17 and CY21. The CAGR for all three major segments is estimated to slow to 5–6%. We expect more entrants to try and disrupt the market with unique business models. Whether they succeed will depend on the strength of the incumbents and the type of Online Classifieds segment. In addition to doubling down on their mobile strategy, players in the Online Classifieds segment are also transforming themselves to leverage synergy and become more valuable to their customers. We expect to witness more acquisitions and product expansions as incumbents try to leverage their dominance to enter new areas in the value chain.
  • September 20, 2017

    Property Advertising Market Outlook

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    Technology as a disrupting and differentiating factor
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    August 26, 2016

    Classifieds Marketing Outlook: All Segments

    International opportunities and additional adjacencies have supported the growth in this market. We discuss the current and future market trends including the transition to digital, how the market is entering a new phase through digital, and the success achieved by the leading players.

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    June 29, 2016

    Property Marketing Outlook

    Australia’s property market remains robust both in terms of house prices and building approvals. This will support ongoing growth in all overall classified and display expenditure by home sellers and real estate agents. Median house prices in metro areas (notably Sydney $780,000 and Melbourne $585,000) are on all time highs having achieved double digit growth rates in the past 12 months. Foreign investors and low relative interest rates has fueled these trends. Likewise the the loans market is very large and continues to grow, though there has a been a shift in recent times towards higher density housing (now around 49%) relative to detached homes.

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    December 8, 2015

    Digital AdEx Market Outlook – the hunter becomes the hunted

    MVNOs have seen their market share grow in the last few years. However, we believe that we are now at ‘Peak MVNO’, thanks to rising costs, a declining price differential with MNOs and Vodafone’s return to growth. We forecast MVNO’s share to decline to 6.6% in 2020 from 8.3% currently, even as TPG outperforms by gaining share.