Community Living Topic - Community Living

1H26: Lifestyle Communities' settlements, DFM revenue and profit fall

by Ian Horswill

Published February 19, 2026

1H26: Lifestyle Communities' settlements, DFM revenue and profit fall

The effects of the ABC 7.30 attack on the Victorian land lease community operator in July 2024 and subsequent VCAT decision 12 months later are still reverberating.

In releasing its 1H26 financial report, Lifestyle Communities said statutory profit after tax was $15.8 million, compared with $22.7 million in 1HFY25. The decline reflects lower new home settlements (1HFY26: 128 v 1HFY25: 137), reduced DMF revenue following the VCAT DMF case (which is subject to appeal), and a greater portion of interest costs expensed against the land bank.

Demand in FY25 was impacted by the VCAT ruling and ABC 7.30's report in July 2024, the operator admitted.

Operating profit after tax was $16.1 million for 1HFY26 (1HFY25: $22.7m).

To illustrate the problems at Lifestyle Communities, land lease operator Serenitas in 1H26 achieved 253 settlements, a 21% increase year on year (yoy); and 298 sales, a 50% increase yoy. Stockland Halcyon recorded 254 land lease settlements (just over two per business day), up from 248 settlements in the same period a year earlier.

Green shoots

How Lifestyle Communities is increasing revenue.

There were some positive results from today's announcement.

Double-digit growth in net sales from new homes from the prior periods, up 168% from 1HFY25 (110 v 41) and up 12% from 2HFY25 (110 v 98). The team also delivered the strongest established net sales result in recent periods up 40% (1HFY26: 98 v 2HFY25: 70).
Steady growth in rental income from operating communities, up 11.9% from 1HFY25 ($25.3m v $22.6m), driven by new home settlements and CPI-linked rental increases, demonstrating the resilience of the rental annuity stream.
Positive operating cash flows of $41.2m for 1HFY26, up from negative $12.9m in 1HFY25. The improvement is a result of a reduction in development expenditure, which reflects disciplined management of build rates, and completion of civil and infrastructure works at communities in progress.
Net debt balance further reduced, down from $460.5 million at June 2025 to $323.6m at December 2025, following settlement of planned land sales and ongoing inventory realisation.
Debt facilities restructured, reducing overall limits from $571 million to $375 million. The new facilities, effective January 2026, simplify the financing structure while providing longer tenure with no Interest Cover Ratio covenant until the 30 June 2028 reporting period, and flexibility to navigate a recovery of the Victorian property market.
As at 31 December 2025, Lifestyle Communities had 180 unsold completed homes, which is down from 257 reported at 30 June 2025, and represents a 30% reduction in the number of inventory homes completed and not sold.
In addition, there were 9 unsold homes under construction compared with 12 unsold homes under construction at 30 June 2025.

Lifestyle Communities Chief Executive Officer Henry Ruiz.

CEO Henry Ruiz said there is land sales and a pipeline of 5,750 homes. "Our strategy is to carry four–five years of land supply. In 1HFY26, settlement occurred on the sale of four land parcels and a further 1,500 homes remain in the pipeline, of which:

756 homes remain in developing communities; and
738 homes to be developed from the retained land bank."

Lifestyle Communities advised it has received a notice of listing from the Court of Appeal – Supreme Court of Victoria over its application for leave to appeal and the appeals (if leave is granted) relating to the orders made by President Woodward in VCAT, will be heard by the Court of Appeal on Tuesday 23 June 2026. The Court will then deliver its decision in due course.