The REA Group Ltd (ASX: REA) share price sank to a multi-year low on Monday as selling pressure continued across the ASX.
Shares in the realestate.com.au owner finished the session down 0.81% at $151.00, after falling as low as $147.57 in morning trade.
That intraday low marked the weakest level since October 2023, extending the stock’s difficult run in 2026. The latest move leaves REA shares down around 17% since the start of the year.
Here’s what appears to be driving the continued weakness.
Investors are paying less for growth
REA has spent years trading as one of the ASX’s most expensive growth stocks.
Its leading position in online property listings, strong profit margins, and reliable cash flow helped investors justify paying a high price for the shares.
However, that high valuation is now being wound back.
The shares have slid from above $220 in October 2025 to around $150 this week.
This seems to be more about investors becoming less willing to pay a premium for growth than any major weakness in the business itself.
Even so, the REA still appears solid. Its large agent network, established audience reach, and ability to lift pricing across premium products continue to support earnings.
This looks more like investors reassessing the share price than any problem with how the business is performing.
Property market worries remain
The other key issue is housing market activity.
Even though REA’s business is strong, its growth is still tied to the number of homes being listed for sale, developer advertising budgets, and overall property turnover.
With interest rates still high and affordability stretched, investors seem to be questioning how quickly listing activity can improve.
Fewer homes changing hands can reduce demand for premium listings products, display advertising, and other services linked to property sales.
This was also a major concern back in October 2023, the last time the stock traded around these levels, which helps explain why the market is again focused on housing activity.
Foolish takeaway
REA remains one of the strongest platform businesses on the ASX, with a market position that competitors have struggled to challenge.
But even great businesses can fall when investors start paying less for growth and become more cautious on profits linked to the property market.
At this stage, the sell-off seems more about the current market backdrop.
Whether this proves to be an overreaction will likely depend on how quickly property listings and agent spending start to recover.
The post REA shares hit a multi-year low. Is the market overreacting? appeared first on The Motley Fool Australia.
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.