The operator of realestate.com.au has revealed social distancing measures related to COVID-19 have taken their toll on new listing volumes.
REA Group (ASX: REA) says during April national residential listings were down 33 per cent, with listings in Sydney down 18 per cent and 27 per cent in Melbourne.
To mitigate expected losses the company is implementing a cost-savings plan, including workforce planning measures, reduced marketing expenditure, and a review of supplier arrangements.
Overall REA's Q4 core operating expenses are expected to be approximately 20 per cent lower compared to the same period of time last year.
According to REA Group CEO Owen Wilson (pictured), pivoting to digital initiatives like virtual tours has been welcomed by clients and customers during the pandemic.
"Our priority has been to help our customers and consumers adapt to the new market conditions by providing the right support measures and new product features," says Wilson.
"Features like Digital Inspections are receiving rapid uptake by both customers and consumers. Since launching in March, over 47,000 Buy and Rent listings now feature digital video tours and we are seeing over 2 million views across digital inspections and 3D tours each week.
"This is connecting Agents with buyers, sellers and renters, even during these challenging times."
The COVID-19 operational update comes as REA Group announces its results for the third quarter of FY20.
During the nine months ending 31 March, 2020 revenue was down four per cent year on year to $640.2 million, while EBITDA was down three per cent to $390.8 million.
REA says the Australian property market was showing strong signs of recovery in the third quarter, but ultimately residential listings finished down two per cent at the end of March which the company attributes to COVID-19 impacts.
"Prior to the impact of COVID-19, the market recovery was in full flight with very strong listings in the weeks leading up to mid-March," Wilson said.
"In February we saw record audience numbers and strong buyer interest, reinforcing signs of the positive market momentum."
REA's COVID-19 update comes as other listed real estate groups brace for the ultimate impact of the pandemic.
The Agency Group (ASX: AU1) has been in an extended trading halt and suspension from trading as it prepares an announcement relating to financing for the future.
McGrath (ASX MEA) CEO Geoff Lucas decided to take a 40 per cent pay cut for May, June, and July as the group embarked on a crisis management plan to save cash.
The company also decided to close certain offices and immediately ceased all discretionary expenditures and non-essential spending.
REA competitor Domain (ASX: DHG) took a different approach to the crisis, deciding to pay staff partly in share rights over the next six months to preserve cash.
The plan was supported by employees, with more than 90 per cent of staff opting into the program dubbed 'Project Zipline'.
The project has the potential to cut Domain's total costs by around 9 per cent.
Business News Australia
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