How Cedar Woods’ $763M Presales Surge Fuels 15% Profit Growth Forecast

Strong Sales Momentum Drives Earnings Upgrade

Cedar Woods Properties Limited (ASX, CWP) has announced a significant upgrade to its FY26 net profit after tax (NPAT) growth guidance, now expecting approximately 15% growth compared to the previous forecast of 10%. This optimistic revision follows a record-breaking first quarter, with presales reaching $763 million, a 36% increase compared to the same period last year and 16% higher than the end of FY25.

The surge in presales reflects both increased sales volumes and rising prices, as Cedar Woods continues to release new stages and projects into an undersupplied Australian housing market. Approximately $410 million of these presales are expected to settle within FY26, providing strong earnings visibility, while the remainder is spread across FY27 and FY28.

Diverse Pipeline and Regional Performance

The company’s development pipeline remains robust, comprising around 9,400 lots, dwellings, and office units across 35 projects in Queensland, Western Australia, Victoria, and South Australia. Most projects are actively progressing and contributing to earnings. Sales volumes are particularly strong in Western Australia, especially in land estates, while Queensland maintains solid demand despite fewer stage releases in the quarter.

Victoria’s market showed subdued sales and stable prices during the quarter, though recent activity at the Mason Quarter project indicates renewed buyer interest. South Australia is poised for growth with the launch of the Sereno apartment project and the ongoing development of a major 860-lot subdivision at Mt Barker, expected to receive planning approval in 2026.

Financial Strength and Strategic Growth Initiatives

Cedar Woods’ balance sheet remains strong, with modest gearing and $330 million in corporate finance facilities, including $264 million maturing in three years and $66 million in five years, providing long-term funding security. The company’s capital management strategy supports sustained shareholder returns and investment in growth opportunities.

Recent acquisitions, such as the Mt Barker subdivision and Fairfield apartment project, alongside partnerships with QIC Limited and Tokyo Gas Real Estate, aim to scale the business efficiently and enhance returns. These collaborations also enable Cedar Woods to pursue larger sites and generate fee income, underpinning future earnings growth.

Market Tailwinds and Policy Support

Favourable macroeconomic factors, including population growth, low housing supply, stable employment, easing interest rates, and government initiatives, are creating a supportive environment for new housing demand. Policies accelerating planning approvals, increasing building heights, and offering incentives like stamp duty exemptions and home deposit guarantees are particularly beneficial for Cedar Woods’ affordable housing projects.

With strong sales momentum continuing into the second quarter and a forecast record profit for FY26, the company is well positioned to deliver increased dividends to shareholders, reflecting confidence in its growth trajectory.