REA Group is blaming the lack of listings as deterring potential sellers, perhaps this is the case but it sounds an unusual reason not to list a property for sale. Personally I would prefer less competition when selling my home. I dare say uncertainty around government changes to tax treatment of investment properties are starting to influence the market.  REA Group does however appear to be coping slightly better than Fairfax’s doman.com.au in the local market.

Pleasingly revenue growth in Q1 was driven by its purchase of iProperty Group Ltd (ASX:IPP).

The good news for investors is that revenue is forecast to increase above revenue costs over the forward financial year but trading on a forward price to earnings ratio of 25 its share price may come under further selling pressure.

Tip for New Investors

As a new investor it is tempting to jump on companies which have grown strongly over a number of years but it is important to remember nothing grows strongly forever. As a company matures and growth slows it is more important to look for value in the share price before entering.

Disclosure:

Please Note: None of the above should be considered investment advice. These are my own opinions based on a number of years market experience. Please do your own research and consult a qualified financial advisor if you wish to invest.