Australia's REA Group falls after UBS downgrade on volume risks from tax changes

UBS AG

10/06/2026 04:32

    June 10 (Reuters) - UBS UBSG.S has downgraded Australia's REA Group REA.AX and cut its target price by about 23%, citing near-term volume risks from the recent changes to property tax, sending shares of the property listing firm down 3% on Wednesday.
Shares of REA Group fell as much as 3.2% to A$147.72, their lowest level since May 29. The broader S&P/ASX 200 benchmark index .AXJO was last up 0.3%.

Here are some more details:
UBS cut rating to "neutral" from "buy", factoring in the likelihood of volumes declining around 10% over 2027 and 2028, while flagging limited scope for near-term re-rating. 
The brokerage cut 12-month price target to A$165 from A$213, reflecting lower earnings estimates over 2027 and 2028.
Considering the uncertainty surrounding property tax changes and UBS' expectations of a 3% to 5% drop in house prices over the next 12 months, the brokerage lowered its estimate of 2027 volume growth from flat to a decline of 8% with further weakening in 2028.
Australia passed a bill this month for the government's biggest overhaul of taxes in decades, curbing tax breaks for property investors to make housing more affordable and scrapping a capital gains discount.
However, UBS said there could be another interest rate hike in August to 4.6%, which could drive selling as mortgage pressures build.    

 (Reporting by Aamir Shaik Khalid in Bengaluru; Editing by Subhranshu Sahu)
 ((Aamir.SheikKhalid@thomsonreuters.com;))