Cedar Woods' Strong Guidance Upgrade Couldn't Escape a Sector Sell-Off

Record presales drove a 30-35% profit growth upgrade, but the stock still fell with the broader residential development sector before a policy carve-out helped its case.

2 Sep 2026 · 3 min read

Cedar Woods Properties upgraded its FY26 profit growth guidance to 30 to 35 percent from more than 20 percent on the back of strong presales, but the stock still fell more than 20 percent in March as the broader residential development sector faced widespread selling, before fund managers increasingly framed it as a beneficiary of a new-builds carve-out from federal budget negative gearing changes.

Strong presales drive an upgraded outlook

Pengana Capital Group said Cedar Woods was a top contributor to performance, up 12.11 percent, remaining constructive on the sector broadly with the most compelling opportunities in affordable residential developers where structural demand continues to outstrip supply. Endeavor Asset Management said Cedar Woods delivered a strong first-half FY26 result exceeding expectations, upgrading FY26 net profit growth guidance to 30 to 35 percent from a previous expectation of more than 20 percent, supported by $748 million in presales providing strong earnings visibility, alongside a solid development pipeline and low gearing. Oracle Advisory Group said Cedar Woods was capturing demand through rapid lot settlements, allowing margin expansion across its national land subdivision pipeline, with a strong balance sheet and high level of presales giving confidence in future revenue growth, alongside a newly formed joint venture using third-party capital.

A broad sector sell-off, not company-specific weakness

Pengana Capital Group said Cedar Woods fell 20.54 percent in March as one of its main detractors, even though the position had been a key contributor to performance over the prior 12 months, up 42.30 percent, and the fund still sees pockets of value in smaller, more affordable residential product offerings like Cedar Woods.

A rate-cut and budget policy beneficiary

Centennial Asset Management said Cedar Woods is a small-cap real estate example it thinks is well positioned once interest rates stop rising or settle on hold for the foreseeable future, given its exposure to new housing stock. SG Hiscock and Company said the diversified developer detracted as the federal budget's proposed removal of negative gearing on established properties and changes to capital gains tax concessions compounded already soft property sector sentiment, but argued Cedar Woods's multi-state exposure and strong presale pipeline position it well relative to more concentrated peers, with the new-builds carve-out from the negative gearing changes working in the company's favour.

CWP's multi-state exposure and strong presale pipeline position it well relative to more concentrated peers, and the new builds carve-out from the negative gearing changes is a positive.

— SG Hiscock and Company, Monthly Report, May 2026

September: a genuine market mispricing

Yarra Capital Management said Cedar Woods impressed across its multiple states, price points and products, with good coverage of presales into FY27 and an order book already building for FY28 and FY29, despite softer display home traffic, describing it as one of the pockets of opportunity the market has thrown out with the bathwater.

Cedar Woods impressed across its multiple states, price points and products, with good coverage of pre-sales into FY27 and an order book already building for FY28/29, seen as one of the pockets of opportunity the market has thrown out with the bathwater.

— Yarra Capital Management, Article, September 2026

What fund managers say they are watching next is continued conversion of the $748 million presales pipeline and growing FY28-29 order book, delivery on the 30 to 35 percent FY26 net profit growth guidance, benefit from the new-builds carve-out under the federal budget's negative gearing changes, and whether interest rates stabilise to support the broader residential recovery thesis.