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'Asia makes a lot of sense': REA boss keen to take on Singapore rival

WAtoday logo WAtoday 9/10/2019 Jennifer Duke
a man wearing a suit and tie smiling and looking at the camera: REA Group chief executive Owen Wilson. © Supplied REA Group chief executive Owen Wilson.

REA Group chief executive Owen Wilson is looking to expand outside of Australia and is preparing to challenge dominant Singaporean listings company PropertyGuru as the rival pushes on with an initial public offering that could raise up to $380 million.

The News Corp-backed property listings group and owner of realestate.com.au entered into a joint-venture agreement with Singapore and Indonesian company 99.co on Tuesday in a bid to grow its Asian footprint as the Sydney and Melbourne housing markets recover from a lengthy downturn.

Nine Entertainment Co, the owner of this masthead, is the major shareholder of Australia's second-largest property listings business Domain Group.

Mr Wilson said the deal was unlikely to be REA's last in Asia, which he views as the global region with some of the best future business prospects.

"We've had a diversification strategy for a long time," Mr Wilson said. "We've been in Asia for a number of years now and while it's true that most of our growth has still been coming from Australia - and probably will be for years to come - if you look a long way out having businesses in these high growth markets like Asia makes a lot of sense."

He said there was an appetite in Singapore for an "alternative" to the market leader PropertyGuru.

"The fact that [PropertyGuru is] IPO-ing and they are heavily weighted to Singapore at the moment ... clearly they are spruiking the Singapore story," he said, adding it was a volatile market where the government interfered in housing policy.

"Nonetheless, we see it as very attractive. It's ripe for disruption. They do have a very large share there and that's [what] we think we can come after," he said.

The property market in Australia has been through a quieter period in the major Melbourne and Sydney markets, resulting in a significant drop in the numbers of listings for sale online but there has been a recent surge in people looking to buy.

"The increase in buyer activity on our site is there. You're seeing it in the really high auction clearance rates albeit off low numbers of auctions," Mr Wilson said.

The Reserve Bank of Australia cut interest rates to a record low 0.75 per cent last week, which Mr Wilson said reduced mortgage stress and allowed prospective sellers to stay put for longer.

"I think that's giving people comfort that they can sit on their hands at the moment. [The market] will come back, it's inevitable ... it's just taking its time at the moment," he said.

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