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Thank you for standing by, and welcome to the REA Group Limited Third Quarter Financial Results Conference Call. [Operator Instructions] As a reminder, today's program is being recorded.And now I'd like to introduce your host for today's program, Alice Bennett, Head of Investor Relations. Please go ahead.
Thank you. Good morning, and welcome, everyone. My name is Alec Bennett, Head of Investor Relations, and I'd like to thank you for joining us to discuss REA Group's results for the third quarter ended 31st of March 2023.Before we commence, I'd like to acknowledge the traditional owners of country throughout Australia and recognize the continuing connection to land, waters and communities. We pay our respect to Aboriginal and Torres Strait Islander also and to Elders past and present.This morning, you'll first hear from our CEO, Owen Wilson, who will provide a brief business update; and then, Janelle Hopkins, REA's CFO, will talk to the financial highlights for the quarter. Following this, we'll be happy to take your questions.Just as a reminder, our quarterly numbers are top line results only, so restricted by the amount of detail we can provide.With that, I'll pass over to Owen for a [ general discussion ].
Thanks, Alice. I'd like to welcome everyone this morning and also acknowledge the traditional owners of country throughout Australia and pay my respects to Elders past and present.REA's performance for the third quarter reflects the subdued market conditions following 10 consecutive rate rises and lower listing levels compared to the very strong listing environment in Q3 last year. The strength of our premium product offering and the scale and engagement of our audience offset much of the impact of the listings decline. Our Indian business achieved exceptional growth, delivering the strongest quarter to-date in both revenue and audience.Looking at our results from core operations for the quarter, revenue was $269 million, a decrease of 3%. EBITDA, excluding results from our associates, was $136 million, a decrease of 13%. While interest rate uncertainty continued to impact the market, we did see some improvement in conditions during the quarter. Cash prices stabilized and growing demand resulted in more vendors coming to market than the previous quarter.REA's objectives and strategy remain consistent and clear. We have a compelling purpose to change the way the world experiences property, and we're building next-generation marketplaces for our customers and consumers. We continue to invest in the future growth of our business, and I'd now like to take you through the highlights of the quarter.The millions of people, who engage with realestate.com.au each month are the key to the value we deliver to our customers. Our site remains Australia's #1 addressing property in every market across the country, and it's clear from the activity on our side that demand for property remains strong. 11.9 million people visited realestate.com.au each month on average during the quarter. In March, we achieved 132 million visits to our platform, the highest number of monthly visits since 2021. 2.7 million people visit our platform on average each day. That's 3.5x more than our nearest competitor. And in a sign of the underlying market health, in March, we delivered the highest number of buyer inquiries since May last year.Moving to our consumer highlights for the quarter. In February, we launched realEstimate to further drive engagement with the valuations experience on realestate.com.au, powered by PropTrack's AVM. This feature accelerated our property owner tracks and membership growth during the quarter, with property owner tracks up 62% year-on-year, while active members increased 16%.In a major app navigation update, we launched the my Property tab in early March. This new feature provides a more seamless navigation to our property owner dashboard and drives consumers to our realEstimate feature. Unique visitors to the dashboard in March were up 47% compared to the same month last year.Australia's rental market remains incredibly tough, and our aim is to make renting simpler and more efficient. Our renter profile helps tenants put their best foot forward, while also simplifying the process for property managers. We saw a 164% year-on-year increase in the number of rental profiles during the quarter. The tough rental market also resulted in more people turning to shared accommodation with new members on our Flatmates platform increasing 68% year-on-year. While Flatmates is small, it was our best-performing Australian business this quarter.Moving to our customer highlights. As we continue to evolve our core advertising solutions, total Premiere penetration, which includes Premiere Plus, achieved solid growth nationally in Q3. We automated key product features during the quarter with the release of the schedulers feature in Ignite, which enables customers to schedule a listings bump and an e-brochure to boost the performance of their listing.We also introduced a recently [ sold carousel ] into the [ buyer ] section, helping consumers understand current market conditions and enabling agents to showcase their recent sales. In Agency Services, we're continuing to see strong growth in our customer platform, Ignite. In the third quarter, we reached the milestone of 50,000 users on the Ignite platform, and we also saw a 53% year-on-year increase in monthly active users. The traction gained in our agency marketplace points to a positive sign in the market, driven by the success of our realEstimate campaign, we delivered 23% more seller leads in Q3 compared to Q2.We also extended the marketplace product set to our commercial business with the release of agent profiles for commercial agents. On the back of the value we've delivered to our customers through Premiere Plus and new features such as smart listings and schedulers, we have commenced the roll out of our new prices, which become effective 1 July. This will see the price of our highest penetrated product, Premiere Plus, increased by an average 12% with other products increasing by at least this amount.Our Financial Services business continued to be impacted by market uncertainty and reduced activity. From a brand perspective, our focused investment is delivering results and strong momentum in new broker recruitment continues. Pleasingly, this quarter, Mortgage Choice was awarded Aggregator of the Year at the Mortgage Business Awards. This follows our recognition by the adviser as Brokerage of the Year in Q2. The pilot launch of our white label products with Athena Home Loans has received a very positive early response, and I'm looking forward to sharing more updates on this at our next results announcement.Moving to our global businesses. REA India's exceptional momentum continued during the quarter with 63% revenue growth, driven by the flagship Housing.com business. Housing.com maintained its audience leadership with 21% year-on-year growth in audience for the quarter and achieved 1.3x more visits than the closest competitor. This is lower than our lead in December, reflecting significant short-term marketing investment by the newest competitors, as they approach their year-end. This has not continued into April. PropertyGuru Group announced its full year results in March, delivering a 35% increase in revenue for the 12 months to December 2022. The Group will announce its first quarter results for 2023 on the 24th of May.We continue to progress our environmental, social and governance goals and achieved some key milestones throughout the quarter. Pleasingly, we received confirmation of climate active carbon neutral certification on REA's FY '22 carbon emissions. For the second year running, we achieved a AA MSCI rating in April with our score classifying REA, as an industry leader in the interactive media and services category.Turning to market conditions. The Australian property market has seen property prices stabilized in recent months, as a result of limited supply and strong underlying demand. Demand is being driven by the strength in market fundamentals, including low unemployment, rapidly growing migration and increasing confidence that the interest rate cycle is nearing the peak. It's my view that we have at least one more rate rise to come, but it's relevant that we're starting to see 2- and 3-year fixed mortgage rates begin to fall.Conditions in the developer and new homes market continue to be very challenging, as evidenced by the recent collapse of several well-known developers. Given Australia's current shortage of housing stock and growing demand, these conditions must eventually turn around, but it's unclear to me what the catalyst for turnaround will be.While we expect that listings will remain below the very strong prior period comparables until Q2 of FY '24, there are clear signs of improving sentiment. Sellers are returning to the market, but ironically, low stock levels are keeping some vendors on the sidelines. These are nearly deferred listings. We expect to see further improvement as demand, positive price sentiment and the impending end of the rate cycle, increased confidence to list.We have an exciting pipeline of innovative products and experiences that will increase the value we provide to our customers and consumers. These initiatives, together with our price changes and improved market conditions provide an excellent platform for our continued growth in FY '24.I'll now pass to Janelle to provide more detail on our financial results.
Thanks, Owen, and good morning, everyone. For the quarter, Group revenue declined by 3% to $269 million. Operating expenses from core operations increased 9% to $133 million, and the Group delivered operating EBITDA excluding the results from our associates of $136 million, down 13%. For our Australian operations, revenue decreased by 6% and operating costs increased 3%.Looking to our residential business. Revenue declined during the quarter, driven by lower buy revenue. We benefited from the things we could control, the 6% price rise, contribution from Premiere Plus and increased depth penetration. However, this was more than offset by a 12% decline in national listings with the continued and significant impact from negative geo mix with Melbourne down 18% and Sydney declining by 20%. Rent revenue was up year-on-year with a 5% price rise and increased depth penetration, partly offset by a 1% decline in rental listings in a very supply-constrained environment.Turning to Commercial and Developer, revenues increased modestly in the third quarter. Commercial revenues were driven by the 23% price rise and increased depth listings, while developer revenue saw upside from the September price rise, largely offset by lower project commencements.Media, data and other revenues were down year-on-year. We saw growth in all revenue lines except for Developer Display, which is the biggest contributor to this revenue segment. With developers continuing to face industry-wide cost pressures, some are reducing or delaying their display spend.Financial Services revenue declined in the quarter. We continued to see settlements negatively impacted by fewer new home loans being written across the market and lower average home sizes with rising mortgage rates, reducing borrowing capacity. However, this was partly offset by a growth in refinance activity across the market.Recruitment momentum continued, and we closed Q3, nearly 1,050 brokers, and I'm pleased to say that the integration of Mortgage Choice is now largely complete.Momentum continued for REA India during the quarter with revenue up 63% year-on-year. Housing.com's property advertising business benefited from customer growth, a very successful Happy New Homes online marketing event, and we continue to see strong growth in adjacency revenues on the Housing Edge platform.Turning to operating costs. Australian cost growth increased 3% in the quarter. A continued focus on cost management saw employee-related expenses [ held ] broadly flat year-on-year despite underlying salary inflation. Cost growth was largely driven by technology costs impacted by supply price prices and increased usage and higher marketing spend from the new realEstimate campaign.In India, in line with previous guidance, we continue to invest in both people and marketing to capitalize on positive momentum and cement and grow our audience position. Strong growth in adjacency services on the Housing Edge platform also resulted in growth in revenue-related costs. Overall, Group operating costs increased by 9%. The Group's combined share of associates contributed a $0.5 million loss to core EBITDA in line with the prior period.Moving to current trading conditions. Listings remain subdued in April. National residential new listings were down 24% year-on-year, with Sydney listings decreasing 25% and Melbourne down 22%. And as we have highlighted previously, year-on-year growth rates for the fourth quarter will reflect strong prior period listing volumes.In terms of residential buy yield, we anticipate growth of approximately 10% in FY '23. Yield has and will continue to benefit from the 6% price rise, Premiere Plus uptake and continued growth in depth penetration. However, this has been partly offset by a significant negative geo mix given the impact of weaker listings in our high-yielding Melbourne and Sydney markets. In FY '24, buy yield growth is expected to grow double digit, driven by an average 12% price increase in Premiere Plus, which is now our largest depth product.Core Australian operating expenses are expected to increase low single digits in FY '23. And with continued lower listing volumes, we expect Australian operating jaws to be modestly negative.As previously discussed, planned investment in India will see REA India EBITDA losses widen and peak in FY '23. This is expected to result in total Group operating costs increasing mid-single digits in FY '23, which compares to our previous guidance of a high single-digit growth. The Group continues to expect a mid-teens loss for combined core contributions from associates in FY '23, reflecting tough market conditions for these businesses.On a final note, while rapidly rising interest rates continue to have a short-term impact on the market, we will continue to focus on delivering great value to our customers and consumers, prudently managing our cost base and positioning ourselves strongly for FY '24. I will pause there.Operator, we will now open for questions.
[Operator Instructions] And our first question comes from the line of Eric Choi from Barrenjoey.
I'll rapid fire. First one, just on the yield, and I know it's hard comparing like-for-like your yield versus domain, but I guess they're calling out 10% yield increase, including the benefit of Platinum Edge and Social Boost, whereas your 12%, I think, excludes the penetration benefit of [ Prem Plus Wave 2 ]. So just wondering, when you add that in, do you think your like-for-like yield growth will materially outpace the latency in FY '24?Then the second question is, I think versus previous guidance, we're probably taking out another $10 million of cost roughly in the second half. So I'm just wondering, should we be annualizing that extra cost out into FY '24? Or is that sort of like IT, [ ThoughtWorks ] stuff that you turned back on pretty quickly?And then just the last one, just hearing around the [ traps ] that you guys might be launching a Pro subscription in October with leads packaged and maybe that only comes with a minor increase in the monthly subscription cost. So if that's the case, should we -- I guess we shouldn't be expecting leads to be a material contributor in FY '24?
Hi, Eric, firstly, congratulations on the arrival of your new baby, sort of Friday today, very cute. I'll take questions 1 and 3 and ask Janelle to take question 2. Look, on yield, I hear what domain have been quoting around 10%. The reality for us is that we've said that Premiere Plus will be going up 12% on average across the country with all other products by at least 12%. That, as you said, does exclude the additional uptake of Premiere Plus. It's early days in the roll out of the pricing discussions.We've done the first kind of 2,000 or 3,000 customers. We do all of these face-to-face. It's fair to say the feedback from customers, they recognize the value that we are providing, and there's been very little push back on that price. And so we have seen a number of customers upgrading to Premiere Plus. We won't know the final wash out till end of June. And it's likely that the customers, who wait the longest will be the most hesitant to upgrade. But we're very pleased with the ratio of upgrades and virtually no downgrades.On the Pro sub, that is the way we'll be going to market in the next half with seller leads. It's a separate subscription signing up to -- to getting seller leads and the bundle of offerings that we're putting into that. You're right, though, because we're launching it into the financial year, and like every new product uptake is usually slow. So we're not expecting a material contribution to revenue in FY '24, but we're really excited about the future of this area. We're delivering increasing seller leads to the customers. They're still very, very good leads with high conversion rates. And pleasingly, there's a couple of features in Pro sub, which I just can't talk about for commercial sensitivity, which I think will be exciting to our customers.
And Eric, on cost, let me give you a little bit more color around what we've done on costs for '23 and implications for '24. So as we saw the market downturn coming for '23, so we've done a number of things. One, we've phased some of our investment spend, so prioritized hard what we're spending in the second half of this year and dial that back. Secondly, we've looked at our planned hiring and reduced our planned hiring. And we've also looked at across the board at the cost base and the employees we have and said is there some roles that we could remove and we removed a small number of roles. As you play through that into '24, we will get some of that savings from those permanent roles that we have removed. But some of the costs that are [Technical Difficulty] is more timing in nature, such as the phasing of some of that investment spend, depending on the market, that might come back.I would also say when you look into '24, there is still inflationary impacts across the business. We're still seeing healthy price increases coming through from our technology providers, as well as expectation around salary inflation again next year. So I wouldn't annualize the second half into '24. But as we always do, we will look at what the market is looking like and think about our expenses accordingly. And as we would normally say, we'll continue to target open jaws at the Australian and Group level into '24.
Thank you. One moment for our next question. And our next question comes from the line of Siraj Ahmed from Citigroup.
I'll ask 3 as well. Just -- just question on the guidance for FY '23 in terms of the revenue. I mean, it sort of implies -- the negative jaw sort of implies what 3% to 4% decline for the full year, so it's sort of a deceleration in 4Q. Is that just the listing, if you just give us the underlying drivers of what you've assumed then -- that would be helpful?
Yes. Look, we've said modest negative jaws. And we said at the half, it was going to be line ball either way depending on what happened on listings. So what we have seen so far in Q3 and into Q4 as listings have been softer than we had anticipated, and that will be the reason why we'll be modestly negative. The final outcome of the negative jaws will depend on where listings land in May and June.
But Janelle, just -- does that assume that sort of it's going to be down 20% plus in the quarter? Is that what you're -- what you're assuming or...
We don't know. We don't know yet, Siraj. If you look at the April listings, clearly, that was substantially down. May is tracking similarly to April, and we are cycling over strong comps in June. But we -- until we -- until the year end, we just don't know.
Yes. And the other point, Siraj, is if we get a rebound in listing, say, in June, that revenue largely gets deferred into July and August. So as we -- the closer we get to the end of the year, the less benefit we get from any listings improvement.
Yes. The other reason, I was asking this as well, Owen, in general is because, I mean, I think Mortgage Choice last year had that sort of one-off impact as well. So I thought that would be a benefit for revenue in terms of growth in 4Q. So that's why I was asking that. But I understand the listing. That's helpful. Owen, in terms of yield growth in the next year, I know it's early days, but given you've been in the market for 1.5 months, any indications of where yield could be this -- in early days, like is it 2% to 3% next year because you would have an indicator of the depth upgrades people have done. Anything you can add color in terms of the question -- Eric's question?
Yes. The eventual yield next year will be influenced by a few things. Obviously, the price is the price. And so we know what that is and we know where that kind of averages out across the country. We won't know the full impact of additional Premiere Plus sign-ons until we get to June. And so it's too early to call out. Look, we're pleased with the uptake. And I think it's the ones have taken it up really quickly, are the ones, who couldn't get in over the course of this year, and the minute it opened, they went up regardless of what we did with price because of the value.Our teams are telling us there's almost no push back on the price and they see the value. And so look, it will be a benefit. It's really hard to quantify that impact on yield next year. And then the other thing that is hard to quantify on year next year is we've had a fairly big drag on geo mix this year. We hope that, that drag is just absent next year. I'm not sure it will be a positive, but let's hope, it's not a negative next year.
And lastly, on India, I mean, growth accelerating, which is a positive. Is there any sort of one-offs from -- because of the event that you mentioned? And also, I believe in Housing Edge, you've increased the RentPay revenue to -- the fee to [ 1.6 ], which is a decent increase. Is that in this quarter? Or is that yet to come?
Yes. The event -- the Happy Homes event was spectacularly successful, and it is an event that we only run in that quarter. We do run 2 big events a year, one around Diwali and one around this Happy Homes event. The best way to describe it, it's a bit like a Black Friday event and the developers come on and they discount their stock for a very limited period. Consumers are now well aware of this and they flock to our site, and the developers realize this is a great way to move some stock and so they spend quite a lot with it. So it is a -- I'll call it a one-off because it only happens once in this quarter. You can't really replicate it. And it's possible that our customers have brought forward some expenditure from Q4 into this quarter just to really maximize the benefits they get from that event. So I'd be surprised if our growth continue to [ ride ] into Q4.On the RentPay product, yes, look, we have put up the price on that. That is a reflection of the fact that the fees related to that product went up. So we put the price up to maintain our margin, and that is in the Q3 numbers.
One moment for our next question. And our next question comes from the line of Kane Hannan from Goldman.
Just got 3 as well, please. Just the cost outlook into next year, if we think about even a flat listings environment, given that yield benefit coming through, as you think your jaws will be above that typical 1% to 3% range? Or is there really a catch-up costs coming back into FY '24 that we should be thinking about?
Yes. Kane, we have provided historically expectation around jaws being 1% to 3%. The final operating jaws will depend on what happens with listings. We're clearly getting -- we will get benefit from yield flowing through into next year. From a cost perspective, there is absolutely inflationary impacts flowing through into next year. Salary increases, as I flagged, higher tech costs, and there will be some of the [ more ] timing savings we got into this year flowing back through into next year. But we'll manage -- things like bonuses, we're taking lower bonuses this year, hopefully, they'll reset back to being positive for next year. So we're not giving guidance around the size of the jaws, but -- and it will really depend.
Yes. Perfect. Then I suppose, finance, just a sense of how weak the revenue was this quarter? And then the brand refresh you had guided last year in the second half, was that stacked across the half or so mostly in the fourth quarter?
Yes. The marketing spend we did on Mortgage Choice was more in Q4 last year. It's fair to say that the financial services business has been impacted, again, it's sort of in line with what we saw in the first half with lower settlements driven by just lower market activity. I think the important thing, though, as the revenue has come down from Mortgage Choice, we have taken -- continue to take cost action appropriately. So holding the margin for that business is something that we've been focused on, and we're getting the benefits now starting to flow through from the completion of the integration of the 2 businesses. So I think for financial services, we feel positive about the fact that when the market turns, we'll be ready to capture that upside.
Yes. Perfect. And then, [ as far as ] just the pricing contracts, just interested in the decision to go sort of 1 year this time around. Just interested [ if you could talk ] about why you've done that. Is that just market uncertainty and everything that's been playing out or wanting to get through maybe a higher rate increase, as a bit of a one-off? Just interested, if you could talk about that, please?
Look, there's a lot of play here, Kane. As you've heard us say before, we think about price over a multiyear period and what we know we're going to be bringing to market in terms of value. Arguably, in this market, that might have been a case for doing a smaller increase, but we felt the value was so compelling and the feedback from customers back that up that we should go, as hard as we have. It will -- it gives us flexibility, plus we know there's a bit coming in the pipeline in terms of products and value. So we don't want to flag that now. We'll do that next year.
Is that giving flexibility around the Pro subscription and things you could do with that? Or is that sort of totally separate [indiscernible].
So Pro will be separate. So Pro is a charge to agents. So it's not going to go on the marketing schedule. It's a sub that gives you seller leads and it comes out of the agents pockets because its the value comes to them. The price next year, the value I'm talking about for the price increase on our other products is coming and given we're not going to talk about that till it hits the market, we're not going to price right now either.
One moment for our next question. [Operator Instructions] Our next question comes from the line of Lucy Huang from UBS.
I've got 3 questions as well. So maybe just on the comments you made on cost inflation, are you still seeing, I guess, salary inflation coming into FY '24. Just wondering how much you're expecting cost inflation -- costs, I guess, that inflationary growth to roughly trend if you factor in kind of the tax spend and salary inflation as well?
Yes. Look, we haven't communicated our salary increases to our staff yet, so it wouldn't be right for me to talk about it here. But we are anticipating clearly some salary growth, but we will be less than current inflation. But from a tax spend perspective, that's the requests coming through from our tech providers are higher than inflation.
Yes. If you think of -- some of the bigger providers like AWS and those sorts of providers, they're putting through double-digit price increases at the moment.
Yes. No, that's interesting. And then just with Premiere Plus, I think you mentioned now it's the most penetrated depth product in the business. So just wondering, where you have seen the largest upgrades on to Premiere Plus over the last kind of 6 months. And are there any kind of regions, where there's still a lot more opportunity for Premiere Plus penetration to grow coming into next year?
Yes. The Premiere Plus was the onetime offer that closed at 30 June last year. So there's been no additional uptakes to new contracts signed up to Premiere Plus during this financial year. They -- if they get to have a second opportunity to sign up, as part of the current pricing round that's happening at the moment, Lucy.
Yes. And at the moment, given how early it is in the process, I haven't actually looked at the analysis to be quite frank on by geography. I have spoken to our people in each of the states, and they're really pleased that they're getting the uptake. But I can't have that analysis yet, Lucy.
Yes. No problem. I mean, just last one on Elara. I'm just interested, where your [ visit Elite ] is at now? I think February, you mentioned roughly 1.6x. So has that extended over the last 3 months?
Yes. In terms of audience lead, yes, look, we peaked in the month of December at 1.6%. I think the average for the quarter, last quarter is 1.4%. We averaged 1.3%. So it did come down a little bit. We do have the ability to track marketing spend of the competition over there. And what it appears to us is particularly in the month of March, as they approach the year-end, they went really hard on buying audience. I think to maybe banks and clients in their -- in the year-end results announcement, that spend has completely dissipated in April, and our lead has rebounded accordingly.
One moment for our next question. And our next question comes from the line of Paul Mason from E&P.
Just 2 for me. So the first one, I was just wondering if you could talk through, so if the current mix stays just stable, is it 2Q '24 when that stops being a headwind? Or if not [ here we've ] just the timing on how that would play out if we don't have any more mix to your operation?And then the second one, just maybe more of a strategy around investment in India because you've done an amazing job controlling costs in Australia and India sort of looks like the last year, where you've actually got discretionary costs still really deployed significantly. So just your thinking around -- if you see a rebound in competitive market -- marketing spend or something like that, like would you be looking at maybe increasing the losses and not sticking to the trajectory of like declining EBITDA losses over time from growth? Or are you pretty committed to that track from [ here on out ]?
Thanks. In terms of geo mix, the negative drag from kind of lower Melbourne, Sydney, if you look in the listing numbers that we published that negative drag from Melbourne City being more negative than the rest of the country is diminishing, and we expect that to continue. In terms of the impact in Q1, it could possibly be a small negative still. But we're pretty hopeful that, that drag goes away for much of FY '24, which would be nice thing to have. We're not predicting that it will rebound, but if it does, that would be nice.In terms of India, actually, we were just with the Indian team recently going through their plans in a lot of detail for next year. We remain committed to FY '23 being the peak loss year on an EBITDA basis. The team are very committed to that and their plans around both revenue growth and the way they will structure their cost base supports that. This short-term expenditure you're seeing from some of the competitors on buying audience, I mean it is literally buying clicks and that's really [ buy ] value audience, as far as we're concerned.We're incredibly focused over there on having the best consumer experience in the market because we found the idea is you bring consumers to site, but then you want them to come back. And if you've got the best experience, they will come back, even if they try another experience than it's inferior. So we don't think we're going to need to -- and we didn't respond in the quarter. We could see what was happening. We didn't respond and sure enough, as soon as they had to pull back on that unsustainable spending, it bounced back in April. So we remain committed to that outlook for India.
One moment for our next question. And our next question comes from the line of Fraser Mcleish from MST Marquee.
Just first one, just I guess, a sort of high-ish level one for you, and you've obviously run the business through some pretty extreme conditions over the last few years, and REA has consistently grown its yield, you've got that double digit through the cycle yield target. And what's -- what you've seen over the last few years, as kind of -- in terms of your confidence going forward of being able to achieve that double-digit yield growth not over just the sort of next 2 years or 3 years, but over a longer period of time. I've got one more after that.
Yes. Fraser, the way we look at -- so we do a plan -- we do a planning cycle over 3 years. And part of that planning cycle is looking at value drops kind of year-on-year-on-year. And I can tell you right now, we've got -- we know what the road map looks like for the next 3 years, and we know that road map will justify the yield increase. So we're at a -- we've [ set out ] in double-digit yield increase across the cycle. We're in probably one of the crappiest parts of the cycle that we've seen for a long time, barring COVID, and yet we've still managed to achieve that with the value we've delivered.When I look at what we've got in this pipeline, I remain completely confident with our guidance of double-digit across the cycle. And even when there is a [indiscernible] we -- if the value is there, it justifies the price. We've always said we price to value. A price increase for the sake of it is, it's not something we want to do. And so a lot -- all of our strategy work in this space is around making sure we've got value drops every year. And we can see 3 -- at least 3 years out on that and beyond in some cases, for some products.
Just, Janelle, maybe just on the revenue growth in the quarter. I'm just trying to get my head around, and I think your revenue was down 4% in 2Q, down 3% in 3Q, yet the listings were down 21% in 2Q and they're only down 12% in 3Q. I'm just trying to understand what the differential was there. Is it maybe something to do with the write-down of trail commissions in the finance business and the timing of that?
So it's really deferral related in Q3. So in the first half, we got the benefit of deferral flowing through from that strong June last year, whereas when you look into Q3 year-on-year, we've actually had a drag from deferral. So it's gone the other way. So that's predominantly the main reason for the difference.
One moment for our next question. And our next question comes from the line of Sriharsh Singh from Bank of America Securities.
A few questions from my side. One on Premiere Plus contracts, which are the features are property agents most excited about in your latest rounds of conversations? Is it coming soon? Is it the listing bump? Is it the e-brochure?And second, have you seen any movements in the use of audience maximizer product in conjunction with your Prem Plus contracts?
Thanks for that. Look, in terms of customers, who aren't currently on Premiere Plus, I think the [ Premiere for Live ] feature is still particularly in -- what is perceived as a soft market, albeit houses are selling at least, that is seen as a great feature.Listings bump is one that they really like. The sold brochure is another one. But if I had to put it down to one feature, it's Premiere for Live. And when you're sitting in the living room, and you can offer it and your competitor can't, it's a pretty compelling feature. And I think that's one of the things that those who missed out last year really wanted to get hold of.In terms of audience maximizer, look, it's a listings product, and so its performance has reflected the movement in listings. And so we have sold less of that as we've had fewer listings. It is a product that we are redeveloping at the moment. We've got a plan to improve that significantly in the next 2 quarters and look forward to releasing that into FY '24. But you're right, it's down year-on-year in line with listings.
So have you seen people moving on to Prem Plus, so people carrying on with Prem Plus. Do you -- have you seen a little bit of downgrades on audience maximizer. Is that how we should take it?
No.
No. Okay. And understood. And quickly on India, where do you see the growth coming from? As in, are you most excited about onboarding more property agents to list their listings? Or are you more excited about RentPay and the Housing Edge platform?
Obviously, it's going to come from quite a number of areas. On the housing platform, we've got -- the great thing about the business there is there's just so much runway to go. So yes, some of the growth will come from more customers. We're nowhere near as penetrated on the customer base, as we need to be. That will involve rolling out to more Tier 2 cities. So we're only about halfway through the Tier 2 city roll out.PropTiger had its best quarter ever, and that's our business that sells new developments for commission, and that's going from strength to strength. It is helped by a very buoyant property market in India and [ obviously ] we see that continuing across the years. The RentPay and all of the Housing Edge products, we're expanding the product sets across that, and so that is going to give us good revenue growth. That does come at a cost. All of those products typically have a cost of goods sold, but the margin is attractive to us. So it's right across the spectrum, which is why we're confident of continuing revenue growth at very strong levels and also making our cost base sufficient into next year.
Understood. And just a follow-up on India real quick. One, how confident about -- how confident are you about the roll-up in Tier 2 cities and Tier 3 cities in India, and I come from probably 2 observations: one, the average rental in Tier 2 cities and also in metros is very small, probably $200, $300 a month or $400 a month max. Does that allow pricing paying power to agents; and second, a lot of the payments happen in cash because people leaving out the apartments want to avoid the tax payments. So how would you roll out RentPay and Housing Edge and successfully into some of these markets?
Look, RentPay is a convenience product. And if you've got lots of cash, then there's absolutely no need to use the RentPay product, but we're seeing the uptake is considerable. The roll out to Tier 2 will be more around the listing, the buy-sell offering. And the reason why the roll out is being staged, the way we do the roll out is [Ends Abruptly]