REA Group’s stellar financial year 2025 and record dividends, but…
REA Group, the company behind realestate.com.au, has, perhaps unsurprisingly for those who have followed our commentary here at the blog, delivered another impressive financial performance, this time for the 2025 fiscal year (FY25). Record dividends and robust growth have been recorded despite the ongoing market challenges with respect to residential property listings.
Outgoing CEO, Owen Wilson, crowned his career at REA with a final dividend of A$1.38 per share, bringing the full-year dividend to A$2.48, a 31 per cent increase year-on-year. The result once again reflects REA’s ability to capitalise on the company’s network effect while navigating a complex leadership transition, regulatory challenges and market difficulties.
Financial highlights: strong revenue and profit growth
REA reported a 15 per cent surge in revenue to A$1.7 billion, driven by a 14 per cent increase in yield from higher listing prices. Net profit climbed 23 per cent to A$564 million, with earnings before interest, taxation, depreciation, and amortisation (EBITDA) reaching A$970 million, excluding associates. Residential revenues grew 16 per cent year-on-year, while commercial and developer segments rose 10 per cent to A$218 million, and financial services increased 10 per cent to A$81 million. REA’s India operations also saw a 25 per cent revenue jump to A$129 million, though EBITDA losses persisted at A$28 million due to lower-margin Housing Edge revenues.
Despite a modest one per cent rise in national property listings for FY25, buyer activity accelerated, particularly in the final quarter, fuelled by the first interest rate cuts in four years. This led to a three-year high in customer enquiries. However, listing volumes softened in July, dropping eight per cent nationally, with Sydney and Melbourne seeing declines of five per cent and nine per cent, respectively, reflecting strong prior-year comparables.
Growth drivers
As we have long reported, REA’s ongoing success stems from its focus on innovation and data-driven strategies that enhance and entrench its powerful competitive advantages, which stem from its network effect.
As I have repeated many times, the most powerful competitive advantage is the ability to raise prices without a detrimental impact on unit sales volume. REA Group has this in spades.
The company completed a re-contracting cycle with a seven per cent average price increase for its Premiere+ listings, achieving record penetration for both Premiere+ and Elite Plus tiers. Audience Maximiser penetration more than doubled, boosting engagement and lead quality. REA’s financial services arm gained traction through enhanced integration with realestate.com.au and expanded white-label offerings. The developer market also showed signs of recovery, supported by population growth and favourable interest rate conditions.
In India, REA streamlined operations by divesting PropTiger, allowing a sharper focus on housing.com’s app-first growth strategy. Investments in artificial intelligence (AI) are accelerating product development, delivering high-value experiences and improving operational efficiency. REA’s tech structure has been optimized to enhance speed-to-market, positioning the company for sustained growth.
Financial Year 2026 (FY26) outlook: steady growth and some challenges
Looking ahead, REA expects residential buy listings to remain flat in FY26, with Q1 volumes likely lower due to tough comparables. The company targets double-digit yield growth, supported by a seven per cent national average Premiere+ price increase. Operating costs are projected to rise in the high single digits, excluding PropTiger, as REA continues strategic investments in Audience Maximiser and other growth initiatives. Depreciation and amortisation are forecast at A$143–152 million, with capital expenditure remaining within the 7–9 per cent target range. Losses from associates are expected to improve modestly, while India’s EBITDA losses may widen due to softer Housing Edge revenues.
Leadership transition and competitive landscape
REA is actively searching for a new CEO following Owen Wilson’s departure. The company has ruled out internal candidate Melina Cruickshank and former News Corp executive Damian Eales, signalling an external hire. Meanwhile, REA faces increased competition from U.S.-based CoStar, which is set to acquire rival Domain in a A$2.8 billion deal.
Regulatory scrutiny over pricing practices
REA’s dominant position in the Australian real estate market has drawn attention from the Australian Competition and Consumer Commission (ACCC), which is investigating the company’s pricing practices. Their probe focuses on significant subscription fee increases, with some agents reportedly facing up to 110 per cent higher monthly costs – rising to A$399 for top-tier listings – effective from July 2025. The ACCC is examining whether these hikes are justified, given REA’s market influence. Agents have also reported receiving notices emphasising the confidentiality of pricing agreements, which REA claims are unrelated to the investigation and intended to protect against unauthorised access. REA is cooperating fully with the ACCC, which has yet to reach a conclusion.
REA Group’s FY25 results continue to highlight the company’s ability to drive growth through strategic pricing, superior user interface (UI) and user experience (UX), innovation, and market resilience stemming from its embedded network effect. With an emerging focus on AI, data, as well as on operational efficiency, we currently have no reason to believe REA will lose its edge, even as competition intensifies, regulatory oversight looms, and Owen Wilson steps down.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
He is also author of best-selling investment guide-book for the stock market, Value.able – how to value the best stocks and buy them for less than they are worth.
Roger appears regularly on television and radio, and in the press, including ABC radio and TV, The Australian and Ausbiz. View upcoming media appearances.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
