REA Group (ASX:REA) received a 6% reduction in fiscal 2027 net profit forecast from Citi analyst Siraj Ahmed, with the analyst citing a near-term impact on the company's earnings due to the Australian Government's proposed negative gearing and capital gains tax changes, the Australian Financial Review reported Friday.

Ahmed maintained his buy recommendation on REA Group but lowered his target price by 10% to AU$181.15 as the market's reaction has been "excessive" after the company's shares fell 15% since the federal budget was handed down.

The impact is expected to be primarily a one-off, with increased turnover from positively geared investors and owner-occupiers, according to Citi.

The company anticipated housing listings to fall 5% in fiscal 2027 due to longer holding periods among negatively geared property investors, who account for roughly 40% of Australia's 3.3 million investment properties.

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