REA Group has reported a 24% jump in its revenue for the March quarter to a whopping $334 million.
👉 Background: REA Group is the Australian property listings company behind Realestate.com.au and a heap of other brands like Flatmates.com.au, Mortgage Choice and Realcommercial.com.au.
👉 What happened: Now, REA Group has reported a 24% jump in its revenue for the March quarter to a whopping $334 million due to a significant jump in residential listings on its platform, particularly in Sydney and Melbourne.
👉 What else: While listings were up 6% across Australia, they jumped even higher in Sydney (18%) and Melbourne (20%). And even though there was a decline in rental listings, rent revenue still went up, as REA Group upped their listing prices.
💡Price elasticity of demand measures how the demand for goods or services changes as its price changes. For example, if the price of your favourite cereal goes up by 10% and you buy another brand because of this price increase - that would mean the price is quite elastic.
💡But given REA increased prices without significantly losing volume, it highlights that REA Group's rental listing prices are quite inelastic.
💡The availability of substitutes is a key reason for price inelasticity. REA Group gets an average of 12 million visitors each month across web and mobile (78% more monthly visitors than its nearest competitor, Domain) so it's not surprise that landlords continue to list properties on the platform.
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