Sydney, June 23, 2026, 08:04 AEST
REA Group Ltd (ASX:REA) fell 3.1% to finish at A$135.77 on Monday, the session low and worst close in a year. The shares are down 5.1% over the past week and now sit almost 49% under their 52-week high of A$265.98.
REA Group shares dropped less than two weeks after the realestate.com.au operator wrapped up its A$200 million on-market buyback. The company bought 1.257 million shares for A$199.999 million, paying an average price of about A$159.06 a share. At Monday’s close, the stock was 14.6% under that average.
REA finished its buyback early, using all the authorised funds by June 11. The end of the programme may have taken away a steady buyer right as investors pulled back from expensive digital platforms. The buyback was set to run until December.
S&P/ASX 200 edged down 0.1% to 8,816.1 on Monday. REA trailed the market by a wide margin. CAR Group dropped 3.25%. Shares in Seek fell 5.43%. Tech and communication-services names lagged most.
Pressure on property investors is increasing after the 2026 federal budget changes in Australia. Starting July 2027, negative gearing will only apply to new homes, meaning investors can’t offset losses from existing rental properties against other income. The capital-gains tax discount will also be replaced with an indexed cost base and a minimum tax rate. The new rules won’t affect current holdings, which are grandfathered.
REA’s residential revenue is tied to housing turnover and ad upgrades. UBS downgraded the stock this month and cut its target price by about 23%, pointing to short-term risks from lower listing volumes. Bank of America is also neutral on REA, with a A$175 target and a forecast for new listings to fall 3% in fiscal 2027. Its profit outlook is under the market consensus.
REA shares are down, even as the company reported third-quarter revenue up 11% like-for-like to A$398 million. EBITDA rose 16% to A$220 million. Residential revenue climbed 12%, lifted by a 14% jump in buy yield, or the average revenue REA collects per sale listing.
REA’s quarter got a lift from double-digit revenue gains in Australia and higher residential yields, according to CEO Cameron McIntyre. The company posted 12.9 million average monthly visitors and 150 million monthly visits, which is 103.8 million more visits than Domain, its closest rival.
REA’s senior economist Angus Moore said home price growth has slowed and “market conditions cooled” as the housing backdrop eased. The company now sees combined-capital home prices staying mostly flat in 2026, projecting a 3% drop for Sydney and a 4% fall for Melbourne. REA is tipping a national rise of 5.5% in 2027. RealEstate
There’s another issue for the stock. Sydney and Melbourne listings have kept up, still running 6% to 7% above a year earlier over the first five months of 2026 as fresh homes hit the market. Tax changes may push up investor sales and listings at first, but could cut the overall number of property investors and repeat trades in the long term.
But if national listings drop more than REA’s current 1% to 3% forecast, and residential yield growth—expected at around 13%—slows because agents and vendors push back on more price hikes, then premium products can’t offset the weaker volumes. Earnings forecasts could get hit in that case.
REA’s big plus is still its audience lead and its ability to set prices, with cost growth now expected to be lower. The budget changes don’t kick in until July 2027, so current investments are safe and there’s a window for the market to adjust. But with shares ending Monday on the session low, sellers held the upper hand once the buyback was done.
