REA Group Ltd (ASX: REA) shares have been a major beneficiary of the Australian property market over the past few years.
Yesterday, the Australian Financial Review reported that several Australian capital cities had booked higher clearance rates after a period of lower activity.
Nationally, 70% of homes that were auctioned last week sold, after the rate fell to 60% over the King's Birthday long weekend, according to Cotality research.
Melbourne reported its seventh week in a row in which its preliminary clearance rate held above 70% (reaching 72.2%). In Sydney, the clearance rate hit 70.5% last week, marking the first time it had been above 70% in three weeks. Meanwhile, clearance rates in Brisbane and Adelaide lagged, following a period of strong price appreciation.
Tim Lawless, research director at Cotality, told the Australian Financial Review he believes the auction market is likely to hold reasonably strong over the next couple of weeks.
Vendors are probably feeling a little bit more maybe invigorated or empowered, on the back of listing numbers have come down a little bit. Selling conditions seem to be OK.
It might be a relatively active winter selling season, and if I'm right in that, then you have to think that spring will probably be quite a busy one as well.
Will this benefit REA Group?
REA Group is one of the three online classifieds businesses listed on the ASX, along with Seek Ltd (ASX: SEK) and Car Group Ltd (ASX: CAR).
It operates Australia's leading real estate classified portal, realestate.com.au. Those looking to rent or buy a house will likely come across this portal.
In fact, it attracts more than 12 million unique visitors to its platform every month, demonstrating its popularity.
Over time, Domain Holdings Australia Ltd (ASX: DHG), its closest competitor, has ceded market share to REA Group. In May 2025, Domain had 14.5 million site visits, substantially trailing REA Group's 47.6 million.
Higher clearance rates could be good news for REA Group. Those looking to sell their homes may see this as a good time to do so and decide to list their property.
Should I buy REA Group today?
REA Group is one of the highest-quality businesses on the ASX. Over the past decade, it has compounded its earnings at 15% per annum while remaining debt-free.
Over the past 5 years, REA Group shares have been standout performers, rising 113%.
However, for the year to date, REA Group shares have declined 0.16%, trailing the S&P/ASX 200 Index (ASX: XJO), which is up 4.47%.
This could present an opportunity for ASX investors to buy this high-quality business at a lower share price. Although it's worth noting that REA Group Shares are still trading at a price-to-earnings ratio of 83, which is far from cheap from a valuation perspective.
