Thank you for standing by, and welcome to the REA Group Limited Half Year Results 20 21 Conference Call. All participants are in a listen only mode. There will be a presentation followed by a question and answer session. I would now like to hand the conference over to Mr. Graham Curtin.
Please go ahead.
Good morning and welcome everyone.
My name is Graeme Curtin, General Manager of Group Reporting and I'd like to thank you for joining Aurier Group's 20 21 Half Year Results Presentation. Today, you'll hear from Aurier's CEO, Owen Wilson and CFO, Janelle Hopkins. On will talk to our overarching financial performance, the Australian property market and strategic highlights for the year to date.
We will then hand over
to Janelle to talk to our financial results in more depth. As always, we will then be happy to take your questions. I'll now hand over to Owen to
Thanks, Graham. I'd also like to welcome everyone this morning. REA delivered a remarkable result Given the market volatility and economic uncertainty we experienced in the first half of this year. This is particularly true given the Melbourne market came to a virtual standstill 2 months during the COVID-nineteen lockdown. Our teams delivered so much this half as outlined on this slide and we'll cover these achievements in more detail throughout the presentation.
Turning to our results from core operations for the half. Revenue was $430,400,000 a decline of 2%. EBITDA after share of associates was $290,200,000 an increase of 9% And NPAT was $172,100,000 an increase of 13%. These results include a significant reduction And core operating costs for the half down 13%. The Board declared an interim dividend of $0.59 per share fully franked, In Australia, the residential market had a very strong finish to the year.
National Residential Listings increased 4% to the half driven by the easing of COVID restrictions combined with increasing consumer confidence, Record low interest rates and healthy bank liquidity. The commercial business had a significant decline in listings due to the economic impact of COVID and Assisted by state and federal government stimulus measures and record low interest rates. This environment has Contributed to a resurgence in demand for new housing with inquiry volumes on our site increasing 84% year on year. Janelle will provide more context in her update. REA's growth strategy remains consistent and we've made excellent progress On the delivery of key initiatives during the half.
In Australia, we've continued to deliver record on each numbers and I'll cover this in more detail on the next slide. We've spoken previously about our strategy to create value for our customers by connecting them with prospective vendors. Create a market leading win listings offering for our customers. I'll cover this in more detail shortly. In India, we took a controlling interest in Alara Fundamental to our success is growing the number of Australians turning to realestate.com.au for all their property needs.
On average this half, we received over 115,000,000 visits each month, up 36% year on year Over 12,000,000 people visit realestate.com.au each month on average, up 39% year on year. And in November, we set a new record of 13,000,000 people or 65% of Australia's adult population. This was 6,000,000 more people than the nearest competitor. Our app also saw phenomenal usage With an average of 50,900,000 launches each month, up 46% year on year and people are spending almost 4 times longer on our app compared to the nearest Pleasingly, 6,500,000 Australians use realestate.com.au exclusively for their property needs. Our audience is a powerful source of high intent property seekers driving more high quality leads to our customers.
Core to our consumer strategy is cultivating lifelong relationships with people right across their property journey. Our unique data provides REA with the ability to deliver highly personalized experiences. In December, we launched our property owner dashboard. This experience Provides rich information about the key milestones of selling, renting, renovating and financing a property to help people make the most informed decisions. Using the powerful combination of our consumer behavior data, property supply data, content and calculators, owners can now access information personalized to their property This new dashboard encourages owners to take the next best action for them, Answering questions such as whether it's a good time to sell, the value of their property, alternative home loan options and how much could they rent their property for.
While very early days, over 100,000 owners have already accessed the dashboard to consider the next step in their property journey. The strength of our relationship is demonstrated by the 52% increase in properties being tracked by owners, while the total number of properties being tracked also grew significantly Almost $2,500,000 Turning to our customers. The pace in which the industry is adopting digital solutions post COVID places REA in an excellent position to connect our customers with more property owners. We know that increasingly, vendors are coming to realestate. To determine which agency and which agent to use to sell their property.
Today, our existing suite of products and features such as agent profiles, Ratings and reviews and agent match help our customers stand out from the competition and generate vendor leads. Building on this offering, this slide illustrates the exciting new ways REA will help agents connect with more prospective vendors and win their next listing. Our products Through our partnership with RealCare, agents can build customizable presentations to share with vendors and secure the authority to list on the spot. Our new offering will transform the way our customers present themselves to potential sellers. Our partnership with Campaign Agent, Owner of BPA Pay, the market leading buy now pay later solution for vendor paid advertising allows customers to provide prospective vendors with choice and flexibility around payment options for the advertising campaigns.
This new suite of products has been tested extensively with our customers receiving overwhelmingly positive feedback. We officially launched our customers in the coming months. Turning to REA's unique data and insights. This month, our Hometrack Data business will be rebranded to PropTac, representing REA Group in market as a trusted leader in property data and Our REA Insights experts combining this property demand data with price and listings data to provide personalized information to customers And consumers. We published close to 200 pieces of expert analysis and reports during the half, while delivering 3,000,000 weekly EDMs Our key focus of REA's growth strategy is building next generation marketplaces.
Expanding our rent offering is core to this priority. Realestate.com.au is the clear number one place With over 21,000,000 average monthly visits received to the rent section, this is up 23% year on year. Building on our rent Our vision is to seamlessly connect property managers, tenants and property owners through innovative products that deliver an enhanced As part of this journey, we're centralizing the collection and evaluation of tenant applications on our self-service This means consumers will provide and have their application information verified once rather than repeating the process each time they apply for a different agency. Our goal is to make the application process Faster and more user friendly with increased security and privacy protection for consumers. For property managers, We're targeting a reduction in the average time it takes to evaluate applications of 90 minutes to 5 minutes.
This new rental application workflow is fully integrated and consumers can now inspect, search and apply directly to realestate. Today, we've processed over 4,000 applications using this new integrated process and while still very early days, Feedback has been very positive. We look forward to delivering significant operating efficiencies as we onboard more agencies to these new offerings. Turning now to our international businesses. Across Asia, trading conditions continue to be difficult due to the significant impacts of COVID-nineteen.
This combined with a number of one off factors distorted the reported performance of the business. Janelle will talk to this in more detail. Our business has continued to innovate around the property experience to deliver increased value to customers and more consumer features Grew site visits by 35% year on year. The recently launched My Property Pro customer platform saw a strong uptake with 80% of customers migrating to the new way of operating and depth penetration continue to increase despite the market conditions. In Singapore, where we have a 27% interest in 99 Group, the business acquired a well established property portal and data business SRX to Pleasingly 99 Group delivered strong audience growth led by the performance of 99.co andruma123.com in Indonesia.
In December, we are delighted to confirm our controlling position in Alara Technologies, which operates the Indian websites housing.commakhan.comandproctiger.com. During the half, Digital adoption of real estate accelerated with the housing.com audience growing 57% year on year. While Indian market has been heavily impacted by COVID, We're confident that as more normal conditions return, Alara is well positioned to become India's number 1 digital real estate business. Our business in the U. S.
Had a great half benefiting from strong consumer demand with unique users and leads reaching This was despite active listing volumes remaining at historically low levels. Realtor.com Increased average monthly unique users across web and mobile sites for the Q2 by 37% year on year to 80,000,000. At REA, we're committed to continual improvement of environmental, social and governance measures. We've set ourselves ambitious targets. In November, we're delighted to announce a number of key milestones including the launch of our climate change policy and becoming certified carbon neutral from this financial year.
Finally, before I hand over to Janelle, a Few closing comments regarding current market conditions. Australia's property market has defied many negative predictions 2020 and shown remarkable resilience despite the impacts of COVID. Today, the market appears to be on the rise again. The signs of a strong recovery include a healthy increase in property transactions and house prices, particularly in regional areas. Across most states, Properties are selling faster than they were a year ago and days on market are falling.
This momentum is being fueled by increasing consumer confidence, Record low interest rates and healthy bank liquidity with the RBA announcing this week even further increases in market liquidity. In January, residential listings in Melbourne increased 12%, while Sydney declined 1% within an overall flat result We continue to see record numbers of people turning to realestate.com.au. A staggering 128 point 5,000,000 visits were received in January. This is a new audience record in what is normally a quiet month for property. This was coupled with strong buyer demand.
Property views for buyer listings increased 45% and buyer inquiries were up 66% year on year in January. While there's still some uncertainty over the outlook for the economy, particularly as government stimulus measures are wound Most key indicators are pointing to the property market continuing its rebound in 2021. I'll now hand over to Janelle to talk through our results in more detail.
Thanks, Owen, and good morning, everyone. REA has delivered a strong result despite volatile market conditions. Revenue from core operations declined 2% to $430,400,000 This reflects a return to growth in the Australian Residential business more than offset by declines in other segments. Total core operating expenses reduced by 13% for the half with all cost categories down. EBITDA from core operations including associates increased by 9% to $290,200,000 with lower revenue more than offset by the lower cost base.
Pleasingly, core EBITDA margin increased to 67%, although the margin in the second half is likely to be lower as we increase investment. Impact from core operations increased by 13% to $172,100,000 The NPAT results from core This is to the reported impact as a number of one off items have been excluded. These are set out in the table at the bottom of the slide. We'll now turn to trends in the Australian market. On this slide, we've set out the changes in residential listing volumes by month And quarterly dwelling commencements along with the Biz Oxford forecast FY 2023.
As you can see, the residential property market Showed continued signs of recovery during the half, with national residential listings increasing 4% and Sydney listings up 19%. COVID-nineteen lockdown restrictions in Melbourne caused significant weakness in the Q1 with listings declining 44%. However, following the removal of these The market grew strongly, particularly in December, which is usually a low listings month. Overall, 2nd quarter listings increased by 25% with the half down 11%. Moving to developer.
This market saw year on year growth for the first time in several years with new project commencements up 8% for the half. This growth has been assisted by government stimulus, largely benefiting smaller lower yielding projects. On the next slide, we've set out the key components of the EBITDA movement. Australian Residential DEPS revenue was a key positive revenue With revenue up 4% due to an increase in buy listings, stronger Premier penetration and continued growth in add on products. This was partially offset by the impact of COVID-nineteen support measures and the effect of the prolonged market Melbourne lockdown on yield.
Rental revenue, which is included in the Australia residential depth category benefited from increased depth penetration and product mix. However, this was partially offset by a decline in rental listings, which continued to be negatively impacted by lack of migration and restrictions on tenant evictions. Pleasingly, December rental listings trended positively for the first time in FY 2021. The Australia residential depth revenue also Login translation. And whilst there was no overall impact to group revenues, the Australian residential revenue includes a one off increase with a corresponding decrease in the Asian segment.
As you can see in the chart, the growth in residential revenue was offset by declines in all other operating businesses. Commercial and developer revenue declined 7% with commercial revenues negatively impacted by 26% decline in listings, partially offset by improved depth penetration. As mentioned earlier, developers benefited from an increase in project commencement with a larger proportion of these being smaller project launches, which had a negative impact on average yield. Financial Services operating revenue increased to the valuation of expected future trial commission, which reduced due to faster loan runoff rates in the current low interest rate environment. In addition, there was also a reduction in partnership revenue as the current NAV performance payments have reached maturity.
Pleasingly, the EBITDA contribution from associates was positive during the half, driven largely by the improved performance of Move, which I will cover in more detail later. As you can see, the first half EBITDA was positively impacted by the continued focus on costs, with operating expenses declining by 13% for the half with reductions across all cost categories. As we provide each reporting period, The following slide shows both the penetration and mix of depth listings in the residential business and the success of our premium listings products. There's no scale on this graph, but the relativities between the categories are to scale. Despite the headwinds the residential business faced this year With Melbourne listings down 44% in Q1, total debt penetration has held largely steady.
During the half, We saw continued growth in Premier and total depth penetration in New South Wales and Queensland, which has largely been offset by the COVID-nineteen impact in Vic in Q1. Pleasingly in Q2 penetration growth returned. Moving to our international businesses. The Asian segment comprises businesses in Malaysia, Hong Kong and Thailand and our Chinese listing site myfund.com. Revenue for the half was $17,000,000 As Owen mentioned previously, this result was negatively impacted by a number of factors, including renewed COVID related lockdowns, cancellation of physical events across all markets, adverse FX movements and the one off COVID related reduction in syndicated My Fund Listings.
The prior period comparatives also include Asia EBITDA before associates and joint ventures was $1,700,000 with revenue declines partially offset by continued cost management across region. Moving to our investment and associates. As Owen mentioned, 99 Group acquired SRX during the period, which completed in December and will strengthen the group's competitive position moving forward in Singapore. The standout associate for the half was our investment in the U. S.
Move's equity accounted results positively contributed to the group, improving from a $1,500,000 loss in the prior year to a $9,400,000 profit in the first half FY twenty twenty one. Reported revenue growth of 20% to US293 million was due primarily to increased lead referral revenue on the back of strong audience and higher average home values in the half. In Alara Technologies. Our share is 59.65 percent as of today, with News Corp. Holding 39% of the remaining minority interest in Alara.
The total consideration paid to date for the Alara transaction is $105,700,000 comprising $49,100,000 of and the issue of 402,518 new REA shares with a consideration value of 56,600,000 The group has consolidated Allara's balance sheet as at 31 December 2020. The group's half year result includes an equity accounted loss of $2,400,000 from Allara. The Indian market was impacted by COVID during the half with revenue declining 17%. Management responded by reducing operating by 24%. Alara earnings will be consolidated from the 1st January 2021 and the Expected impact on revenue and EBITDA in the second half is detailed in the ASX announcement.
Overall, the EPS impact is expected to be marginally dilutive for FY On the next slide are our operating jaws, which remained open for the half year. Core operating costs declined 13% during the half due to a combination of ongoing cost management initiatives, COVID-nineteen related savings and the deferral to marketing spend into the second half. We expect second half cost growth will increase as we return to a more normal operating environment and we'll see We've continued to invest for the future with CapEx as a percentage of revenue broadly consistent with prior years. This represents the FY 2021 is on continuing to improve consumer experience, new product delivery and supporting technology with our investment spend linked to our product The bottom of the slide shows a summary of the group's D and A, including a forecast for the second half. We've also included a preliminary range of amortization in relation to the acquired intangible assets from the Alara acquisition.
Turning to our cash We delivered a strong operating cash flow of $125,000,000 for the half year, which is the addition of the first four bars on this graph. Our operating cash flow was negatively impacted by higher income tax payments following the temporary deferral of FY 2020 Installments as a result of COVID FY 2019. All deferred tax payments have now been paid. Strong operating cash flows enable continued capital investment and innovation, acquisitions including Alara and our smaller equity investments, plus Shareholder returns in the form of dividends. Our closing cash position was $180,000,000 at 31 December, with a strong liquidity position supported by an additional $149,000,000 loan facility and $20,000,000 overdraft ability.
This remains undrawn. Drawn facilities fall due in April 21 at for $70,000,000 and December 21 for $170,000,000 Finally, on current trading. In January, national residential listings were flat with Melbourne up 12% and Sydney down 1%. As discussed earlier, developer revenues are expected to be supported by growth in new developments in FY 2021 with Biz Oxford upgrading their FY 2021 forecast for new project commencements from minus 5% to plus 7%. However, the higher proportion of smaller projects are likely to impact average yield.
Commercial revenues are expected to remain challenged with listings pressure anticipated Asia revenues are likely to be negatively impacted for the remainder of FY 2021 given severe COVID-nineteen restrictions likely to be in place in Malaysia for the coming months. Based on the current market outlook and excluding the impact of acquisitions, The group anticipates core operating costs for FY 2021 to be broadly in line with FY 2020 and operating jaws to remain positive. 2nd half operating cost growth will increase as the benefits of COVID-nineteen related savings such as travel and entertainment reduce alongside increases in marketing, staff incentives and product development. I will stop here. Operator, if we can please now open the line for questions.
Thank Your first question comes from Eric Choi from UBS. Please go ahead.
Good morning, guys. Great results as always, so congrats. Just a few for me. First one, just on the cost base. I think we're guiding to 180 ish in the second half.
So I just wanted to get a sense of how much of that is, say, a temporary shift in marketing spend. Ultimately, I'm just trying to figure out If that's a reasonable cost level to assume that you guys go into FY 2022 with, obviously, ex all the temporary Marketing stuff. Then just a second question on Slide 19, just the penetration Can we just confirm Premier penetration was up sequentially in each state and just the average was down obviously because Melbourne was a smaller part of the mix. Maybe if you could confirm that RevPAR is up in second half 'twenty one so far, that would be great, Given all the Melbourne listings have come back on. And then just thirdly, just on revenue deferrals.
I guess originally we were thinking there might only be a couple of $1,000,000 of drag in the second quarter, but just with that fatter tail of listings, Just wanted to check on the materiality of those deferrals. Thanks.
Okay. So I'll take all of those, Eric. So on the cost base, You're right as we're guiding to expecting the cost to be effectively flat year on year. There are Obviously, some additional costs that are coming back in, in the second half that really relate to things like staff incentives, they relate to pay rises We've given our staff. Look, we didn't do a pay rise in the first half.
We think it's really important that we make sure our staff are incentivized to deliver the exciting roadmap we've got The second half, there is a combination of permanent savings that we've seen come through in the first half that will continue into the second half. Things like We're getting greater efficiency out of our marketing spend, notwithstanding that we will be increasing our marketing spend in the second half, partly consumer marketing, but also Customer marketing as well and we do expect to have events come back in the second half. So look at the moment we're comfortable with what we're guiding to around the costs. Obviously, what we've shown over the past couple of years is we can flex the cost base as we need to depending on market conditions. But overall, we're Quite optimistic about the market conditions we're seeing coming into the second half.
In relation to penetration, obviously, we don't give Guidance around penetration for each state, but we did see penetration effectively improving effectively flat year on year, but up Particularly in Q2. And then your question in relation to deferrals, we did see obviously the benefit of deferral coming through in Q1. That has been negative negative in Q2 because of that stronger December performance. So overall, deferral is effectively negligible for the half.
Awesome. Thanks, Janelle.
Thank you. Your next Question comes from Lucy Huang from Bank of America. Please go ahead.
Good morning, Owen. Good morning, Janelle. Thanks for taking questions. So I have 3. So firstly, in terms of listing volume, so January was relatively a softer month.
Just wondering what you're hearing on the ground as We move into February, are we expecting to see kind of a further uplift in listing volume growth at this point? Or do you think They will remain, in terms of a growth perspective, quite flattish in February as well. Secondly, just In relation to Agent Match, I think last time we spoke, you had mentioned that you may be announcing a monetization plan. So just wondering whether that's been finalized Yes, and communicated to agents and whether we can get some color around how you're thinking about monetizing that product. And then just My third question, do you get a sense around any share shifts between yourself and domain over the last
In terms of listing volumes, while January is flat, January is traditionally a very low listings month. And I think we've seen a bit of Recovery overhang in Melbourne, as we're still coming out of sort of that COVID lockdown measure. Anecdotally, Agents are pretty bullish, I've got to say, about the outlook for the market. It's true we are as you can see from our buyer inquiry numbers, we're in a Market where there is a huge demand for property and in fact I think if you had to characterize it I think the buyers are outnumbering the sellers at the moment. But I think that will join the sellers to the market for sure.
It's also worth remembering on a PCP basis that in Q3, we're going to cycle through Relatively healthy listing numbers. If you recall in Q3 last year, they finally ticked positive by the Royal Commission. And then of course COVID hit. But overall Q3 last year was pretty good. So we're going to cycle against those for this quarter.
Then of course, when we get to Q4, we're cycling against some pretty dramatically low numbers that were heavily impacted by Countrywide lockdowns in April May. So you're going to get some fairly wild swings in terms of percentage growth over the course of this half. But overall, The anecdotal evidence speaking to customers is they're very bullish. In terms of agent match monetization, Yes, we outlined our plan to deliver what we think will be a market leading win listing suite of products to our customers. We're rolling that out to the customers Later this year and that will encompass entire offering around how they win listings using our suite of products.
We obviously can't talk about the monetization that to expect for the customers, but that will be coming later in the coming months. And then, Shift, this is a hard one. It's hard to measure What's happening with our competitor in each of the markets? We can only go by anecdotal feedback. It's true that We do hear stories of if consumers are pushing back on the size of their marketing schedule that The logic of buying the best product on the best site still holds and then the pressure comes on the other items on the schedule and that tends to see some The other items moved downwards in terms of spend.
Yes, the one thing we can measure is audience. We know that our audience lead has extended. Now In November, we had 13,000,000 people and 6,000,000 people more than the nearest competitor. So that speaks for itself and our customers see that. They see that both in Obviously, the audience numbers, but they see the leads that they get from our side compared to our competitors.
So where there is pressure, we'd like to think we're going to hold up.
Wonderful. Thanks, guys.
Thank you. Your next question comes from Anthony Matthew Porto from Morgans Financial Limited. Please go ahead.
Hi, guys. How are you doing? Well done on another good performance there. We haven't heard much with regards to pricing. I assume that we're still looking at that Above average pricing increase in July there.
Just I know you spent a lot of time around kind of the audience measurements and product initiatives you've got And I guess these are the key pillars to driving the ability to continually drive high single digit cost increases into the future. But I mean, how do you safeguard to an extent against the kind of boycott ride move development happening domestically? And Do you think your ability to continue to go kind of high single digit price increases continues into the future? And then I guess second kind of overall strategically, you've seen in the U. S.
Zillow kind of 1.2 to Zillow 2 point Now I know that we're talking very different markets here. But just internationally around the world, you're seeing a lot of these Classified sites moving to a more transactional structure from the classifieds. And I guess that's the next incarnation of classified So just where you guys are placed on that kind of road map there? And how do you do that without disenfranchising agents? And I guess just lastly on the Financial Services.
A pretty weak result, I guess, flies in the face of A relatively buoyant refi market. I know you mentioned that coming off of the NAB performance and issues, but just the outlook here. And are you losing share in this space? That'd be it for me.
Thanks, Anthony. Look, in terms of pricing, we've always seen Around our price increase in July, we'll absolutely underpin that and the value will be there. In terms of going forward, we also have a roadmap of value that We believe we're going to deliver in the coming years, a very strong strategy that underpins that value. And so we're confident that that value exchange will hold up. We're delivering significantly more views of properties and significantly more leads to our customers and to their vendors.
And so we feel the value is absolutely there. And in terms of some of the other product developments we're doing around brands and around new listings, again, that is limited with a significant value. Changing the time it takes to process a retail application from 90 minutes down to 5 minutes is significant value we're going to deliver to our customers. So we're very confident on that. In terms of moving closer to the transaction and the Zillow Ibuyer model, that's not on our roadmap.
And in fact, in the U. S, We've got a deliberate opposite approach. If you go with Zillow in the U. S, you get one flavor. You get one price And I buying and that's the Zillow price.
They've only got one loan, which is their own loan. We've gone the other way. We're giving consumers choice So you can look at multiple of our buyer prices on our site or you can speak to an agent and get a proper valuation. And so we believe that monetization of leads to our customers in the U. S, That model is going to create, I think, a very distinctive difference to consumers.
We want to give consumers Choice. And quite frankly, Zillow doesn't. And I think you're seeing that in the audience numbers. On the News Corp call, they quoted that we've out Sure. There's a lot of audience growth, so something like 19 months in a row.
And so I think consumers are voting with their feet on that one. In terms of so I actually disagree with I think 12% growth in operating revenue shows that we are doing incredibly well. There are some Negatives in there around the revaluation of the back book, but that reflects the changes in the market and that's now factored into the numbers. And the run off of the net contract was always part of that contract in terms of performance payments. So in terms of the core performance and what we can control, I
I guess I wasn't sorry, with regards to the Xero question, I wasn't really talking about you guys buying Going that far, but more getting involved in more of the transactional pie, whether it's potentially taking deposits, etcetera?
No. I mean, taking deposits, that's quite a complicated thing to be doing, look at our customers here.
Yes. No problem.
Thank you. Your next question comes from Kane Hannan from Goldman Sachs. Please go ahead.
Good morning, guys. Just 3 for me as well. So obviously, it sounds like a big focus on helping agents Wind listings, the Realtek campaign agent investments, property dashboard and then the agent match product we've spoken about in the past. Is it right to think that this is All going to be bundled together in 1 big bang offering that you're going to launch later this year with Agent Match? Or is it more of a suite of products?
And just any sort of comments you can say around how we think about the revenue profile of that strategy? Secondly, just around the next round of
contracts in July. Given the catch
up price rise, the In July, given the catch up price rise, the pretty healthy market recovery we're hoping for this year, just interested how you're thinking about contract lengths And phasing of the price rises and whether that's I know you might not be able to comment. And then finally, just commercial and developer trends, It's just a sense of how that 7% revenue decline in the half was phased across the Q1 and the Q2. Cheers, guys.
Thanks, Kane. I'll take the first two and Janelle will take the third one. So In terms of win listings, we have got a very firm go to market strategy for that rolling out in the coming Our customers and therefore I'm not going to talk to that for obvious reasons. It's obviously competitively and commercially sensitive. We're very confident that we've got a compelling proposition for our customers that will deliver significant value to them.
And therefore, we're really excited about the rollout. What I will say about that is, it will follow and I've had this conversation with many of you before, it will follow any product rollout that we have and it will take a while You saw that with depth when we first started depth. You saw it with Premier when we introduced Premier. You've With Ordamax oil, that's taken years to get to the levels it is today. And this suite of products will be no different.
It will take time and We anticipate a slow burn, but as with many of our products, as more and more customers get on to And competitors can see the benefit and the others follow very, very quickly, the early adopters. In terms of July price, Again, given we did have a particularly price holiday this year because of COVID, we're very confident in our ability to put the Price changes through in July and again we got that value exchange. What I will say is that We don't just take a 1 year bid on price. So we're constantly looking through the numbers for this year and into the following years. And we've got a we do have a multiyear strategy on this.
And clearly, obviously, I can't articulate and single app for commercial residents.
And Kane to your question around commercial, so as you can see as we shared in the ASX, the commercial listings Q1 was down Q7 and Q2 down 24. So overall, pretty weak in both quarters. The Q1 was worse. We had the COVID support office we bought The commercial market in the Q1. In the Q2, they started to come off.
Pleasingly, we've seen debt penetration in commercial to increase Over the half, so it's improved in the Q2. But overall, if we were to I would definitely say the Q1 was worse than the From a revenue perspective.
Thanks guys. And worse double digit worse or any just trying to get a steer?
We don't we wouldn't go into that level of detail.
Cheers,
guys. Thank you. Your next question comes from Craig Wong Pan from CLSA. Please go ahead.
Good morning. Owen, the First question just for you. In response to another question, you said that you were hearing agents were getting some more pushback on marketing schedules. I was just wondering if That was any more than normal? And if so, what was being caused by?
Was it related to COVID? Second question for Janelle. Just on I was wondering if you could possibly quantify the impact that My Fund Listings had on the Australian revenues. And then lastly, just on Alara, now that you've got operational control, I was wondering is there anything that might be changed with how that business is run over there that you might want to do to that business? Thanks.
Thanks, Craig. The pushback I was talking about is anecdotal and Sporadic. It's true we did see probably a downward pressure on market schedules in the depths of COVID as Consumers were worried about putting their property on the market and whether there'd be buyers there and there or whether they would invest in a process It might not have an outcome. It's fair to say post the listing of restrictions that's completely gone away. And as I said, there's no So the systemic downward pressure on marketing schedules.
In fact, it's a in this market, we're seeing the I think the opposite.
Around MiFID, yes, thanks, Owen. Around MiFID, look, it's a small number in the context of our Australian residential revenue, but Bigger number in the context of the Asian result. We're not planning to quantify it.
And then just on Allara?
Can you repeat your question on that one,
I was just wondering, now that you've got operational control of Alara, I was wondering whether you would be changing anything, like whether that how things are run there or just Any other changes that might be brought to that business?
None other than the you would expect with A business like that coming into REA, they will now have access to kind of what I'll call our IP and our Our methodologies, our SEO techniques, our go to market, our search, full kind of access to our tech. And similarly, the other way, This is a great business with a really talented team. And I've got to say their tech shops are outstanding. Their speed of bringing new tech to market is quite breathtaking actually. And there's a lot in there that we can take particularly into our Asian business, but also in Australia.
There are things that they do in the Indian business We don't do here. And there's obviously, as I said, a lot of things that and a lot of value we believe we can take to that business. So there are great, I think revenue synergies and market synergies from bringing the 2 businesses together. In terms of day to day operations, they've got a great team with a great leader. I think that's going to be a dramatic impact All changes there.
Okay. Thank you.
Thank you. Your next question comes from Encho Rakowski from Credit Suisse. Please go ahead.
Hi, Janelle. I've got a couple.
The first one is on the cost guidance, and I appreciate you've given us quite a bit of color already. But I'm just interested in the rationale behind the change, Given you had been previously guiding to a decline, is it specifically better revenue trends you've spoken about The environment improving or is it anything to do with competition? Any sort of color on that would be useful. And then secondly, December was obviously a strong month for listings. So should we expect a level of revenue deferral from Q2 Into Q3.
Again, if you can't specifically quantify it, any sort of color would be useful. Thank you.
I might take the cost one, Insoo. Look, our previous guidance was flat and now we've said roundabout Similar. And then the reason there is we're giving ourselves a bit of flexibility that the market is definitely rebounding from We do know that we have some cost baked in and coming into our numbers. As Janelle spoke about, We deferred our salary increase at 1 July, but we've decided to put that through on 1 December. So that's coming through in this We know we want to spend more on marketing.
We know we want to spend more on product development, but the guidance is roughly similar. We've said flat previously. We're now I'm saying about the same. Now that could be slightly up or slightly down. And we've got great flexibility around our costs that we've proven in the So we'll adjust that as we move through the half and get more confidence about that rebound continuing.
I'll let Janelle take the
Yes. Thanks, In relation to deferral, you're right. The fact that we had a stronger December this year versus last year does mean that there will be additional deferral going in Q3. So we would expect to see a benefit coming through into Q3. It's always hard with deferral because it also depends on what happens as we close out Q3.
So we will see a benefit coming
Okay, great. I was under the impression
you've been guiding to lower cost, but maybe it was more semantics rather than anything else. So it doesn't sound like there's been a Fundamental shift in the way you've been thinking about costs for the full year?
No, not at all.
Okay, great. Thank you.
Thank you. Your next question comes from Paul Mason from E&P. Please go ahead.
Hi, guys. Just 2 from me. The first one, just on the Australian Subscription revenues, it's declined a little bit. It's obviously not material to your overall top line. But is that due to Initiatives from your side or is that a customer demand?
Let's think that that's gone down. And then second question is Moving to buy now, pay later. Obviously, you guys were running a pay on sale product through the depths of the pandemic, Which I believe has disappeared now. What's driving you to sort of pursue vendor funding Of advertising instead of, say, just sticking with that like what appeared to be sort of high yielding product. I think you guys were charging like a 20% premium.
And so that sort of looked like it maybe had prospects of driving your yield growth up quite materially over time if you'd stuck with it. Those are the 2 for me. Thanks.
So let me just take the one on subscriptions. Fundamentally, the reason why the subscriptions is lower this half versus last half is that we've Provided an extension to our COVID related in relation to COVID, subscription discounts, particularly in Melbourne across Commercial and developer and that went through to October. That's why it's lower.
And in terms of I'm Hanshir with Campaign Agent. This is about giving consumers absolute maximum flexibility. Campaign Agent has got a product where you can pay instantaneously for your marketing schedule Or you can opt to pay it later through their financing product. Our view is that making Taking away the pain of payment and then putting in the flexibility in the hands of the consumer and our customers on this will Help marketing schedules and it may enable larger marketing schedules. So we think that's a great thing.
Look, in terms of pods, we brought that in response to Some of the uncertainties during the depths of COVID, we learned a lot about that product. It's not in market at the moment, but it doesn't mean it won't be at
You now have Follow-up question from Craig Wong Pan from CLSA. Please go ahead.
Thanks. Just one question So from me, on the developer side, we saw the project launches increase in Q1 and Q2, and you mentioned there was some government stimulus. Just wondering if you know when that stimulus might roll off and so when that might affect that activity?
Yes. A lot of the government stimulus is state based. So each of the states have got different measures whether that's stamp duty relief, whether that's incentives, first time buyers, etcetera. I think on the whole, most of them will be kind of, I think, out of the market by about the middle of this year.
Okay. Thank
And you can see that in the bizox forecast. It now got a positive forecast for this financial year and a negative one for the following year.
Okay, great.
Thank you. There are no further questions at this time. I'll now hand back to Mr. Wilson for closing remarks.
Firstly, thanks everyone for joining us today. In closing, we are extremely pleased The momentum we're seeing in the property market coupled with our exciting product roadmap leaves us feeling Really confident and well positioned for 2021. We look forward to seeing some of you in the coming days and hopefully even in 3 dimensions. Thanks again and Bye for now.
Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.