Good day, and thank you for standing by. Welcome to REA Group Limited Half Year Results 2024 Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference call is being recorded. I would now like to hand the conference over to your first speaker today, Alice Bennett, Head of Investor Relations. Please go ahead.
Good morning, and welcome, everyone. My name is Alice Bennett, Head of Investor Relations, and I'd like to thank you for joining REA Group's 2024 half year results presentation. Before we commence, I'd like to acknowledge the traditional owners of country throughout Australia and recognize their continuing connections to lands, waters, and communities. We pay our respects to Aboriginal and Torres Strait Islander cultures and to elders, past and present. Today, you'll hear from REA's CEO, Owen Wilson, and Janelle Hopkins, REA's CFO. Owen will talk to our overarching financial performance and strategic highlights for the half. He will then hand over to Janelle to talk to our financial results in more depth, and following this, we'll be happy to take your questions. With that, I will pass to Owen to get us started.
Thanks, Alice. I'd like to welcome everyone this morning and also acknowledge the traditional owners of country throughout Australia and pay my respects to elders, past and present. REA has delivered an outstanding result for the half, driven by strong yield growth and the benefit of more normalized conditions in the property market. Interest rates stabilized, and in the healthy listings environment, customers continued to prioritize our premium products to leverage our highly engaged audience. REA India's momentum also continued, with price, new depth products, and customer growth driving a strong revenue increase. Looking at our results from core operations for the half, revenue was AUD 726 million, an increase of 18%. EBITDA, excluding associates, was AUD 439 million, an increase of 22%, and NPAT was AUD 250 million, also an increase of 22%.
Reported NPAT declined 37% to AUD 127 million due to a reduction in the book value of our investment in PropertyGuru Group. Janelle will provide further detail on this later in the presentation. We've announced a fully franked interim dividend of AUD 0.87 per share, a 16% increase over the prior corresponding period. Before we move into operational highlights, I'd like to spend a moment on market conditions. The Australian property market normalized during the half, with the stronger markets of Melbourne and Sydney leading the way. Nationally, new listings were down just 1% on the six-year average in the second quarter . Continuing the trend from Q1, the two largest markets experienced significant year-on-year increases, offset by weaker conditions in Brisbane, Adelaide and Perth.
Contributing to the health of the market and vendor confidence, interest rates stabilized during the half, and each of the major capital cities experienced house price growth. As property prices and sales volumes lifted, so too, did lending. In December, the value of new mortgage lending was 11.7% higher year-on-year. This slide shows two views of Australia's strong demand for property. The chart on the left highlights national buyer inquiries over the last five years. The extraordinary level of demand during the peak of the pandemic is clear, particularly in FY 2022. In this half, inquiries returned to growth and a 15% increase on the prior year. On the right, you can see the reduction in median days on site over time. Demonstrating the strength of the market, properties consistently sold faster in the half compared to the prior corresponding period.
Median days on site were consistently below the six-year average. We achieved a number of significant highlights, as you can see on this slide. Our app-first consumer strategy saw Australians deeply engaged with our personalized member experiences and continually return to our platforms. Premier Plus depth penetration reached record levels, with customers preferencing our premium products in the strengthening market. Our Mortgage Choice Freedom product suite, powered by Athena, continues to outperform and now represents 6% of total submissions. In India, Housing.com continued its market leadership, and the platform achieved record app traffic. The integration of CampaignAgent is complete, and we're seeing the benefits of the collaboration between the REA and CampaignAgent sales teams with pleasing levels of new client acquisition. Our strategic priorities are consistent and clear, and our purpose is to change the way the world experiences property.
To deliver on this, we're focused on engaging Australia's largest consumer audience, providing our customers with superior value, and delivering our unique data and insights as we extend our core and build next-generation marketplaces. I'll provide highlights for the half from each of our key strategic areas in the remainder of the presentation. Starting with audience. realestate.com.au is Australia's number one address in property in every state. As I indicated at the Q1 results announcement, we have transitioned the reporting of our audience metrics to Ipsos iris, in line with the Australian digital industry. Differences in the Ipsos methodology mean the audience volumes we report today cannot be compared to older metrics, which were based on Nielsen. I'm pleased to say, however, that the most recent official Ipsos data for December shows realestate.com.au had 4.3 x the number of visits for the month compared to our nearest competitor.
Our audience is not only the largest, but our consumers continually return to our platforms and spend more time deeply engaged with our experiences. Demonstrating the strength of this engagement, the total time consumers spent on our platforms in the half was more than 5x that of our nearest competitor. As Australia's number one property app, we also hold a strong 2.8 x lead in app audience. Moving to membership experiences. Our engaging consumer experiences helps deliver the highest quality leads to our customers, while also providing deep insights. Our active membership base continues to grow, increasing 17% year-on-year, and around 70% of all visits to our app are logged-in users. This provides us with greater insight into consumer behavior and feeds our machine learning models to continually enhance our personalized experiences.
Inspections are a fundamental step in the property journey, and in November, we launched a new inspection registration tool. For our consumers, this saves time and helps streamline the inspection process, while for our customers, it enables a better understanding of demand, helping them maximize their campaigns. More than 10,000 customers have already used the new tool in the two months since launch. The property owner dashboard is key to connecting consumers with customers. This half, our market-leading property valuation, realEstimate, helped drive a 62% year-on-year increase in visits in the dashboard. We now have more than 30% of properties in Australia being tracked by their owners. Customers continue to be highly engaged with our premium products, with record Premier Plus depth penetration underpinning residential revenue. Our social extension product, Audience Maximiser, also achieved record penetration.
The strong performance of our advertising products also extended to the commercial segment, with record penetration in our premium commercial products. We achieved strong growth in our customer self-service platform, Ignite, with a 20% year-on-year increase in monthly active users and a pleasing 32% growth in customers on the platform. We continue to enhance value with Ignite, and I'll share some more detail about the platform shortly. I've previously spoken about our new Pro subscription, which officially launched in October. For AUD 599 per month, Pro enhances the value we deliver across our agency marketplace and agency services. It enables agents to win more listings and set their agency apart with premium seller lead products and enhanced agency profiles.
Leveraging the most comprehensive supply and demand data, Pro provides customers with deeper insights into a seller's readiness to sell and helps agents with recommending the right price point, helping build vendor confidence. Uptake remains in line with our expectations, and we're looking forward to sharing more about our progress in the second half. Ignite first launched at the end of 2019. With the addition of many valuable features in the last four years, more than 60,000 customers have used the platform. It's a key differentiator in our customer offering, enabling agents to easily do business via a centralized platform. This slide highlights the value Ignite provides customers. Lead generation, branding, and listings can be managed into one place, alongside access to powerful insights and workflow efficiencies.
Agents recognize the unique value in Ignite and are utilizing it as a powerful tool across the full scope of their work. Turning to next generation marketplaces. Our data business, PropTrack, delivered double-digit year-on-year revenue growth for the half. PropTrack's data and solutions also power many of the group's products and experiences. Our propensity to list score was added to Ignite. Exclusive to Pro customers, this provides greater accuracy on a consumer's likelihood of listing their property for sale, enabling agents to better prioritize leads. This half, PropTrack launched its Observable Market Assessment solution, which enables the digital validation of contracts of sale and helps drive significant efficiencies for our banking customers. Our financial services business is well-positioned to capitalize on the market recovery. After subdued lending conditions early in the half, consumer sentiment improved and submission volumes finished up 1%.
Mortgage Choice Freedom, our higher margin product, powered by Athena Home Loans, continues to perform extremely well and now represents 6% of total submissions. Pleasingly, greater integration with the realestate.com.au app, combined with our ongoing investment in the Mortgage Choice brand, saw overall lead volumes increase 27% year-on-year. Moving to our international businesses. REA India delivered 21% year-on-year revenue growth, with price rises, an increase in depth penetration, and continued customer growth, driving core housing.com revenue. Our focus on SEO and targeted marketing supported the flagship site's audience leadership position. Average monthly housing.com visits finished the year at 1.4 times the closest competitor. We continued to invest in the app experience to grow this audience. We've seen strong growth in downloads and traffic, with housing.com achieving a 46% share of app downloads for the half. Turning to our investment in PropertyGuru.
The group delivered a 13% year-on-year revenue increase in Q3, with growth in Singapore and Malaysia helping offset challenges in Vietnam. Singapore continues to perform strongly, whereas consumer sentiment and transaction volumes remain low in Vietnam, where government policy intervention continues to impact the market. The outlook for Malaysia has been affected by rising interest rates and a weakening economy. From a product perspective, PropertyGuru continues to drive customer value, using machine learning to power a new listings description generator. In North America, Move revenues remain under pressure, with a 15% decline in the first half. After more than 20 years of generally declining interest rates, inflationary pressures in the U.S. pushed the 30-year mortgage fixed rate to around 8% in late 2023.
As a consequence, as you can see on the top chart, existing home sales have dropped to historically low levels, reaching the low point of the GFC. Pleasingly, interest rates have started to decline from the peak, and transaction volumes should rebound as interest rates come down. We've recorded several highlights in the half as we work towards our environmental, social, and governance goals. The group achieved its highest, equal highest employee engagement score of 88%, demonstrating the impact of our high-performing culture and our highly engaged workforce. In December, REA was included in the Australia and Asia Pacific Dow Jones Sustainability Indices for the second consecutive year, placing us among global sustainability leaders. To ensure we stay ahead of consumer expectations and emerging legislation, we've established new programs of work to uplift and expand REA's privacy and security practices and address the proposed new sustainability reporting standards.
Against the backdrop of the strengthening market, REA is well-positioned for continued growth as we invest in our core and expand our next-generation marketplaces. This strong position offers exciting opportunities for the second half and beyond. Finally, a comment on the outlook for the property market. The 2024 calendar year is likely to be quite stable from an interest rate perspective. Following the latest inflation numbers, we're increasingly confident we've reached the peak of the interest rate cycle, and potentially we'll see a rate cut in the second half of the year. In these conditions, with the continuation of strong demand drivers, we expect a healthy property market for the remainder of the calendar year, with a good supply and demand balance. For listings, we expect the current trend to continue for calendar 2024, which is at or around the six-year average.
This is an excellent environment for REA to continue to grow. I'll now hand over to Janelle to take us through the financials in more detail.
Thanks, Owen, and good morning, everyone. REA has delivered an excellent result for the half, driven by strong year growth in a healthy market. From our core operations, revenue increased 18% to AUD 726 million. Operating expenses increased 11% to AUD 287 million. EBITDA, excluding the results from our associates, was AUD 439 million, up 22%, and the group delivered NPAT from core operations of AUD 250 million, up 22%. The group results from core operations differ from reported statutory results, with a number of one-off items excluded. On Slide 36, we provide a summary of the reconciliation between the core and statutory results. The biggest driver of the variance reflects the PropertyGuru impairment, which I'll touch on in later slides. Turning to our Australian residential business and trends in the market.
Residential revenues increased by 19%, with double-digit buy yield growth and stronger listings, partly offset by deferred revenue. National new buy listings increased by 4%, with outperformance of the Sydney and Melbourne markets continuing throughout the half. Sydney and Melbourne new listings saw a growth of 19% and 18% respectively. However, all of the other major metro markets were down year-on-year. Brisbane, our third highest yielding market, was down 6%, and Perth declined 11%. While Q2 listings growth rates were particularly strong, it's important to remember that the prior year, Q2, was close to record low volumes. We achieved an impressive 19% year-on-year uplift in buy yield, driven by the 13% average national price rise, year-on-year growth in overall depth and Premier Plus penetration, and a 3% positive geographical mix impact, with Melbourne and Sydney listings outpacing national growth.
This excellent revenue outcome was negatively impacted by 3% due to revenue deferral. The strong Q1 listing volumes saw a 7% deferral benefit into Q2. However, the strong Q2, November, in particular, saw most of this deferred out into Q3. As we've highlighted previously, while deferrals can at times add volatility to our residential revenues, deferral simply reflects the timing of when listings revenues are recognized and will typically even out across the full year. Rent listings remain subdued, down 2%. However, this was more than offset by an 8% price rise and increased depth penetration, resulting in growth in rent revenues for the half. The following slide shows both the penetration and mix of depth listings in the residential business and the success of our premium listings products.
The first half saw record Premier Plus penetration after another strong FY 2024 recontracting period, with growth in all markets. We not only saw increased total depth penetration, but also continued improvement in product mix, with customers migrating up the depth ladder from Feature, Highlight, and Premier to Premier Plus. Turning to commercial and developer, revenue for the year increased 11%, with strong growth in commercial, tempered by lower growth for developer revenues. Commercial revenues benefited from strong yield growth, driven by an 11% price rise and continued growth in depth penetration. Volumes were higher across both sale and lease, and we saw listings growth in all major states, apart from Western Australia. The developer business has remained challenged, with well-documented issues such as increased input costs and labor shortages, resulting in project launches being down 23% in the half.
Despite this, we saw modest growth for developer revenues, benefiting from the prior year price rise and increased duration, with project profiles staying on the site for longer. Media, data, and other revenue was up 21% to AUD 60 million, assisted by the consolidation of CampaignAgent from July 2023. Excluding CampaignAgent, revenues were flat. PropTrack delivered double-digit revenue growth. However, this was offset by lower programmatic media and developer display. Turning to financial services, revenue increased 4% to AUD 36 million. A 4% reduction in settlements was more than offset by growth in our white label products, driven by Mortgage Choice Freedom products and early signs of stabilization of run-off rates. We were pleased to see quarter-on-quarter improvement in both submissions and settlements.
Submissions improved from a 5% decline in Q1, 7% growth in Q2, and settlements, while still in negative territory, improved from -7% to -2%. REA India has delivered a strong performance during the half, with revenue growth of 21% to AUD 44 million. As the chart on the left-hand side shows, revenue was driven by growth in REA India's property advertising businesses. Housing.com benefited from price rises, increased depth penetration, and continued customer growth. And PropTiger's growth was assisted by strong market conditions. Growth for adjacency revenues on Housing Edge was flat year-on-year, with some user attrition following increased convenience fees. Adjacencies made up 28% of total India revenue in half one, down from 34% in the prior year. India operating cost growth of 7% in half one was driven by higher employee and marketing spend.
I would note that cost growth is expected to be higher in the second half, reflecting both phasing of spend across the year and increased marketing spend. Core EBITDA loss has improved 16% to AUD 19 million for the half. Moving to our strategic investments. Total losses from equity accounted investments was AUD 13 million in the first half. Move equity accounted contribution declined from a loss of AUD 7 million to AUD 11 million. Move's revenue was 15% lower, with the continued market downturn resulting in a 9% decline in leads and lower transaction volumes. This was partly offset by employee cost savings. For more information on Move, please refer to the News Corp results release. PropertyGuru's contribution was break even, an improvement on the AUD 2 million loss in the prior period.
While this performance is pleasing, we have reassessed our PG valuation in light of the continuing property market challenges in Vietnam, macroeconomic impacts on the Malaysian business, and uncertainty over the timing of recovery. Taking this into account, we have reduced the carrying value of our investment by AUD 120 million to AUD 166 million. Despite this write-down, we remain positive on the medium to longer term outlook for PropertyGuru, given its strong leadership position and exposure to long-term growth in its core markets. During the half, we also made two small investments for approximately AUD 10 million, including a 36% share in Arealytics, a provider of commercial real estate information and technology in Australia, and a 21% share in EasyLoan, a technology platform for end-to-end digital processing of home loans in India.
These businesses are early stage and investing for future growth, and we would anticipate them to have a small negative impact on the associates line in the near term. On the next slide is our core operating Jaws. As you can see, Australia Jaws for the half were open. Excluding the impact of CampaignAgent acquisition, core Australian operating costs increased by 9%, reflecting a number of key factors. The largest driver was employee costs, driven by wage inflation, increased payroll tax in Victoria, and incentives, which has increased in line with strong performance. Higher technology costs impacted by double-digit price rises from a number of suppliers and increased data usage, and increased COGS associated to products such as Audience Maximiser. Including CampaignAgent, Australian operating expenses increased by 12%.
As we have highlighted earlier, the group continued to invest to support ongoing growth, with investments focused on a number of new products and experiences across multiple lines of business. Some areas of spend included enhancing consumer experience, including investment into AI, new product delivery, and importantly, continuing to enhance existing products. An example of this would be Premier Plus, where we invested to launch the product, with further investment in the second year for new features, such as Listing Optimiser. We're in the early stages of additional investment that will be required ahead of changes in privacy legislation, with continued spend likely over the next 18 months. CapEx to revenue was 8% in the half. However, we would anticipate a rate towards the top end of our 7%-9% range in 2024 and 2025.
As a result of the continued investment, total depreciation and amortization is expected to be in the range of AUD 110-114 million in FY 2024. Turning to our cash position, we ended the half with a strong closing cash balance of AUD 314 million. The group delivered operating cash flows of AUD 272 million, which is the addition of the first four blue bars on the graph. As you can see, the strong operating cash flows allowed us to continue to invest in the business organically and through M&A, and also deliver strong shareholder returns in the form of increased dividends. At 31 December, the group's total drawn debt was AUD 398 million, of which post-balance date, we have subsequently repaid AUD 124 million.
Finally, on current trading, January national residential new buy listings were up 12% year-on-year, with Sydney and Melbourne listings both increasing by 28%. December and January listings are notoriously volatile, given smaller months for listings and a number of public holidays. The combined listings for December and January were in line with the six-year average. If this trend continues for the remainder of the financial year, we would anticipate FY 2024 year-on-year listings growth of between 3% and 5%. Residential buy year growth is anticipated to be lower for the second half, as the first half outperformance of Melbourne and Sydney listings is unlikely to continue for the entire period. We continue to target positive operating jaws and have lifted our expectations for FY 2024 group operating cost growth from low- to mid-teens to mid- to high-teens.
Excluding M&A, operating cost growth for both Australia and India is expected to increase low- to mid-teens. Growth in Australia will reflect increased employee costs due to accelerated strategic investments, higher technology and marketing costs, and an increase in revenue-related variable costs. While India will be driven by higher marketing spend and continued growth in employee costs. EBITDA losses in India are anticipated to be lower in FY 2024 compared to FY 2023. The group expects losses from combined contributions from associates in FY 2024 to be between AUD 25 million-AUD 30 million, reflecting continued tough market conditions in the U.S. and investment for future growth by early-stage new investments. On a final note, we are excited about the opportunities ahead and remain focused on investing prudently across our Australian and Indian businesses to drive growth for both FY 2024 and beyond. I will stop here.
Operator, can we please now open the line for questions?
Thank you. We will now conduct the Q&A session. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by as we compile the Q&A roster. Our first question comes from Lucy Huang of UBS.
Hello.
Hi, Lucy.
Can you guys hear me?
Oh, yes.
Janelle, hello. Oh, perfect. I've got three questions. I might just ask them all together. Just firstly, with January volumes, I think, up 12%, and you've mentioned January is quite volatile due to holidays. But just wondering, like, you know, given a strong start, what should we be expecting in terms of comps for seventh March, given you've held for now that kind of listing growth guidance of 3%-5%? And then just as my second question, any color you can shed on how you're seeing Brisbane and Perth volumes coming into January, just to get a gauge on, I guess, how geo mix is going, whether geo mix is starting to unwind, in this quarter? And then just my third question on Premier Plus, penetration was very strong, again, this half.
Just wondering if you can just talk about how much this contributed to, I guess, depth growth in the quarter, and I guess how much more scope do you think Premier Plus in terms of how much more penetration can we actually see moving forward? Thanks.
Thanks, Lucy. I'll take questions one and two, and Janelle will take three. In terms of listings, you know, they were very pleasing in January, and it is a very low listings month, so it doesn't take much volume to get some high percentage movements. We're, you know, now a week into February, that trend is continuing into February. The market remains up at sort of similar levels, and Melbourne and Sydney are still kind of leading the way in terms of that growth. And the outlook, you know, in sort of the next few weeks, just speaking to customers, you know, they are very, very busy. So it does look like, you know, that momentum is gonna continue into February and possibly into March.
If it does, you know, we're likely to be closer to the top end of that 3%-5% range we've given, but we still think within it. In terms of your geo mix question, Brisbane is recovering. You know, Brisbane listings were down in the first half. As we move into the new year, they've turned positive. So it does feel like that momentum we have in the market, where sort of Melbourne and Sydney lead us into declines, and then they lead us out, it feels like the others might be starting to catch up, which would, which should, you know, diminish that really positive geo mix a little bit in the second half, which is what we flagged.
And on overall depth, penetration, and mix. Look, we were really pleased with the recontracting period we had last year, and you can see that on the chart where Premier Plus continued to grow as a percentage overall. When you think about that 19% year growth kind of flagged at 13% price. We did have a healthy contribution, more from mix than depth overall, but still, yeah, contribution from both. We got the 3% from geo mix, but we did get that overall year growth slightly tempered by lower subscription and add-on revenue growth. So it was a healthy number for the half. And, you know, I would continue to say we're not done. I think there's still a lot of opportunity we have to continue to increase further up the overall depth tiers over the coming year.
Thanks, Owen. Thanks, Janelle.
Thank you. Our next question comes from Eric Choi of Barrenjoey. Please go ahead.
Thanks, team. Good result, I think. Just gonna double-check if it is through the question. So just quickly, first one, on your jaws-
It definitely is, Eric. It definitely is.
Well, well, well, the first one is I'm like, well, you guys have kind of upped your cost, but it feels like that's on the back of better revenue. So just thinking through the logic, I think your revenue growth needs to be potentially around 20% for the full year for that cost guidance and kind of your low single digit historic jaws to work. And so if that's the case, it kind of implies the second half revenue growth needs to accelerate versus the 18% you did in the first half. And I wonder if I've stuffed that logic up, Janelle, and if that's right, can you just confirm it's like the revenue deferral normalization, and then you're comping that finance right down?
So those are the kind of the key reasons why revenues should accelerate in the second half. And then second one, just I guess, I'll follow on a market mix, but more from FY 25, 'cause you guys are very helpful when you tell us the national listings are tracking in line with the six-year average. But if I look at CoreLogic data, it looks like Sydney and Melbourne might be about 10% above. I don't know if that's right, but if it is, does that mean there's a potential market mix headwind into FY 25?
And then, and then thirdly, I, I know Owen's not gonna comment explicitly on, on price increases, but just thinking about how you guys think about it, which is in three-year blocks and, and on total yields, just logically, it, it feels like 25 could be a bit higher to offset any market mix, and if there's no new product drop. But then as we go into FY 2026, would we be thinking, could it be a bit lower if you decide you're not gonna do a new product drop and there's no sort of market mix headwinds? Thanks very much.
Okay, I'll start, Eric. You know, obviously, second half revenue, we have a line of sight over part of the yield, but will really impact, be impacted depending on what happens around things like geo mix and overall listings. But you're right, some of the drivers that have dragged in the first half around revenue deferral is likely to unwind in the second half. I need to put a damper on that. Depending on what happens around May and June listings, well, could potentially impact that number, but overall, you know, you would expect deferral to normalize into the second half. And you're right, we will do another review of the loan book in the second half, but assuming that's not there, you would anticipate that to reverse and have no impact in the second half.
So that will be a benefit. And then thinking about cost, well, just a couple of points on that. You know, we did flag in Q1 that we partly, you know, we're phasing our costs into the second half, and that was already planned in our expectations for the budget. And we did also say in Q1, we wanted to see line of sight over how the market was performing and our expectations on revenue before making any decisions around looking at our cost base. And based on what we know today, we have made a decision to uplift our overall costs to accelerate some of our strategic investments in line with what we can see from a revenue perspective. So, you know, we're on balance, you know, very comfortable with the cost guidance we've given and our expectations for the full year.
Look, I'll take the mix and price questions, Eric. You're right, you know, Melbourne and Sydney are currently trending above the six-year average, and then the other geographies are obviously therefore trending below the six-year average, which is why the national numbers are kind of at. You know, as I said in the remarks, I think we're gonna have, hopefully, one of the most stable interest rate environments we've had for some time this year. You know, at worst, we might get one rate rise, but I don't think so. And, you know, we probably won't get a rate cut till towards the end of the year, so it could be a very benign interest rate environment. There's still incredibly strong demand.
We've still got very healthy levels of immigration, despite the government efforts to dial that back. And so when demand is strong, when the lenders are out there lending, it's a great market to sell your property. And prices are therefore going to, I think, hold across the course of the year. So in that market, you know, we'll have good supply and good demand. As we go into 25, obviously, yeah, we will cycle over some pretty strong Sydney and Melbourne comps. But I think they'll be offset by better performance in the other markets. Now, the impact on geo mix will possibly be slightly negative. It really is hard to call. Total listings are what I'd focus on.
I think, you know, at this rate, if we stay at this, this number, yeah, you're probably looking at, you know, flattish listings going into 25, which, a reminder, flat listings is great. I mean, we do very well in a flat listings environment. In terms of price, a couple of assumption flaws in your thinking there, Eric. I mean, the, the comments on no product drops, I wouldn't assume that. I can't think of a year where we haven't improved features or launched new products, so, that's probably not a valid assumption for 25 and 26. In terms of our pricing, it, it's the same construct that we always have. We price according to the value that we think we're delivering and that we can justify with that value. We're very confident we're continuing to deliver value.
We've got more value coming. I can't tell you what it is.... And who knows? We may have more products. I can't tell you that in advance. What I can tell you is we've signed off on our price increase this week with our board, and we'll be taking that to market towards the end of March.
Can I, can I follow up on Janelle's comment? Just putting together Janelle's comment on, on more cost marketing and, and more value. Like, just looking at your depth data, your depth is going up, but our, our scrapers suggest that your depth is going up in, in some of the geographies where Domain depth is falling, such as VIC and WA. So I'm just wondering, did some of that cost to do with? I don't know how to put it, but I guess putting the foot down and building the lead versus the number two?
No. Look, no. In short, you know, I think what you're seeing is customers voting with their feet in those geographies, according to value and audience and leads. You know, we're not spending money to try and drive particular geographic penetration. You know, that's not where it's going. We've got a lot of things we wanna build, to deliver future revenue growth, and the rate at which we build them depends on the rate of our revenue growth. And so we've always tried to manage those positive jaws, and we wanted to get a greater line of sight on this revenue recovery before we decided to take those actions to start investing for FY 2026 revenue growth and 2027 revenue growth. And that's what we're doing.
We've also got things like privacy we've got to invest in, which, you know, don't have a direct revenue correlation, but it is something consumers will value increasingly. So we're all gonna have to do that. But no, it was us, it was us taking deliberate, I think, cautious decisions in the first half. And now that we're more confident on the size of our revenue this year, we can make more strategic investments.
Good one. Really helpful. Thanks. Thanks, Owen and Janelle.
Thank you. Our next question comes from Tom Beadle from Jarden.
Oh, hi, guys. Thanks for the opportunity to ask some questions. Just my first question is just a clarification on the cost guidance. You know, you've obviously got better visibility on your revenue, which has obviously given you the confidence there to invest. What I'm trying to understand is how much of this increase is a pull forward versus an incremental step up into FY 25. I know you're not gonna give FY 25 cost guidance, but it'd be great to just understand, I guess, the nature of this step up a bit better. And just on commercial and developer, I thought it was nice to see the solid performance in that business. But a couple of questions there. Just, in developer, Janelle, you mentioned that it benefited from higher duration with project profiles.
I guess, how much of that duration benefit could potentially unwind, if conditions then normalize? And just generally speaking, how should we be thinking about where each of those commercial and developer businesses currently sit versus mid-cycle? Thanks.
So, Tom, is your first question on cost is more the phasing first half into second half and the step up? Is that where you're kind of-
And pull forward.
And pull forward? So I would say-
Yeah, just understanding if there's a pull forward into 2024 from 2025 or if that sort of annualizes and the base we should be thinking about a higher base in 2025?
It's not really a pull forward. It's more the fact when we think about our overall slate of things we wanna do, we have a waterline, and we think about, you know, what are the must things we have to do and what are the things that we can flex up and down, depending on what's going on from a market perspective. As we flagged it in Q1, you know, we were cautious going into this year, not knowing what our expectations were around what was gonna happen from a market perspective. You know, we had a line of sight on part of yield, but not on listings. As we now look forward, we've got more confidence, and therefore, that waterline can expand to include more things that support either revenue growth, consumer experience, investment in AI, those type of things.
So it's not necessarily a pull forward, but just more the balance of how much we think we can afford. And then your question on developer. Yeah, look, we are getting enough benefit from duration, which is pleasing in the current market and offsetting some of that, softness in overall project launches. Over time, assuming the market returns and more project launches come in, and if the demand's there, duration may start to come in a bit, but that we would expect that to be offset by those higher project launches and benefit from that. So I think it's a nice balance at the moment that's supporting that. And look, you know, we're really pleased with our commercial business as well.
You know, we've benefited from increased price and increased depth there, and that listings market is holding up relatively well, and we don't see that changing in the short term.
Yeah, it's a very healthy commercial market. You know, if you compare it to the cycle or mid-cycle, I think that's probably bang in the middle. You know, it's whereas the developers at the bottom of the cycle, and I think we're entering our fifth year of reductions in new projects. That'll turn and, you know, the benefit of new projects will far outweigh, you know, minor contractions in duration.
Great. Thank you.
Thank you. Our next question comes from Kane Hannan of Goldman. Please go ahead.
Morning, guys. Just a couple from me as well, please. Just commercial and developer again. Try to understand the sort of quarterly phasing in that business. I think back at the one, two, you were saying developers were flat, commercial was similar to where the... Yet you punched out 11% growth for the half. Did, did develop have a, a really strong 2Q? Is it deferral to something I should be thinking about that might have helped the commercial side of things, or just trying to understand what's happening there, please?
Commercial was better in Q2 versus Q1, so we did continue to see the benefit of increased depth penetration and listings in commercial. Same with developer, actually. We saw the benefit also in display and the benefit in duration also continue to benefit into Q2 versus Q1. That duration has been continuing to go out each quarter. So, yeah, the-
Yeah, okay.
We have a stronger Q2 than Q1.
Yeah. Then just obviously pulling up the cost guidance, as you've been discussing. I think back at the 1Q again, you were saying some of the benefits of any change to cost guidance would flow through or could flow through into FY 2025. But I think the comments before were saying for, you know, a 2026, 2037 pricing story. So I suppose, am I just taking comments out of context, you know, from back at the quarterly, or, you know, have we— is there a change in thinking around the, the 2025 benefits from this step-up in cost?
A lot of the investment we make in building features and products that will drive future revenue. So you're kind of incurring a cost now, but you won't get the revenue until obviously you launch that product or you bring in that feature to market to underpin a price increase. I don't know if that answers your question, when we're kind of spending before we get the benefit, if that's what you're asking.
Yeah, I mean, that makes sense. Sorry, I think you were just saying back at the 1Q, it could benefit your FY25 numbers, but that's fine. And then just lastly, PropertyGuru-
Oh, no. Yeah, I think it's—I think in Q1, we were talking about—we were already working on feature sets for the FY 2025 price increase back then. I think that's what we were talking about.
Yep. And then PropertyGuru, and obviously the investment in the half, is that a bit still core for you guys? You know, if we have a lot of optionality with the cash on the balance sheet, from the, you know, from a broader perspective, but just interested in how you're thinking about PropertyGuru and where we are.
Yeah, look, you know, it... You were seeing, what you're seeing in that change in the valuation is, you know, near-term reductions in growth rate assumptions for Malaysia and Vietnam. You know, for the reasons we articulated it, it's got a government intervention in Vietnam, and it's the economy, you know, with an election later this year in Malaysia. So those, you know, assumed growth rates were reduced, which affected the valuation, but they're still growth rates. So, you know, these are still growth businesses. And we've got a 95% market share in Malaysia, and a 70% market share in Vietnam. They're very good markets with very strong market positions. And yes, while the, you know, the near-term assumptions have softened, we think they're very exciting markets to be in.
Got it. Thanks, guys.
Thank you. Our next question comes from Entcho Raykovski from E&P. Please go ahead.
Morning, Owen. Morning, Janelle. My first question is hopefully a very, very straightforward one. Are you able to confirm whether the depth benefit to resi revenues was circa 3% in the first half? I mean, it seems like a pretty simple calc, given it's also in the 19% yield growth, less than 13% price and 3% geo mix. But if there's any other factors in there that we need to take into account, would be sort of good to know. And given that, should we expect a similar sort of benefit into the second half, given the contracted visibility?
Yeah, look, that was a bit more than the 3%. We're not giving out the exact number, but the overall 19% was partly softened by some of our add-ons, which were also healthy growth, but at a lower percentage. So the depth and mix was a healthy contribution to that first half result. And then the impact on the second half will really... Probably the biggest impact is likely to be what happens from geo mix, and that might play into the overall outcome, which is just what we've been flagging, the expectation that the geo mix will benefit for the full of the second half.
Okay, great. And, I mean, given the success of Premier Plus, it's now very close to the entire Premier customer base. How do you think about the scope to introduce further depth tiers? Does that strengthen your conviction in being able to do it?
Yeah, look, I'll say what I always say on this: Look, we have a multi-year strategy in terms of product and feature drops. I'm not going to flag what that looks like. You know, you'll find out about it when our competitor finds out about it.
Okay, fair enough. And then, maybe a last one. Just looking at the reaction of the market, yeah, this is talking about the property market. Following your 13% price increase in July last year and the mix benefit which you've seen, have you seen other elements of the marketing budget or marketing schedule having to be taken away in order to accommodate for that increase? I mean, just interested in whether, like, what you're hearing from agents, are you getting pushback? And perhaps how does that play into your thinking around the price increases when it comes to July this year? I appreciate you've taken it to the board, but I suspect you've considered it.
So no, we haven't. One, we haven't seen any pushback. You know, at the time, we kind of put that price into the market, it was very generally well accepted. You know, we could point to the value. It was very easy to demonstrate what we were delivering to our customers and to their vendors, and so, we've had no pushback on that, and I think our penetration numbers would absolutely back that up. In terms of the schedules, we're not seeing. We're definitely not seeing any contraction in schedules, you know, and, you know, CampaignAgent gets a reasonable view on the size of marketing schedules, and so they're not contracting.
You know, whether other smaller things are being taken off, you know, there are a lot of small sites out there that, you know, charge AUD 50 or AUD 100 to get on a schedule. You know, I haven't seen any evidence of those coming off either. So, you know, we feel pretty confident that the price we're planning to take into FY 2025 will also have a similar level of acceptance.
Sorry for the multiple questions, but are you seeing the schedules expanding in order to accommodate the price increase?
It's hard to get a like-for-like view on that. You know, it's not like the same house is being sold multiple times. You know, different houses justify different schedules. Agents are great at selling marketing to vendors, and long may that continue. I don't have a definitive answer to that for you, Entcho. Sorry.
Nah, that's fine. Still very useful. Thank you.
Thank you. Our next question comes from Darren Leung of Macquarie. Please go ahead.
Morning, guys. Thanks for the opportunity. I just had two, please. One was just on the geo mix piece, and so we're obviously looking at pretty record levels of listings in Sydney and Melbourne for the half. But given the sort of record levels in these two states, can you give us a bit, an indication as to why the geo mix wasn't as strong as expected? Just given what's happened in prior periods, I would have thought the geo mix benefit would have been a bit higher, please. And then maybe the second question was just around the Pro subscription that was launched in October.
Any quantification around take-up so far would be of interest, but in particular, I was keen to understand a bit about, are agents more likely to take this product up in a stronger market, as we expect this coming in the next 12 months, or a softer listings market, please?
The geo mix at 3% was actually a really strong uplift from Melbourne and Sydney, and fairly consistent with what we also saw in Q1. The drag to that is Brisbane, which is our third highest yielding at state, was actually down 6%. So that just started to moderate it a bit compared to the rest of the national average. But from a dollar perspective, geo mix was a strong contributor to the overall revenue results.
On Pro, Pro is going very well. It's rolling out in line with our expectations. You know, we've always flagged this would be a slow burn product because it's not like an advertising product. This is a change in the way our customers operate, moving towards effectively our operating system for the way they win new business. And so it's a longer sell, and it's a bigger decision. And some customers, you know, have to wait to roll off existing contracts and have indicated, you know, they'll take our product up when they do. The feedback from customers has been incredibly positive. You know, our comparative market analysis tool within Pro, we think is clearly the best in the market. It's got our market-leading demand data in it, and no one else can provide that.
Whether it sells more in a good market versus. I don't know an agent who doesn't want to win more business. And what I can tell you, in a very short period of time, that Pro customers are getting about twice as many seller leads off the site, from the Pro product than a non-Pro customer. So it's a pretty good proof point. Agents also love the branding that you get from it, so the feedback has been quite positive. But I said this will be a slow burn, because of the nature of the product. But, you know, so far, so good.
Got it. Thank you.
Thank you. Our next question comes from Siraj Ahmed of Citigroup. Please go ahead.
Hi, Owen. Hi, Janelle. I have three questions. I'll ask them one by one, if that's okay. Owen, in terms of 2025, I know you don't want to talk about price increases, but just regarding mix of price and yield, 2024 is more price and 2023, 2022 is more even. Should we think, given you're talking about new products and everything, that 2025 is more of an even contribution, or is it really gonna be price-led as well?
Look, again, I'm not gonna flag, you know, what's gonna happen in 2025 until we've announced our price. I mean, you know, price will be a fair driver in 2025, for sure. But, you know, alongside that price is value. And, you know, we'd like... You know, so much of our yield growth this year is customers choosing to buy more premium products, and we wanna, we always wanna be able to do that to them. So again, I'm not gonna flag, what we're gonna release in terms of product and features, but, you know, it will be a combination, I would think, of further choice in premium products together with raw price, will drive our revenue growth into next year.
Got it. Second, Owen, just on the Pro subscriptions, right? Where are customers rolling off from? Like, what are they giving up to roll into Pro, I guess, right?
Look, there's a number of competitors who are providing slivers of the product. So, for example, you know, CoreLogic has a CMA product, but as I said, you know, they don't have demand data, so, you know, ours, we think, is superior. So some have bought these services individually. Others, you know, we're not taking it from anywhere. You know, the actual branding you're getting, that's just additional value. The seller leads, you know, agents have been paying other providers of seller leads. We think we've got better seller leads. They converted about, you know, 30%-33%. You know, so they're very good quality, you know. So, some of the stuff we're offering, they're, they're competitors and others, other parts there aren't.
Got it. General, just on OpEx, just two parts. Can I confirm that you're expecting positive jaws in second half 2024 as well? I know you're giving full year guidance, just confirming that you're expecting in the second half as well.
Yes, we are anticipating jaws to be open in the second half. That's what we're targeting. Yeah.
Thanks. And just into 2025 as well. I know, I know historically you said 1%-3%. Would expect no change to that, right? You think similar lengths?
Oh, yeah, it's very early to talk about 25. We've always said historically, you know, our jaws have been 1%-3%, but it just does depend more broadly on what's happening from the market and the revenue perspective, particularly with listings, and that's what the big change around that would could be. But 1%-3% is always a good rule of thumb to start with.
Okay, helpful. Thank you.
Thank you. Our next question comes from Sriharsh Singh of Bank of America. Please go ahead.
Yeah, hi there. Three questions from my side. One, looks to me that the PropTrack at 3.2 million is growing very substantially at 41% YOY. So what's the plan for that, and how do you plan to utilize that data? Does that also help you improve your seller leads product? The second question is, on another depth tier, do you think you, you're under-monetizing, premium properties, properties that are listed for more than AUD 10 million, and maybe there's scope to introduce another depth tier for them? And lastly, on your India revenues, the core revenue growth seems to be growing very strongly at 2%, much higher than adjacencies, which is pretty positive in my view. What's been the driver of that?
Is that new home sale or more property agents in India listing, the secondary sale listings? Over to you. Thanks.
Thanks. We'll make this the last set of questions. In terms of PropTrack, it is a powerful generator of seller leads. I think the number is something like 39% of seller leads are coming from properties where the owner has tracked. So it does help drive our consumers towards our customers from a seller lead perspective. It's also a great source of finance leads for Mortgage Choice. You know, if we know who the consumer is, where they live, how much they pay for the property and what it's currently valued, in terms of being able to put the relevant mortgage products in front of them, you know, it's a great driver of those leads as well.
So, we're delighted we've gone through 30% of properties being tracked by the owner. Next step, next stop is a third, and then, and we, we've gone beyond that. So very, very pleasing, and it's been driven by, you know, our market-leading valuation product in realEstimate. In terms of premium products for really expensive properties, look, it is a conversation our customers have with us. Agents, you know, can get a lot of marketing dollars for those types of properties and are always looking for innovative ways to spend it. But again, I, I'm not gonna flag a product roadmap, you know, but it, it, it definitely is an opportunity.
Our India growth really is in our core thousands of a combination of factors. It's why our customer numbers overall increased, prices got put through in July, plus also increasing up the depth penetration tiers. So it's a combination of things.
Well, we're at time, everyone. Look, thank you so much for joining us today. A very extensive call with lots of questions, so I really thank you for that. Janelle, and I, and Alice are looking forward to seeing many of you in the coming days. Thanks, everyone.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect. Have a great day, everyone.