PHOTO: REA GROUP
(Reuters) – Online real estate classifieds portal REA Group (REA.AX) said the recovering Australian residential market would boost revenue in the second-half as its first-quarter profit fell 14%, sending its shares to almost three-month lows on Friday.
The Australia property market is emerging from a two-year downturn that hurt consumption and corporate earnings. Home prices rose for a fourth straight month in October amid record-low interest rates and looser lending standards.
However, the improvements have yet to fully translate into stronger profits. This week saw two Australian-listed construction material providers, James Hardie (JHX.AX) and Boral (BLD.AX), warn of ongoing softness in the housing market.
REA said property listings would continue to decline in the first half before picking up in the second half, lifting revenue growth later in the year.
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