mcgrath blames housing slowdown for earnings loss

The impact of market conditions resulted in a loss of $1.9 million for the quarter ended 30 September 2018, which McGrath described as a “historically slow quarter”.

“Over the financial year to date, we have seen a noticeable slowdown in the market with a correction of residential property values experienced across the entire real estate sector,” McGrath chief executive Geoff Lucas said.

“In addition the tightened lending environment is impacting current transaction volumes, however, we believe this will ultimately strengthen the stability of our property market.”

Earlier this year, McGrath reported losses of $63 million for the year to June 30 with revenue dipping 23 per cent.

The high-profile real estate agency has been hit by difficult market conditions, lower sales volumes and the departure of some key sales agents over the past 18 months.

In June, McGrath secured a significant $10.7 million investment from Chinese property giant Aqualand at an issue price of 42.5¢ per share, providing the business with additional capital.

Aqualand is now McGrath’s second largest shareholder.

The company’s largest shareholder is agent John McGrath with around a 22 per cent holding.

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