By David Winning 
 

SYDNEY--REA Group Ltd. said Australia's property market retains several supports, as households and investors face higher borrowing costs after the country's central bank raised interest rates for the first time in more than a decade.

REA said the Reserve Bank of Australia's increase of 25 basis points in the cash rate to 0.35% on Tuesday would be followed by further raises, but strong bank liquidity, record-low unemployment and higher immigration should underpin the property market.

Still, the property market faces other near-term headwinds with this month's federal election potentially weighing on listings, which were very strong a year ago. REA said national residential listings fell by 8% on year in April, with steeper falls in Sydney and Melbourne, and it expects listings to be lower in the three months through June compared with 12 months earlier.

"It is anticipated that fourth-quarter volume headwinds will be more than offset by higher Residential and Commercial yields, supported by contracted price rises and increased depth penetration, the benefit of strong March volumes deferred into 4Q, and growth in Data and REA India revenues," REA said on Friday.

REA provided the outlook alongside its third-quarter performance, which was headlined by a 27% rise in earnings before interest, tax, depreciation and amortization to 155 million Australian dollars (US$109.5 million). Quarterly revenue rose by 23% to A$278 million, while operating expenses lifted 17% to A$122 million.

REA is 61% owned by News Corp., which also owns Dow Jones & Co., publisher of this newswire and The Wall Street Journal.

 

Write to David Winning at david.winning@wsj.com

 

(END) Dow Jones Newswires

May 05, 2022 18:31 ET (22:31 GMT)

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