PropertyGuru looks past slowing revenue growth in Q1, talks up AI and M&A

PropertyGuru, the Southeast Asian online portal for real estate listed on the New York Stock Exchange, recently announced its results for the first quarter of 2023.

Revenue was up by 16% year on year at US$24 million, but that’s the lowest it has been since Q1 2022.

Meanwhile, the company barely eked out positive adjusted EBITDA, down by 60% from the same period a year ago.

Vietnam property slump hits revenue

The main reason for PropertyGuru’s slowing revenue growth was its performance in Vietnam, where revenue fell by 34% year on year.

According to the company, the decline stems from the Vietnamese government’s “targeted effort to cool real estate market activity,” and this is expected to remain the “primary challenge in the near-term.”

On the earnings call, PropertyGuru CFO Joe Dische said there was a 32% drop in the number of listings in Vietnam in Q1 2023 compared to the same quarter in 2022, while the average revenue per listing stayed roughly flat.

CEO Hari Krishnan emphasized that in the longer term, PropertyGuru has a “strong conviction” in Vietnam’s property market. The firm will continue to invest in the search experience, offer simplified ad choices, and improve the quality of listings.

Krishnan also cited positive developments at the macro level, including the lowering of interest rates by Vietnam’s central bank in March to boost economic growth, raising the possibility of a market turnaround in the second half of 2023.

Ho Chi Minh City, Vietnam / Photo credit: Shutterstock

However, not everyone is equally optimistic about the country’s property market. Industry watchers like the Vietnam Association of Construction Contractors, for instance, are not expecting a rebound until the end of 2024.

The paradox of cooling measures

In Singapore, the company’s largest market, revenue growth was driven by a rising pool of property agents – who pay to use the PropertyGuru platform – and the increasing average revenue per agent.

Krishnan described the city-state’s property market as “really strong,” enabling the company to deliver “premium products” that have seen “strong adoption.”

An example of this is MRT Featured Agents, which allows homebuyers to filter their search for properties or agents based on specific mass rapid transit train stations in Singapore.

However, rising home prices recently led the government to introduce a fresh set of measures to cool the property market.

Listing costs eat into earnings

Looking to acquire in adjacencies