Tough property market hits McGrath result
Listed real estate agency McGrath has flagged that its full-year result will be "in at least a breakeven position" on an EBITDA basis after tough conditions in the property market dragged it to a $1.9 million loss for the September quarter.
McGrath said auction clearance rates and the number of properties taken to auction were well below the previous year. An increase in stock levels combined with lower buyer activity meant houses were taking longer to sell and prices were down across the sector.
In the 12 months to September 30, the number of settled sales in the broader Sydney, Melbourne and Brisbane markets were down 18.5 per cent, 15.8 per cent and 11 per cent respectively.
However, it said its franchise network in NSW and Queensland and its Sydney and Brisbane company-owned offices outperformed the market in terms of new listings.
It flagged a materially smaller loss in the December quarter and said it expected the second half of fiscal 2019 to be stronger than the first.
"Over the financial year to date, we have seen a noticeable slowdown in the market, with a correction of residential property values experienced across the entire real estate sector," chief executive Geoff Lucas said in a statement.
"In addition, the tightened lending environment is impacting current transaction volumes, however, we believe this will ultimately strengthen the stability of our property market."
McGrath in August reported a $63 million net loss for the 2018 year and EBITDA of $1 million but said its most difficult days were behind it.
More to come
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