UPDATE: Bell Potter has just announced that REA Group Ltd (ASX: REA) is a top buy for investors looking to enhance their ASX 200 portfolios. The firm, known for its dominance in the Australian property listings market via realestate.com.au, is seeing significant developments that could impact investors TODAY.
In its latest report, Bell Potter highlighted a mixed performance for REA Group in 2025, revealing softer volumes but stronger-than-expected yield growth. Specifically, listings fell by 8% compared to the previous year, with declines of 4.1% in Melbourne and 6.0% in Sydney. However, the company reported a remarkable 13% growth in residential buy yields, attributed to a 7% average national price increase and strong performance in agent subscriptions.
Despite these challenges, Bell Potter’s analysts remain optimistic. They emphasize that REA Group’s management is confident in sustaining this strong yield throughout FY 2026. The broker noted:
“REA expects 13% Buy yield growth in Q1 to be sustainable through FY26, but flagged geo mix drives both upside/downside risk.”
This forecast is crucial as it underscores the potential resilience of this blue chip stock.
In a significant move, Bell Potter has maintained its buy rating but adjusted the price target to $244.00, down from $256.00. With REA Group’s current share price at $209.20, this indicates a potential upside of nearly 17% over the next 12 months. Additionally, investors can expect a modest 1.5% dividend yield in FY 2026, pushing total potential returns beyond 18%.
The broker’s recommendation reflects REA Group’s strong free cash flow profile, which supports ongoing platform reinvestment aimed at double-digit growth. Bell Potter stated:
“REA’s strong FCF profile allows for sustained platform reinvestment to target double-digit yield growth through the cycle.”
This includes developments in next-gen listings platforms to enhance customer experience and provide higher-quality leads.
As of now, national listings have been reiterated to be flat for FY 2026, following the recent 3% decline in October. The market is watching closely as these dynamics unfold, especially with a softer outlook for the second half of 2025 compared to the first half.
Investors interested in REA Group should act swiftly, as the stock’s potential for growth and dividends positions it as a noteworthy option in today’s volatile market.
For those considering a $1,000 investment in REA Group, experts caution that other stocks may offer better opportunities. Motley Fool investing expert Scott Phillips has recently identified five stocks that could outperform REA Group, highlighting the need for thorough research before making any investment decisions.
Stay tuned for updates as the situation develops and more insights emerge from Bell Potter and the broader market.
