Two of Australia's best-known real estate websites have crossed swords after one ran an advertising campaign claiming to be the biggest and best in the country.

REA Group Limited, which owns and operates, claimed its competitor Domain, owned by Fairfax Media, engaged in misleading or deceptive conduct with ads claiming to have more property listings and to be more highly rated.

The campaign in question began in February 2016 across Victoria, NSW and Queensland, with wraparound ads across The Age, The Sunday Age and The Sydney Morning Herald, and well as billboard ads in all three states.

Federal Court Justice Bernard Murphy said an ad claiming Domain had “the most property listings in Sydney” was misleading, because the evidence showed its app and website did not have more property listings overall in Sydney than

However, he found that ads claiming “the best property listings in Melbourne are on Domain” and Domain app is the “#1 property app in Australia” were just advertising puffery and would be understood by the audience as such.

He also declined to uphold REA’s claims that Domain’s ads stating it was “Australia’s highest rated property ad” were misleading, instead saying they had a “legitimate basis”.

“The evidence shows that at the relevant time the Domain app was the highest rated property app of its kind by reference to consumer ratings of all versions of the app on the Apple App Store and The Google Play Store,” he said.

Both parties have been directed to confer and prepare a timetable to deal with issues of relief.