Aspen Group's 120% Housing Rally Meets a Sharp March Reversal

Fund managers say Australia's structural housing undersupply still supports the long-term thesis despite a sharp rate-driven pullback

2 Jul 2026 · 4 min read

Affordable housing developer Aspen Group rose more than 120% in 2025 as fund managers backed its exposure to Australia's structural housing undersupply, before taking profits ahead of a sharp March 2026 pullback tied to shifting rate expectations.

A re-rate built on visibility into the development pipeline

Airlie Funds Management's September 2025 update reported FY25 earnings up 22 per cent on the prior year and ahead of market expectations, with the stock re-rating significantly since its initial purchase as the market gained greater visibility into Aspen's pipeline of affordable housing developments. Perpetual Asset Management's own September and October updates tracked continued strong performance, culminating with the opportunistic acquisition of a greenfield master-planned community site in Wallaroo, South Australia, secured out of administration at an attractive entry price.

A focus on the underserved affordable end of the market

Cooper Investors' December 2025 update framed the scale of the opportunity: affordable housing is a huge and multi-faceted problem in Australia, driven by high costs of land, materials, labour and taxes, one Aspen was exceptionally well placed to serve given its focus on that underserved segment. Airlie Funds Management's January 2026 update reported Aspen as the fund's best performer for the year, up nearly one and a half times since purchase, targeting a price point of around $400 a week rental or $400,000 outright, with a track record of earning returns on capital above 20 per cent.

Aspen has been the best performer for the portfolio this year. It's up nearly one and a half times since we bought it, and we still think the outlook is really compelling. They've built a platform to deliver affordable rental accommodation in Australia. They've got a history of earning 20% plus returns on capital.

— Airlie Funds Management, Webinar, January 2026

Profit-taking, then a sharp reversal

Perpetual Asset Management's January 2026 update reported the first signs of profit-taking, with Aspen detracting 9.5 per cent that month as rising bond yields and shifting inflation expectations created headwinds across the broader REIT sector. That weakness accelerated sharply by March, with Perpetual reporting shares down 27 per cent that month alone, part of a broader deterioration in risk appetite for housing-related equities amid heightened inflation concerns and the prospect of further rate rises.

Following an exceptionally strong calendar year in 2025, during which Aspen Group (APZ) rose more than 120% and made a significant contribution to the Fund's one year returns, the stock gave back some of those gains in Q3. In March APZ fell 27%, reflecting a sharp deterioration in risk appetite for housing related equities amid heightened inflation concerns, the prospect of further interest rate increases and weakening consumer sentiment.

— Perpetual Asset Management, Monthly Report, March 2026

An exit, then renewed conviction

SG Hiscock & Company's April 2026 update reported exiting its position in the first quarter of 2026 after a strong run that took the stock from around $2.20 in late 2024 to over $5, while still describing Aspen as a high-quality, well-managed group, consistent with the fund's disciplined value investing approach. Airlie Funds Management's July 2026 update signalled renewed conviction despite the volatility, continuing to highlight the huge undersupply of affordable housing in Australia and the track record of joint chief executives John Carter and David Dixon in buying land well and building homes people want to live in.