Why Domain Holdings (ASX:DHG) & REA Group Ltd. (ASX:REA) shares have risen so fast

The Domain Holdings Australia Ltd. (ASX:DHG) share price was trading 6% higher today following news of the Australian Government easing restrictions on COVID-19 lockdowns. REA Group Ltd. (ASX: REA) share price was also in positive territory, it was trading 2.2% higher.

Why the share price rise?

COVID-19 has hit Australian businesses hard. With restrictions on peoples movements from social distancing, life as we know it has been flipped on its head.

Not many businesses have been immune from Coronavirus, and Domain and Realestate.com were certainly not lucky enough to escape the wave of stock market declines and expected economic downturn.

The Australian Government’s strong stance on social distancing has meant activities like home inspections have become a difficulty for buyers, vendors, real estate agents and the like. With this, the two biggest players in the Australian online property market have both been closely watched given the cyclicality of property and fallout from auctions.

Both Domain and REA have been quick to act with the introduction of 3D tours to their listings for most new properties uploaded. This has been a positive for both sites with reports that people can get a good idea of the layout of the property without needing the leave their home. Both REA and Domain had a 3D walkthrough in development, this pandemic has just forced an early release for both products.

What now?

With the positive news that Coronavirus (COVID-19) lockdown restrictions would be eased in some states, both of these online businesses have seen increased traffic to their sites. Perhaps they have seen consumer confidence rise in the knowledge there is light at the end of the social distancing tunnel. Perhaps people are beginning to once again think about things outside the walls they are currently confined within?

I think these restrictions have made both of these businesses, REA and Domain, think laterally in ways they can give consumers a superior user experience in a time of need.

While confidence may be on the up, however, both of these companies have a current share price far behind where they were this time last year. I love my property, but I’m not sure I’d buy these businesses just yet. I’d prefer to buy these stocks.

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