Why you need REA Group in your portfolio

If you're looking for exposure to the Australian housing recovery, it's hard to look past REA Group (ASX: REA). The operator of realestate.com.au has been the dominant force in online real estate for decades, and it's showing no signs of slowing down.

With two rate cuts already delivered by the Reserve Bank of Australia (RBA) and more expected, green shoots are emerging across the housing market.

Auction clearance rates have climbed sharply to 73% (the highest in over a year) and buyer activity is rising fast. Every fund manager on the ASX is looking for a way to play the housing upturn. In our view, REA is the cleanest, most leveraged, and highest-quality name in the space.

What it does

REA owns and operates realestate.com.au, Australia's most visited property listing website. It's the first stop for anyone thinking of buying, renting, or selling a home, with over 14 million unique visitors each month. The platform monetises through listing upgrades, subscriptions, and advertising, and increasingly, financial services via its Mortgage Choice arm.

It also owns PropTrack, one of the fastest-growing property data and analytics businesses in the country, and holds stakes in PropertyGuru (Asia) and Realtor.com (US).

Why it is better than the rest

REA isn't just the biggest, it's also the most effective platform for real estate agents and consumers. While Domain (its main rival) has spent years playing catch-up, REA has consistently widened the gap in engagement, pricing power and product innovation.

• realestate.com.au has more than three times the engagement of Domain across key metrics
• REA's listing yield is significantly higher, reflecting greater agent willingness to pay for premium products
• Its diversification into mortgages and data creates new, high-margin revenue streams with minimal incremental cost

CoStar's recent bid for Domain has reignited concerns about competitive pressure. But we've seen many would-be challengers enter the market over the past decade, none have succeeded. REA's network effects are entrenched. And while CoStar is a credible operator in the US, Australia is a structurally different market. Domain has underperformed for years for good reason, and changing hands doesn't fix that overnight.

Long track record, strong leadership

This isn't a new story. REA has been delivering for shareholders for decades. Since listing in 1999, the stock is up more than one thousand times, a compound annual return of over 30%.

That consistency comes from disciplined execution. The outgoing CEO, Owen Wilson, has overseen a period of remarkable growth, pushing hard into mortgages and data while defending the core platform. His successor has big shoes to fill, but the bench is strong, and the strategy is clear.

Why now?

REA is a high-quality compounder, and high-quality compounders rarely come cheap. But timing matters, and we think the stars are aligning.

• The RBA has cut rates twice in 2025, and we expect they are likely to cut more than most economists' expectations. That's a green light for housing activity to pick up.
• Auction clearance rates are surging, hitting 73%, the highest level in over a year (see chart below).
• Buyer and seller sentiment is improving, and that's driving more listings, more upgrades, and more mortgage flows.

The bottom line

Every housing cycle has a leader. In Australia, that leader is REA. It has the brand, the platform, and the pricing power. It has margin, cash flow, and multiple growth levers. It's a rare combination: defensive in a downturn, explosive in a recovery.

If you want exposure to the next leg of Australia's housing cycle, REA should be top of your list.

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