REA Group reports settlements dropped 13% in FY23

The REA Group Ltd (ASX: REA) has unveiled its full-year financial results for the financial year ended 30 June 2023, revealing a 13 per cent year-on-year decline in operating revenue to $69 million.

This decline is attributed to ongoing economic challenges that impacted the company’s operations, particularly within its mortgage broking business Mortgage Choice, which reported a 13 per cent drop in settlements over the financial year, totalling $22 billion; this followed a 26 per cent increase last financial year.

However, the group’s total loan portfolio experienced a marginal 1 per cent increase, reaching $88 billion.

In Australia, REA Group operates the residential and commercial sites realestate.com.au and realcommercial.com.au, data and insights business PropTrack as well as mortgage broking business Mortgage Choice.

The core Australian revenue, amounting to $1,104 million, saw a slight 1 per cent decline compared to the previous year.

Despite this, the Mortgage Choice network witnessed 183 new brokers joining, marking a 6 per cent increase, bringing the total to 1,066 brokers.

The decline in settlements coincided with a broader market trend, with new lending decreasing by 5.3 per cent, as economic challenges persist amid higher interest rates. In contrast, refinance activities surged by 22.4 per cent.

The report highlighted that Mortgage Choice and Athena joining forces had been a positive development, offering new home loan products.

The Mortgage Choice Freedom suite encompasses three products: the Mortgage Choice Freedom Saver (variable rate), Mortgage Choice Freedom Fixed (fixed rate), and Mortgage Choice Freedom Flex (split loan).

Despite the Australian housing market grappling with challenges such as interest rate uncertainty and supply constraints, the group reported demand remains robust, as evidenced by healthy auction clearance rates and a rebound in property prices throughout 2023, the group highlighted.

Chief executive Owen Wilson emphasised the enduring strength of the Australian property market, emphasising a return to price growth and increasing demand.

“We believe stabilisation of interest rates is within sight and expect this will lead to an increase in market activity,” Mr Wilson said.

“We are focused on delivering products that provide the greatest value to customers and enhance the experience of our audience, and we see significant opportunities in the year ahead.”

Looking forward, the REA Group anticipates that the combined contributions from its associates in FY24 will exhibit modestly higher losses compared to FY23. The prediction is indicative of ongoing challenges faced by these businesses due to the prevailing tough market conditions and the group’s strategic investments in future growth.

[Related: REA mortgage settlements lift FY22]

Kate Aubrey is the senior content producer of Momentum Media's mortgages titles: The Adviser and Mortgage Business.

Prior to joining Momentum Media, Kate covered regional and breaking news for ABC Radio for more than three years.

She has a Master of Arts in Journalism from the University of Melbourne and a Bachelor of International Business and Business Management from Griffith University.

Email Kate at: This email address is being protected from spambots. You need JavaScript enabled to view it.