CoStar Group Inc. offered to buy Domain Holdings Australia Ltd. in a deal valuing the property portal at A$2.65 billion ($1.7 billion), betting that falling interest rates will boost local home sales.

U.S. real-estate advertiser and analytics provider CoStar is looking to follow its recent U.K. expansion with a move into Australia.

U.S. online real estate firm CoStar is preparing a A$2.7 billion ($1.72 billion) bid for Australian property classifieds firm Domain Holdings, said a person with direct knowledge of the matter. CoStar declined to comment.