REA GROUP LTD — Capital/Financing Update 2006

11 May 2006

Dear Optionholder

RENOUNCEABLE RIGHTS ISSUE

The Directors of realestate.com.au Limited ("Company") announced on 10 May 2006. an underwritten pro-rata renounceable rights issue to shareholders of 1 new share for every 14.25 shares held on the record date at an issue price of A$3.00 per new share to raise $25,016,076 ("Rights Issue")

The Company also announced the Record Date of 5.00 pm, 19 May 2006 (EST) for the purposes of determining shareholders entitled to participate in the Rights Issue ("Record Date"). A prospectus for the Rights Issue will be despatched to all shareholders on 25 May 2006.

The terms and conditions of the options you currently hold do not entitle you to participate in the Rights issue which is being offered to holders of ordinary shares.

To participate in the Rights Issue, you must exercise your options and the shares in respect of those options must have been allotted to you before the Record Date. Accordingly, the completed exercise notice with attached option certificate and payment of the exercise price must be received by the Company by 5.00 pm, 17 May 2006 (EST) to allow the Company to allot shares to you by prior to the Record Date.

If you do not understand this letter you should consult your professional adviser or contact the Company's share registry at: Computershare Investor Services Pty Limited, Investor enguiries 1300 855 080.

Yours sincerely

Gall

Nicholas Geddes Company Secretary