Domain’s share price sinks as new house listings drop 22% in November

Real estate player Domain (ASX:DHG) is among the biggest losers on this red Tuesday as the company flags a startling statistic: new house listings were down -22% in November. 

In October, that number was -16%, reflecting a growing rate of sales decline in the Australian property market. The slowdown in listings comes as the Reserve Bank of Australia (RBA) has hiked rates aggressively in order to combat inflation. 

Domain described the market as “challenging.” 

Sydney and Melbourne particularly weak 

Domain flagged Inner city Sydney and Melbourne as particularly weak. 

In those two areas, listings in November were down -38% and -32% respectively; far larger than the overall trend. 

Further, DHG adds agents and vendors are simply pushing listings into 2023. December month-to-date listings are down -51% in Sydney, and down -37% in Melbourne. 

$48m guidance 

All in all, between June and December, Domain expects to make about $48m, significantly down year-on-year. 

In H1 FY22, Domain's earnings sat at $61m; 14.2% up from $53.4m in H1 FY21. H1 FY19 earnings sat at $52.7m

The company expects a “material improvement” between January and June 2023, anticipating higher revenue and “an additional $15-$20m cost benefit.” 

The company noted growth at Domain Home Loans and strong ongoing business-to-business subscriptions were seeing revenues continue, as well as “recently signed new residential depth and upgrade contracts.” 

Ultimately, however, Domain notes that it is downgrading its margins by a “low single digit percentage.” 

Domain's three month charts make clear the impact of today's news