August 8, 2019 / 11:36 PM / 6 months ago

UPDATE 1-Australia's REA profit more than halves, flags lower listings

(Adds CEO quote, listings figures, background)

Aug 9 (Reuters) - Real estate classifieds firm REA Group Ltd on Friday reported a 58% drop in annual profit and flagged lower listings across the first half of 2020, citing challenges from a steep property downturn in Australia.

Reported net profit for the year ended June 30 was A$105.3 million ($71.6 million) from A$252.8 million last year, largely due to a A$173.2 million impairment charge on its Asian assets recorded in the first half.

Listings for the first six months of fiscal 2020 are likely to be lower than last year, REA said, adding that it expects revenue growth to be heavily skewed towards the second half.

The company, majority owned by News Corp, said total residential listings fell 8% for the year, with declines of 18% in Sydney and 11% in Melbourne.

Tighter lending conditions, higher taxes on foreign buyers and an apartment glut have driven the sharpest property downturn in a generation in Australia.

Chief Executive Officer Owen Wilson, however, said a number of factors were now in place to support a market recovery, including lower interest rates and an improved lending environment.

“Coupled with a very healthy increase in buyer activity, it signals an eventual recovery of listing volumes,” Wilson added.

Data earlier this month showed the hard-hit property markets of Sydney and Melbourne enjoyed a second straight month of gains in July, an early sign that official rate cuts were feeding through.

$1 = 1.4717 Australian dollars Reporting by Rashmi Ashok in Bengaluru; Editing by Stephen Coates

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