Key Takeaways
- • Sydney-based hedge fund Bristlemoon Capital has taken a short position on REA Group (ASX: REA), Australia's largest real estate listings company, betting its shares will fall nearly 40 per cent from current levels.
- • Bristlemoon, run by George Hadjia, a former partner of Montaka Global Investments, argues investors are underestimating the impact of a rapidly cooling Australian housing market.
- • The fund cites the Reserve Bank of Australia's aggressive interest rate cycle and sweeping tax changes announced in the budget as factors that will intensify falling property prices.
- • The housing market is described as on track for its steepest downturn in 40 years.
Summary
Sydney-based hedge fund Bristlemoon Capital is betting that shares in REA Group, Australia's largest real estate listings company, will plunge nearly 40 per cent from current levels, according to the primary report. The fund is run by George Hadjia, a former partner of Montaka Global Investments.
Bristlemoon's thesis rests on the view that the Reserve Bank's aggressive interest rate cycle and sweeping tax changes announced in the federal budget will intensify the slump in property prices. The fund believes investors are underestimating the fallout from Australia's rapidly cooling housing market, which it expects to be on track for its steepest downturn in 40 years.
For institutional investors, the position signals a bearish view not only on a single listed platform but on the broader residential property cycle, given REA's dependence on property transaction volumes and listing activity. A decline in turnover and advertising demand would be expected to weigh on the company's earnings if the housing downturn deepens.
The primary source is partly paywalled, and the available reporting does not include REA's current share price, position size, or a formal response from the company. Coverage of the story is also referenced by the Australian Financial Review under the same headline.
Bristlemoon's thesis rests on the view that the Reserve Bank's aggressive interest rate cycle and sweeping tax changes announced in the federal budget will intensify the slump in property prices. The fund believes investors are underestimating the fallout from Australia's rapidly cooling housing market, which it expects to be on track for its steepest downturn in 40 years.
For institutional investors, the position signals a bearish view not only on a single listed platform but on the broader residential property cycle, given REA's dependence on property transaction volumes and listing activity. A decline in turnover and advertising demand would be expected to weigh on the company's earnings if the housing downturn deepens.
The primary source is partly paywalled, and the available reporting does not include REA's current share price, position size, or a formal response from the company. Coverage of the story is also referenced by the Australian Financial Review under the same headline.
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