Thank you for standing by, and welcome to the REA Group Ltd third quarter financial results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star one one on your telephone.
If you'd like to remove yourself from the queue, simply press star one one again. As a reminder, today's program is being recorded. Now I'd like to introduce your host for today's program, Alice Bennett, head of investor relations. Please go ahead.
Thank you. Good morning and welcome, everyone. My name's Alice Bennett, Head of Investor Relations. I'd like to thank you for joining us to discuss REA Group's results for the third quarter ended 31st of March, 2023. Before we commence, I'd like to acknowledge the traditional owners of country throughout Australia and recognize the continuing connection to lands, waters, and communities. We pay our respect to Aboriginal and Torres Strait Island cultures and to elders past and present.
This morning you'll first hear from our CEO Owen Wilson, who'll provide a brief business update. Then Janelle Hopkins, REA's CFO, will talk to the financial highlights for the quarter. Following this, we'll be happy to take your questions. Just as a reminder, our quarterly numbers are top-line results only, so we're restricted by the amount of detail we can provide. With that, I'll pass over 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's performance for the third quarter reflects the subdued market conditions following 10 consecutive rate rises and lower listing levels compared to the very strong listing level environment in Q3 last year.
The strength of our premium product offerings and the scale and engagement of our audience offset much of the impact of the listings decline. Our Indian business achieved exceptional growth, delivering the strongest quarter to date in both revenue and audience. Looking at our results from corporations for the quarter, revenue was AUD 269 million, a decrease of 3%. EBITDA, excluding results from our associates, was AUD 136 million, a decrease of 13%.
While interest rate uncertainty continued to impact the market, we did see some improvement in conditions during the quarter. House prices stabilized and growing demand resulted in more vendors coming to market than the previous quarter. REA's objectives and strategy remain consistent and clear. We have a compelling purpose to change the way the world experiences property. We're building next-generation marketplaces for our customers and consumers.
We continue to invest in the future growth of our business. I'd now like to take you through the highlights of the quarter. The millions of people who engage with realestate.com.au each month are the key to the value we deliver to our customers. Our site remains Australia's number one address in property in every market across the country. It's clear from the activity on our site that demand for property remains strong.
11.9 million people visited realestate.com.au each month on average during the quarter. In March, we achieved 132 million visits to our platform, the highest number of monthly visits since 2021. 2.7 million people visit our platform on average each day. That's 3.5 times more than our nearest competitor. In a sign of the underlying market health, in March, we delivered the highest number of buyer inquiries since May last year. Moving to our consumer highlights for the quarter.
In February, we launched realEstimate to further drive engagement with the valuations experience on realestate.com.au, powered by PropTrack's AVM. This feature accelerated our property owner tracks and membership growth during the quarter, with property owner tracks up 62% year-on-year, while active members increased 16%.
In a major app navigation update, we launched the My Property tab in early March. This new feature provides a more seamless navigation to our property owner dashboard and drives consumers to our realEstimate feature. Unique visitors to the dashboard in March were up 47% compared to the same month last year. Australia's rental market remains incredibly tough, and our aim is to make renting simpler and more efficient.
Our renter profiles helps tenants put their best foot forward while also simplifying the process for property managers. We saw a 164% year-on-year increase in the number of renter profiles during the quarter. The tough rental market also resulted in more people turning to shared accommodation, with new members on our Flatmates platform increasing 68% year-on-year. While Flatmates is small, it was our best performing Australian business this quarter. Moving to our customer highlights.
As we continue to evolve our core advertising solutions, total Premiere penetration, which includes Premiere Plus, achieved solid growth nationally in Q3. We automated key product features during the quarter with the release of the Scheduler feature in Ignite, which enables customers to schedule a Listings Bump and an eBrochure to boost the performance of their listing.
We also introduced a Recently Sold carousel into the buy section, helping consumers understand current market conditions and enabling agents to showcase their recent sales. In agency services, we're continuing to see strong growth in our customer platform, Ignite. In the third quarter, we reached a milestone of 50,000 users on the Ignite platform, and we also saw a 53% year-on-year increase in monthly active users. The traction gained in our agency marketplace points to a positive sign in the market.
Driven by the success of our realEstimate campaign, we delivered 23% more seller leads in Q3 compared to Q2. We also extended the marketplace product set to our commercial business with the release of Agent Profiles for commercial agents. On the back of the value we've delivered to our customers through Premiere Plus and new features such as smart listings and Schedulers, we have commenced the rollout of our new prices, which become effective 1 July.
This will see the price of our highest penetrated product, Premiere Plus, increase by an average 12%, with other products increasing by at least this amount. Our financial services business continued to be impacted by market uncertainty and reduced activity. From a brand perspective, our focused investment is delivering results and strong momentum in new broker recruitment continues.
Pleasingly, this quarter, Mortgage Choice was awarded Aggregator of the Year at the Mortgage Business Awards. This follows our recognition by The Adviser as Brokerage of the Year in Q2. The pilot launch of our white label products with Athena Home Loans has received a very positive early response, and I'm looking forward to sharing more updates on this at our next results announcement. Moving to our global businesses. REA India's exceptional momentum continued during the quarter with 63% revenue growth, driven by the flagship Housing.com business.
Housing.com maintained its audience leadership with 21% year-on-year growth in audience for the quarter, and achieved 1.3 times more visits than the closest competitor. This is lower than our lead in December, reflecting significant short-term marketing investment by the newest competitors as they approach their year-ends. This has not continued into April.
PropertyGuru Group announced its full year results in March, delivering a 35% increase in revenue for the 12 months to December 2022. The group will announce its 1st quarter results for 2023 on the 24th of May. We continue to progress our environmental, social, and governance goals and achieve some key milestones throughout the quarter. Pleasingly, we received confirmation of Climate Active carbon neutral certification on REA's FY22 carbon emissions.
For the 2nd year running, we achieved a double A MSCI rating in April, with our score classifying REA as an industry leader in the interactive media and services category. Turning to market conditions. The Australian property market has seen property prices stabilize in recent months as a result of limited supply and strong underlying demand.
Demand is being driven by the strength in market fundamentals, including low unemployment, rapidly growing migration, and increasing confidence that the interest rate cycle is nearing the peak. It's my view that we have at least one more rate rise to come, but it's relevant that we're starting to see two and three-year fixed mortgage rates begin to fall. Conditions in the developer and new homes market continue to be very challenging, as evidenced by the recent collapse of several well-known developers.
Given Australia's current shortage of housing stock and growing demand, these conditions must eventually turn around, but it's unclear to me what the catalyst for turnaround will be. While we expect that listings will remain below the very strong prior period comparables until Q2 of FY 2024, there are clear signs of improving sentiment.
Sellers are returning to the market but ironically, low stock levels are keeping some vendors on the sidelines. These are merely deferred listings. We expect to see further improvement as demand, positive price sentiment, and the impending end of the rate cycle increase confidence to list.
We have an exciting pipeline of innovative products and experiences that will increase the value we provide to our customers and consumers. These initiatives, together with our price changes and improved market conditions, provide an excellent platform for our continued growth in FY 2024. I'll now pass to Janelle to provide more detail on our financial results.
Thanks, Owen. Good morning, everyone. For the quarter, group revenue declined by 3% to AUD 269 million. Operating expenses from core operations increased 9% to AUD 133 million. The group delivered operating EBITDA, excluding the results from our associates of AUD 136 million, down 13%. For our Australian operations, revenue decreased by 6%. Operating costs increased 3%.
Looking to our residential business, revenue declined during the quarter, driven by lower buyer revenues. We benefited from the things we could control: the 6% price rise, contribution from Premiere Plus, and increased depth penetration. This was more than offset by a 12% decline in national listings with the continued and significant impact from negative geo mix, with Melbourne down 18% and Sydney declining by 20%.
Rent revenue was up year-on-year with a 5% price rise and increased depth penetration, partly offset by a 1% decline in rental listings in a very supply-constrained environment. Turning to commercial and developer. Revenues increased modestly in the third quarter. Commercial revenues were driven by the 23% price rise and increased depth listings, while developer revenues saw upside from the September price rise, largely offset by lower project commencements.
Media data and other revenues were down year-on-year. We saw growth in all revenue lines except for developer display, which is the biggest contributor to this revenue segment. With developers continuing to face industry-wide cost pressures, some are reducing or delaying their display spend. Financial services revenue declined in the quarter.
We continued to see settlements negatively impacted by fewer new home loans being written across the market and lower average home sizes, with rising mortgage rates reducing borrowing capacity. However, this was partly offset by a growth in refinance activity across the market. Recruitment momentum continued, and we closed Q3 at nearly 1,050 brokers. I'm pleased to say that the integration of Mortgage Choice is now largely complete.
Momentum continued for REA India during the quarter, with revenue up 63% year-on-year. Housing.com's property advertising business benefited from customer growth, a very successful Happy New Homes online marketing event, and we continued to see strong growth in adjacency revenues on the Housing Edge platform. Turning to operating costs. Australian cost growth increased 3% in the quarter. A continued focus on cost management saw employee-related expenses held broadly flat year-on-year, despite underlying salary inflation.
Cost growth was largely driven by technology costs impacted by supply price rises and increased usage and higher marketing spend from the new realEstimate campaign. In India, in line with previous guidance, we continue to invest in both people and marketing to capitalize on positive momentum and cement and grow our audience position.
Strong growth in adjacency services on the Housing Edge platform also resulted in growth in revenue-related costs. Overall, group operating costs increased by 9%. The group's combined share of associates contributed an AUD 0.5 million loss to core EBITDA in line with the prior period. Moving to current trading conditions. Listings remained subdued in April. National residential new listings were down 24% year-on-year, with Sydney listings decreasing 25% and Melbourne down 22%.
As we have highlighted previously, year-on-year growth rates for the fourth quarter will reflect strong prior period listing volumes. In terms of residential buy yield, we anticipate growth of approximately 10% in FY 2023. Yield has and will continue to benefit from the 6% price rise, Premiere Plus uptake, and continued growth in depth penetration.
However, this has been partly offset by significant negative geo mix, given the impact of weaker listings in our high-yielding Melbourne and Sydney markets. In FY 2024, buy yield growth is expected to grow double digit, driven by an average 12% price increase in Premiere Plus, which is now our largest step product. Core Australian operating expenses are expected to increase low single digits in FY 2023. With continued lower listing volumes, we expect Australian operating jaws to be modestly negative.
As previously discussed, planned investment in India will see REA India EBITDA losses widen and peak in FY 2023. This is expected to result in total group operating costs increasing mid-single digits in FY 2023, which compares to our previous guidance for high single digits growth. The group continues to expect a mid-teens loss for combined core contributions from associates in FY 2023, reflecting tough market conditions for these businesses.
On a final note, while rapidly rising interest rates continue to have a short-term impact on the market, we will continue to focus on delivering great value to our customers and consumers, prudently managing our cost base and positioning ourselves strongly for FY 2024. I will pause there. Operator, we will now open for questions.
Certainly. Once again, if you have a question at this time, please press star one one. One moment for our first question. Our first question comes from the line of Eric Choi from Barrenjoey. Your question please.
Good morning, Team. Thanks for the questions. I'll rapid fire. First one, just on the yield, and I know it's hard comparing like to like, your yield versus Domain, but I guess they're calling out a 10% yield increase, including the benefit of Platinum Edge and Social Boost, whereas your 12%, I think, excludes the penetration benefit of Premiere Plus Wave Two.
Just wondering, when you add that in, do you think your like for like yield growth will materially outpace Domain in FY 2024? The second question is, I think versus previous guidance, we're probably taking out another AUD 10 million of cost roughly in the second half. I'm just wondering, should we be annualizing that extra cost out into FY 2024?
Is that sort of like IT thought work stuff that you turn back on pretty quickly? Just the last one, just hearing around the traps that you guys might be launching a Pro subscription in October with leads packaged, and maybe that only comes with a minor increase in the monthly subscription cost. If that's the case, we shouldn't be expecting leads to be a material contributor in FY24. Thanks very much.
Hi, Eric. Firstly, congratulations on the arrival of your new baby. Saw a photo today. Very cute. I'll take questions one and three and ask Janelle to take question two. Look, on yield, I hear what Domain have been quoting around 10%. The reality for us is that we've said that Premiere Plus will be going up 12%.
On average across the country with all other products by at least 12. That, as you said, does exclude the additional uptake of Premiere Plus. It's early days in the rollout of the pricing discussions. We're, you know, we've done the first kind of 2,000 or 3,000 customers. We do all of these face-to-face.
It's fair to say the feedback from customers, they recognize the value that we are providing, and there's been very little pushback on that price. We have seen a number of customers upgrading to Premiere Plus. We won't know the final wash out till end of June, you know, and it's likely that, you know, the customers who wait the longest will be the most hesitant to upgrade.
We're very pleased with the ratio of upgrades and virtually no downgrades. On the Pro subscription, that is the way we'll be going to market in the next half with seller leads. It's a separate subscription, signing up to, for getting seller leads and the bundle of offerings that we're putting into that. You're right, though, because we're launching it into the financial year, and like every new product, uptake is usually slow.
So we're not expecting a material contribution to revenue in FY 2024, but we're really excited about the future of this area. We're delivering increasing seller leads to the customers. They're still very good leads with high conversion rates. Pleasingly, there's a couple of features in Pro sub, which I just can't talk about, for commercial sensitivity, which I think will be exciting to our customers.
Eric, on costs, let me give you a little bit more color around what we've done on costs for 2023 and the implications for 2024. As we saw the market downturn coming for 2023, we've done a number of things. One, we've phased some of our investment spend, so prioritized hard what we're spending in the second half of this year and dialed that back.
Secondly, we've looked at our planned hiring and reduced our planned hiring. We've also looked at, across the board at the cost base and the employees we have and said, "Is there some roles that we could remove?" And we re-removed a small number of roles.
As you play through that into 2024, we will get some of that saving from those permanent roles that we have removed, but some of the costs that are more timing in nature, such as the phasing of some of that investment spend, depending on the market, that might come back. I would also say when you look into 2024, there is still inflationary impacts across the business.
You know, we're still seeing healthy price increases coming through from our technology providers, as well as expectation around salary inflation again next year. I wouldn't annualize the second half into 2024, but, you know, as we always do, we'll look at what the market's looking like and think about our expenses accordingly. As we would normally say, we'll continue to target operating jaws at the Australian and group level into 2024.
Thanks for the color, guys, and then the baby compliments.
Thank you. One moment for our next question. Our next question comes on the line of Siraj Ahmed from Citigroup. Your question, please.
Thank you. Hi, Owen. Hi, Janelle. I lost three as well. Just question on the guidance for FY 2023 in terms of the revenue. I mean, sort of implies the negative jaws sort of implies what, 3-4% decline for the full year? Sort of a deceleration for Q. Is that just the listings? Could you just give us the underlying drivers of what you've assumed, and that'd be helpful.
Yeah. Look, we've said modest negative jaws. We said at the half, you know, it was gonna be line ball either way, depending on what happened on listings. What we have seen so far in Q3 and into Q4 is listings have been softer than we had anticipated, and that will be the reason why we'll be modestly negative. Of the final outcome of the negative jaws will depend on where listings land in May and June.
Janelle, just, does that assume that it's gonna be down 20% plus in the quarter? Is that what you're assuming or?
Oh. We don't know. We don't know yet, Siraj.
Okay.
You look at the April listings.
Yeah.
you know, clearly that was substantially down. May is tracking similarly to April, and we are cycling over strong comps in June, but until the-
Yeah.
the year ends, we just don't know.
Yeah. The other point, Siraj, is we, if we get a rebound in listings, say, in June, that revenue largely gets deferred into July and August.
That's right.
you know, we the closer we get to the end of the year, the less benefit we get from any listings improvement.
Yeah. The other reason I was asking this as well, Owen and Janelle, is because, I mean, I think Mortgage Choice last year had that sort of one-off impact as well, I thought that will be a benefit for revenue in terms of growth in full Q. That's why I was asking that. I understand the listings.
That's helpful. Owen, in terms of yield growth in the next year, I know it's early days, but given, you know, you've been in the market for one and a half months, any indications of where yield could be this, in early days, like is it 2%-3% next year? You would have a indicator of the debt upgrades people have done. Anything you can add color in terms of the question, Eric's question?
Yeah. The eventual yield next year will be influenced by a few things. Obviously, the price is the price, and so we know what that is, and we know where that kind of averages out across the country. We won't know the full impact of additional Premiere Plus sign-ons until we get to June. It's too early to call that.
Look, we're pleased with the uptake, I think it's the ones who have taken it up really quickly are the ones who couldn't get in over the course of this year, and the minute it opened, they went up regardless of what we did with price because of the value. You know, our teams are telling us there's, you know, almost no pushback on the price and, you know, they see the value.
Look, it will be a benefit. It's really hard to quantify the impact on yield next year. The other thing that, you know, is hard to quantify on yield next year is, you know, we've had a fairly big drag on geo mix this year. We'd hope that that drag is just absent next year. I'm not sure it'll be a positive, but let's hope it's not a negative next year.
All right. Lastly, on India, I mean, growth accelerating, which is a positive. Is there any sort of one-offs from, because of the event that you mentioned? Also, I believe in Housing Edge, you increased the rent pay revenue to, or the fee to 1.6, which is a decent increase. Is that in this quarter, or is that yet to come?
Yeah. The event, the Happy Homes event was spectacularly successful. It is an event that we only run in that quarter. We do run two big events a year, one around Diwali and one around this Happy Homes event. The best way to describe it's a bit like a Black Friday event in that the developers come on, and they discount their stock for a very limited period.
Consumers are now well aware of this, and they flock to our site, and the developers realize this is a great way to move some stock, and so they spend quite a lot with it. It is a... I'll call it a one-off because of it only happens, you know, once in this quarter. You can't really replicate it.
It's possible that our customers have brought forward some expenditure from Q4 into this quarter just to really maximize the benefit they get from that event. You know, I'd be surprised if our growth continues at that rate into Q4. On the RentPay product, yes, look, we have put up, the price on that. That is a reflection of the fact that the fees related to that product went up. We put the price up to, maintain our margin, and that is in the Q3 numbers.
That's it. Thanks.
Thank you. One moment for our next question. Our next question comes from the line of Kane Hannan from Goldman. Your question please.
Hey, guys. Just got through as well, please. Just the cost outlook into next year. If we think about even a flat listings environment, you know, given that yield benefit coming through, do you think your jaws will be above that typical 1%-3% range, or is there a bit of catch-up cost coming back in, into FY24 that we should be thinking about?
Yeah, Kane. We have provided, historically, you know, expectation around jaws being 1%-3%. The final operating jaws will depend on what happens with listings. We will get benefit from yield flowing through into next year. From a cost perspective, there is absolutely inflationary impacts flowing through into next year.
You know, salary increases, as I flagged, higher tech costs, and there will be some of the more timing savings we got into this year, you know, flowing back through into next year. We'll manage, you know, things like bonuses. You know, we're taking lower bonuses this year. Hopefully, they'll reset back to being positive for next year. You know, we're not giving guidance around the size of the jaws, but it will really depend.
Yep. Perfect. I suppose finance. Just a sense of how weak the revenue was this quarter. The brand refresh you guys did last year in the second half, was that stacked across the half or sort of mostly in the fourth quarter?
Yeah. The marketing spend we did on Mortgage Choice was more in Q4 last year. You know, it's fair to say that the financial services business has been impacted again, sort of in line with what we saw in the first half with lower settlements driven by just lower market activity. I think the important thing, though, as the revenue has come down from Mortgage Choice, we have taken, continued to take cost action appropriately.
Holding the margin for that business is something that we've been focused on, and we're getting the benefits now starting to flow through from the completion of the integration of the two businesses. I think for financial services, we feel positive about the fact that when the market turns, we'll be ready to capture that upside.
Yeah, perfect. Then I suppose just the pricing contracts. Just interested in the decision to go sort of one year this time around. Just interested to know about why you've done that. Is that, you know, just market uncertainty and then everything that's been playing out or, you know, wanting to get through maybe a higher rate increase as a bit of a one-off? Just interested if you could talk about that, please.
Look, there's a lot at play here, Kane. As you've heard us say before, we think about price over a multi-year period and what we know we're gonna be bringing to market in terms of value. You know, arguably in this market, you know, that might have been a case for doing a smaller increase. We felt the value was so compelling, and the feedback from customers backs that up, that we should go as hard as we have. It gives us flexibility, plus we know there's a bit coming in the pipeline in terms of products and value. We don't wanna flag that now. We'll do that next year.
Yeah. Is that giving, I suppose, flexibility around the Pro subscription and things you could do with that, or is that a sort of totally separate product?
No, no. Pro will be separate. Pro is a charge to agents. It's not gonna go on the marketing schedule.
Yeah.
It's a sub that gives you seller leads, and it comes out of the agents' pockets because of the value comes to them. The price next year, the value I'm talking about for the price increase, on our other products. Is coming. Given we're not gonna talk about that till it hits the market, we're not gonna price for it now either.
Got it. Thanks very much. Thank you. One moment for our next question. As a reminder, if you have a question, please press star one one. Our next question comes from the line of Lucy Huang from UBS. Your question please.
Morning, Owen. Morning, Janelle. I've got three questions as well. Maybe just on the comments you made on cost inflation, how you're still seeing, I guess, salary inflation coming into FY 2024. Just wondering how much you're expecting cost, I guess that inflationary growth to roughly trend if you're factoring kind of the tech spend and salary inflation as well.
Yeah, look, we haven't communicated our salary increases to our staff yet, so it wouldn't be right for me to talk about it here. We are anticipating, you know, clearly some salary growth, but there will be less than current inflation. You know, from a tech spend perspective, the requests coming through from our tech providers are higher than inflation.
Yeah, you think some of the bigger providers like, you know, AWS and those sorts of providers, they're putting through double-digit price increases at the moment.
Yeah. No, that's interesting. Just with Premiere Plus, you mentioned now it's the most penetrated depth product in the business. Just wondering where you have seen the largest upgrades onto Premiere Plus over the last kind of six months. Are there any kind of regions where there's still a lot more opportunity for Premiere Plus penetration to grow coming into next year?
Yeah. The Premiere Plus was the one-time offer that closed at June 30 last year. There's been no additional uptakes to new contracts signed up to Premiere Plus during this financial year. They get to have a second opportunity to sign up as part of the current pricing round that's happening at the moment, Lucy.
Yeah. At the moment, you know, given how early it is in the process, I haven't actually looked at the analysis in quite frank on by geography. I have spoken to our people in each of the states and they're really pleased that they're getting the uptake. I've got the analysis yet, Lucy.
Yeah, no problem. Just last one on Elara. I'm just interested where your visitor lead is at now. I think February, you mentioned roughly 1.6 times. Has that extended over the last three months?
Oh, in terms of our audience lead? Yeah, look, we peaked in the month of December at 1.6. I think the average for the quarter, last quarter is 1.4. We averaged 1.3, so it did come down a little bit. We do have the ability to track marketing spend of the competition over there. What it appears to us is, and particularly in the month of March, as they approached their year-end, they went really hard on buying audience, I think to maybe make some claims in their year-end results announcements. That spend has completely dissipated in April and our lead has rebounded accordingly.
Wonderful. Thanks, guys.
Thank you.
Thank you. One moment for our next question. Our next question comes from the line of Paul Mason from E&P.
Hi. Just two from me. Thanks. The first one, I was just wondering if you could talk through, say, if the current mix stays just stable, is it 2 Q 2024 when that stops being a headwind? Or if not, just the timing on how that would play out if we don't have any more mix to tier restoration. The second one, just maybe more of a strategy around investment in India, 'cause you've done an amazing job controlling costs in Australia, and India sort of looks like the last bit where you've actually got discretionary costs still really deployed significantly.
Just your thinking around, you know, if you see a rebound in competitive markets marketing spend or something like that, like, would you be looking at maybe increasing the losses and not sticking to the trajectory of, like, declining, EBITDA losses over time from growth? Or are you pretty committed to that track from here going out? Thanks.
Thanks. In terms of geo mix, the negative drag from kind of lower Melbourne and Sydney, if you look in the listing numbers, that negative drag from Melbourne Sydney being more negative than the rest of the country is diminishing. We expect that to continue. In terms of the impact in Q1, it could possibly be a small negative still.
We're pretty hopeful that that drag goes away for much of FY24, which would be a nice thing to have. We're not predicting that'll rebound, but, you know, if it does, that would be nice. In terms of India, actually, we were just with the Indian team recently, going through their plans in a lot of detail for next year.
We remain committed to FY23 being the peak last year on an EBITDA basis. The team are very committed to that, and their plans around both revenue growth and the way they will structure their cost base supports that. This short-term expenditure you're seeing from some of the competitors on buying audience, I mean, it is literally buying clicks.
That's really low-value audience as far as we're concerned. We're incredibly focused over there on having the best consumer experience in the market because we found, you know, the idea is you bring consumers to the site, but then you want them to come back. If you've got the best experience, they will come back, even if they try another experience and it's inferior.
We don't think we're going to need to. We didn't respond in the quarter. We could see what was happening. We didn't respond, and sure enough, as soon as they had to pull back on that unsustainable spending, it bounced back in April. We remain committed to that outlook for India.
Thank you. One moment for our next question. Our next question comes from the line of Fraser McLeish from MST Marquee. Your question please.
Thanks. Just first one, just I guess a sort of highish level one for you. You've obviously run the business through some pretty extreme conditions over the last few years. You know, REA has consistently grown its yield. You've got that double-digit through the cycle yield target.
You know, what's what you've seen over the last few years as kinda, you know, in terms of your confidence going forward of being able to achieve that double-digit yield growth, not over just the sort of next two or three years, but over a longer period of time? Thanks. I've got 1 more after that.
Fraser, the way we look at. We do our plan, we do a planning cycle over three years. Part of that planning cycle is looking at value drops, you know, kind of year on year on year. I can tell you right now, we know what the roadmap looks like for the next three years, and we know that roadmap will justify the yield increase. You know, we've set a double-digit yield increase across the cycle. We're in probably one of the crappiest parts of the cycle that we've seen for a long time, barring COVID, and yet we've still managed to achieve that with the value we've delivered.
When I look at what we've got in this pipeline, I remain completely confident with that guidance of double digit across the cycle. You know, even when there's a down year, if the value is there, it justifies the price. We've always said we'll price to value. You know, a price increase for the sake of it is not something we want to do. All of our strategy work in this space is around making sure we've got value drops every year. We can see three, at least three years out on that and beyond in some cases for some products.
Great. That's helpful. Just Janelle, maybe just on the revenue growth in the quarter, I'm just trying to get my head around, I think your revenue was down 4% in 2Q, down 3% in 3Q, yet the listings were down 21% in 2Q, and they're only down 12% in 3Q. I'm just trying to understand what the differential was there. Is it maybe something to do with the write down of trail commissions in the finance business and the timing of that? Thanks.
It's really deferral related in Q3. In the first half we got the benefit of deferral flowing through from that strong June last year, whereas when you look into Q3 year-over-year, we've actually had a drag from deferral, it's gone the other way. That's predominantly the main reason for the difference.
Okay. Okay. Understood. Yeah, thanks.
Thank you. One moment for our next question. Our next question comes from the line of Sriharsh Singh from Bank of America Securities. Your question please.
Hi there. Thank you. A few questions from my side. One on Premiere Plus contracts. Which of the features are property agents most excited about in your latest rounds of conversations? Is it Coming Soon? Is it the Listings Bump? Is it the eBrochure? Second, have you seen any movements in the use of Audience Maximiser product in conjunction with your Prem Plus contracts?
Thanks for that. look, in terms of customers who aren't currently on Premiere Plus, I think the Premiere for Life feature is still particularly in a, you know, what is perceived as a soft market, albeit houses are selling, you know, that list. That is seen as a great feature. Listings Bump, you know, is one that they really like.
The sold brochure is another one. If I had to put it down to one feature, it's Premiere for Life. When you're sitting in the living room, and you can offer it and your competitor can't, it's a pretty compelling feature, and I think that's one of the things that those who missed out last year really wanted to get hold of.
In terms of Audience Maximiser, it's a listings product, and so its performance has reflected the movement in listings. You know, we've sold less of that as we've had fewer listings. It is a product that we are redeveloping at the moment. We've got a plan to improve that significantly in the next two quarters and look forward to releasing that into FY 2024. You're right, it's down year on year in line with listings.
Have you seen people moving on to Prem Plus or people carrying on with Prem Plus? Have you seen a little bit of downgrades on Audience Maximiser?
No.
Is that how we should take it?
No.
No. Okay. Understood. Thanks for that. Quickly on India, where do you see the growth coming from? As in, are you most excited about onboarding more property agents to list their listings? Or are you more excited about RentPay and the Housing Edge platform?
Look, it's gonna come from quite a number of areas. You know, on the housing platform, you know, the great thing about the business there is there's just so much runway to go. Yes, some of the growth will come from more customers. We're nowhere near as penetrated on the customer base as we need to be. That will involve rolling out to more tier two cities.
You know, we're only about halfway through the Tier two city rollout. PropTiger.com had its best quarter ever, and that's our business that sells new developments for commission. That's going from strength to strength. It is helped by a very buoyant property market in India, and we see that continuing across the years.
The RentPay and all of the Housing Edge products, we're expanding the product sets across that. That is gonna give us good revenue growth. That does come at a cost. You know, all of those products typically have a cost of goods sold, but the margin is attractive to us. It's right across the spectrum, which is why we're confident of continuing revenue growth at very strong levels and also making our cost base efficient into next year.
Understood. Just to follow up on India real quick. One, how confident are you about the roll-up in Tier 2 cities and Tier 2, Tier 3 cities in India? I come from probably two observations. One, the average rental in Tier 2 cities and also in metros is very small, probably $200, $300 a month or $400 a month max.
Does that allow pricing, paying power to agents? Second, a lot of the payments happen in cash because people leasing out the apartments want to avoid the tax payments. So how would you roll out RentPay and Housing Edge successfully into some of these markets?
Look, RentPay is a convenience product, and if you've got lots of cash, then there's absolutely no need to use the RentPay product. We're seeing the uptake is considerable. The rollout to Tier two will be more around the listing, the buy/sell offering. The reason why the rollout is being staged. The way we do the rollout is-