)
Melbourne-based land lease operator Lifestyle Communities (ASX: LIC) has reported a sharp drop in new home sales for the March quarter as weaker consumer confidence and broader economic uncertainty extended decision-making cycles among its core downsizer buyers.
Net sales of 43 homes in the three months to 31 March 2026 were down 28 per cent from 60 in the December quarter and 14 per cent below the 50 recorded in the September quarter, with the company pointing to cautious buyer behaviour linked to the sale of existing homes in a soft Victorian property market.
Despite the quarterly slowdown, nine-month net sales of 153 remain 68 per cent ahead of the 91 recorded in the prior corresponding period, while established home resales of 136 are up 58 per cent on the same stretch last year.
"While economic uncertainty and cautious consumer behaviour are expected to persist in the near term, we remain confident in the long-term fundamentals of the group's business model," says CEO Henry Ruiz.
"While fundamental demand for downsizer housing remains robust, prospective customers are navigating a more cautious market, leading to extended decision-making cycles as they manage the sale of their existing homes."
Lifestyle Communities develops and operates land lease communities targeting over-50s downsizers across Victoria, generating revenue from new and established home sales as well as recurring management and rental fees from homeowners.
The company says its pipeline of contracts on hand stood at 203 homes at the end of the March quarter, with 74 of those available for settlement before 30 June 2026. A further 129 contracted homes are expected to settle in FY27 or later.
Of the 43 net sales in the quarter, 13.6 per cent involved upfront management fee payments, a newer pricing structure the group has been introducing across its communities.
A new pricing structure for its deferred management fees was introduced in July 2025 following a Victorian Civil and Administrative Tribunal ruling that deemed its previous contract terms invalid.
On the balance sheet, the group has made significant progress reducing leverage. Net debt fell to $296.4 million at 31 March, down from $460.5 million at 30 June 2025, supported by ongoing settlement activity and lower capital expenditure.
Unsold completed inventory dropped 42.4 per cent to 148 homes from 257 at the start of the financial year.
The Q3 update follows a softer first half in which the company posted statutory profit of $15.8 million, down from $22.7 million in the prior corresponding period.
Dividends remain paused as the group prioritises debt reduction.
Earlier this year, Ruiz revealed the company had experienced a softening of the Victorian property market.
In its update announced today, Lifestyle Communities says it will continues to be "market led" in its development and sales approach with a focus on positioning the business to benefit from improvements in Victorian property market conditions.
"Management maintains a strong focus on targeted price adjustments, reduction in built stock towards more optimal levels and disciplined ordering of new homes commensurate with sales rates," says the company.
"As previously highlighted, as a consequence of the lag between sales and settlements, lower prior period sales rates will temper future settlements."
)
