On 9 October 2026, Lifestyle Communities Limited (ASX:LIC) released a trading update for the quarter ended 30 September 2026, titled Q1 FY27: Continued Progress of Strategic Priorities Amid Moderated Sales. The company reported lower sales than in the prior corresponding quarter, a reduction in net Debt and an update on its refund program.

Sales performance

New home net sales were 39 in Q1 FY27 compared with 50 in Q1 FY26, down 22.0%. Established home sales were 37 compared with 42, down 11.9%. The company said sales activity moderated as prospective customers took longer to progress downsizing decisions in a more measured Victorian housing market. Conversion rates were broadly stable, and appointment volumes improved in September following softer activity earlier in the period.

The company said it targets an average selling price for new homes of about 80% of the median detached house price in each catchment, and that softer sales in prior periods will continue to influence near-term settlement volumes.

Sales and settlement pipeline

At 30 September 2026, 42 new home settlements had been completed and there were 214 contracts on hand. Of these, 135 homes will be available for settlement in FY27: 29 customers are booked to settle before 30 June 2027 with an unconditional contract on their current homes, 58 are Marketing their own homes for sale, and 48 have placed a deposit but not yet listed their homes. A further 79 homes will be available for settlement in FY28 and beyond.

Net debt, inventory and refund program

Net debt fell by A$8.4 million to A$265.3 million at 30 September 2026, from A$273.7 million at 30 June 2026. Inventory is within target ranges across most communities, while Woodlea and Deanside remain above target, though combined inventory there decreased by 9.0% in the quarter.

Following the Victorian Court of Appeal decision, the company appointed Deloitte to administer refund requests from eligible former homeowners. The program opened on 6 October 2026, and the first payments to verified eligible applicants are expected in late October 2026. Payments will be funded from Working Capital and existing debt facilities and will reduce the A$77.1 million provision for deferred management fee repayments. A further update is due at the AGM on 19 November 2026.

Sector backdrop

Land Lease and downsizer communities depend on customers selling their existing homes, so residential market conditions in Victoria directly influence sales and settlement timing. Settlements, rather than sales, generally drive Revenue recognition.

Regulatory and legal decisions about deferred management fees have been a feature of the sector, and companies may carry provisions for potential repayments.

Risks shareholders should weigh

New home sales were down 22.0% and established sales down 11.9% year on year, and the company says conditions remain subdued. Of the 135 homes available for FY27 settlement, only 29 are backed by unconditional contracts on customers’ existing homes, so settlement timing depends on customers selling.

The refund program is funded from working capital and debt facilities, which may affect liquidity. The A$77.1 million provision will reduce as payments are made, and the number and value of eligible claims will depend on the verification process.

Net debt remains A$265.3 million. Woodlea and Deanside are still above target inventory, and the company’s results are concentrated in the Victorian market.

What’s next

Lifestyle Communities launched a Spring Brand Campaign in late September and plans an all-community open day in October. First refund payments are expected in late October 2026, and a further update will be provided at the AGM on 19 November 2026.