REA Group expects house prices to slow as more homes are listed for sale

The company behind realestate.com.au is tipping slower house price growth as a result of more homes being listed for sale.

REA Group chief executive Owen Wilson on Wednesday revealed national listings in the first three months of the financial year rose 7 per cent from a year ago.

Listings reached their highest volume for a September in nine years, he told the company’s annual general meeting.

The growth was driven by Sydney and Melbourne, where listings were up 11 per cent and 9 per cent, respectively, in the quarter. Brisbane, Adelaide and Perth also posted higher first quarter listings.

Mr Wilson said the national property market remained healthy and was supported by high employment, immigration levels, stable interest rates and strong buyer demand.

“Despite the increase in the volume of stock available, properties are continuing to sell which indicates demand for housing remains robust,” he said.

“With more stock on the market buyers now have a lot more choice, and this should result in the moderation of house price growth.”

The observation came a week after REA — which also operates mortgage broking firm Mortgage Choice and property valuation company PropTrack — walked away from a £6.2 billion ($12.05b) takeover bid for Rightmove after the UK property portal rebuffed four proposals in a month.

The rejection dashed REA’s goal of moving into another global market.

REA, which is part of media tycoon Rupert Murdoch’s empire, has already expanded into India and planned to have a secondary stock market listing in London if it acquired Rightmove.

REA chair Hamish McLennan on Wednesday said that while the outcome was disappointing, it was critical the company maintained its longstanding, disciplined approach to capital management and mergers and acquisitions.

“We strongly believed that the proposed combination would have delivered significant shareholder value for both REA and Rightmove shareholders,” he told shareholders.

“We will not overpay and in this case, the lack of engagement from the Rightmove board, despite the benefits of our offer, prevented us from having constructive discussions on price and making a firm offer.”

Shares in REA were up 2.4 per cent to $216.99 just before 11am.