PHOTO: Domain Group

There is no doubt that FY19 was very challenging for online property classifieds site Domain Holdings Australia Ltd (ASX: DHG). During that time residential property listings declined in our capital cities, especially in Sydney and Melbourne, due to the downturn in the housing market.

Domain’s FY19 financial results were disappointing, with adjusted revenue of $302.3 million down by 6.1%, and adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of $96.6 million down by 14.7%. However, there have been positive signs since then, with the Domain share price increasing by 40% since last August, and the housing market now picking up strongly.

New strategy initiatives

As Domain is now part-owned by the merged Fairfax Group/Nine Entertainment Co Holdings Ltd (ASX: NEC), the entity has begun to leverage its broadcast and digital assets to direct traffic towards its website and other services. Rival REA Group Limited (ASX: REA) has been following a similar strategy for years, as it is majority owned by News Corp (ASX: NWS).

Also, Domain is branching out into digital display advertising and enterprise-facing property data services for real estate agents.

How do property classifieds compare?

When looking at the online property classifieds market, I think it is very useful to view it in relation to the other 2 key segments of Australia’s online classifieds market – employment and automotive – to gain a wider market perspective.

In both markets, one player dominates the market, and has an overwhelming market share of revenues and listings.