New Zealand Markets closed

REA Group flags election-led listings drop

Stuart Condie
REA Group's first-half profit has fallen 98 per cent to $2.468 million

REA Group's Australian real estate listings dropped three per cent in the first half and the company has flagged further possible declines as buyers hold off pending the result of the federal election.

Sydney, where property prices have fallen the most, led the decline in listings and the realestate.com.au owner said there may be more downside to come.

"In the second half of FY19, listings may be impacted by Federal and State elections," the company said in results released Friday.

The NSW election is scheduled for March 23 and the federal election must be held by May.

Despite the fall in listings, REA Group said Australian revenue still rose 16 per cent and earnings 18 per cent in the six months to December 31.

The company, which is 61.6 per cent owned by Rupert Murdoch-controlled News Corp, cited price changes, developer and commercial revenue growth, and the inclusion of recently acquired property data analytics company Hometrack.

Earnings and profit from core operations - which strip out impairments and other one-off items - rose 19 and 20 per cent respectively, and the company raised its interim dividend to a fully franked 55 cents from 47 cents a year ago.

But the overall bottom line was hit by a big goodwill impairment against REA Group's Asian unit.

First-half profit fell 98 per cent to $2.468 million due to the $173.2 million impairment against a unit that includes operations in Malaysia, Hong Kong, Indonesia, Thailand and Singapore.

"There have been changes in the macro economic environment including additional government cooling measures, which have resulted in more challenging conditions in some markets," REA Group said in its financial results.

"This, coupled with the decision to increase investment to further strengthen our market position, will result in the deferral of near-term returns."

Shares in REA Group fell 3.9 per cent in the first 10 minutes of trade, dropping to $74.88.