REA Group has reported lower than expected revenue from its financial services division in its third quarter results for FY2019.
In its December 2018 report, the group's financial services performance increased 11% year on year to $14.7m. However, as of last week’s Q3 report, “financial services revenue is lower than the prior comparative period.”
The results did not include a specific figure and REA Group declined to provide further details.
REA's financial services division is one of three "growth pillars" for the business and includes a white label loan offering from NAB, allowing house hunters to theoretically secure their property and loan through a single site.
Financial services also covers broker channel activity, which last year saw Smartline become part of the operation.
According to a statement, “Tighter lending conditions and the continued uncertainty in the property market has reduced mortgage settlements across the industry. The decline in mortgage settlements is expected to continue for the remainder of the financial year and into the first quarter of FY20.”
Most recently, listings have been impacted by consecutive long weekends over Easter and Anzac Day, as well as the upcoming federal election.
This resulted in an exaggerated decline of 22% in national residential listings in April, with Sydney down 39% and Melbourne down 35%.
But it wasn't all bad news. In the nine months ending 31 March 2019 the group saw yielded revenue growth of 13%, reaching $667.8m. It is expected Q4 will have a lower rate of revenue growth than Q3, with overall growth expected to exceed the rate of cost growth for the full year.
REA Group CEO Owen Wilson said, “Our ability to continue to deliver growth despite the significant market headwinds is testament to the strength of our business.
“It’s almost a decade since we’ve seen market conditions like these, especially in Sydney where the decline has been the most pronounced. With the royal commission now behind us and the federal election taking place next weekend, we expect less uncertainty surrounding the property market as we enter the new financial year.”