Lifestyle Communities shares drop 10% amid margin pressure
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The news: Shares in Lifestyle Communities slumped in afternoon trade as pricing pressures weighed despite the property developer flagging an acceleration in sales momentum during the June quarter, with new home settlements climbing to 56, up from 43 in the prior quarter.
The numbers: Shares fell 10.2% to $4.95 at 2:14pm AEST.
Friday’s drop in the share price marks a reversal of the 9.7% surge on Thursday when the update was provided to the market.
The context: The sales improvement was supported by the group’s updated pricing strategy and its “Way to Live” brand campaign, which drove engagement and conversions across both new and established homes.
The company reported a substantial net debt reduction of $182.8 million, lowering its total debt to $277.7 million. It also recorded a sharp reduction in unsold inventory, reporting 113 completed unsold homes, down from 257 a year ago. There are also 13 unsold homes currently under construction, representing a 56% drop in completed unsold stock as of 31 May.
Citi analyst Suraj Nebhani said Lifestyle Communities has “adjusted pricing in response to weaker market” which implied a 30% fall in margin in the second half of FY26 compared to the first half.
“We believe this will drive further consensus downgrades for FY27 and FY28,” Nebhani said in a note to clients.
Nebhani also flagged that Lifestyle Communities expects its appeal against the VCAT ruling on voiding prior deferred management fee contracts will be heard on 23 June 2026.
What they said: “While the market remains measured, demand in our communities has proven resilient, particularly as downsizers continue to navigate the sale of their existing homes,” CEO Henry Ruiz said.
The sources: ASX, Citi research note
