There is a growing list of economic indicators pointing to stronger growth in consumer spending and sentiment, dwelling construction, business confidence and exports. These more favourable trends have been positively influenced by falling inflation and solid wages growth.
STOCKHEAD & THE AUSTRALIAN
SMSFs are turning to private credit, says Zagga, which is focused on showing “commercial” lending is less about skyscrapers and more about strong sponsors, steady margins and projects that actually stack up.
The Reserve Bank of Australia has delivered its third interest rate cut of 2025, trimming the cash rate by another 25 basis points. Since the start of the year, cumulative rate reductions have begun to pack more of a punch — and the RBA hopes this momentum will help bolster economic growth and prevent unemployment from climbing too far.
At the recent Commercial Property & Development Finance Summit, industry leaders came together to discuss one of the most significant shifts in Australia’s commercial real estate finance — the rapid rise of private credit.
STOCKHEAD & THE AUSTRALIAN
While the benefits of CRE debt are increasingly recognised, one fundamental question persists: how should investors access real estate private credit – directly or via a fund?
Both routes can be rewarding. What also needs to be considered is manager selection and doing your research to understand the structure, liquidity terms, and underlying credit processes. Now is the time to be diversified and defensive; in today’s uncertain investment environment, Australian real estate private credit is being duly recognised as an asset class of choice.
STOCKHEAD & THE AUSTRALIAN
As the dust settles on a turbulent financial year, and Division 296 looms large on the super tax horizon, Aussie investors are waking up to a sober truth: you don’t have to shoot the lights out to build a smart portfolio. Sometimes it’s about holding the torch steady.
The focus has now shifted from big swings for capital growth to something a little more… sensible. Income, consistency, capital preservation.
And that’s why private credit, a once-niche corner of the market, is starting to get more airtime.
Confirmation of on-target inflation and further evidence of a sluggish pace of economic growth was not enough for the RBA to lower interest rates at its 8 July meeting. It surprised economists and the market, leaving official interest rates at 3.85 per cent, just 50 basis points down from the peak. A 25 basis point cut was expected and priced into markets.
NIKKEI ASIA
Investors hunting for some safe haven income are turning to Australia’s growing real estate sector, boosting companies that help them direct their money into loans to property developers.
The country’s robust but predominantly inwardly focused economy, contained inflation and growing population make it a safe and stable investment destination with lower levels of volatility, according to Zagga, a player in the country’s private real estate credit market.
The Reserve Bank of Australia surprised markets and economists alike this month by holding interest rates steady, despite clear signs that inflation is returning to target levels. The decision, announced on 8 July, came as a surprise to many who had expected a rate cut, given the recent softening in inflation data. In short, the direction of rates hasn’t changed – but the timing has. The market still anticipates rate cuts later in the year, just not as soon as originally expected.
INVESTOR DAILY
In buoyant times, it’s easy to overlook the role of the steady and stable parts of a portfolio – the conservative income-generators that don’t make headlines. But these are exactly the assets that provide stability when everything else is in flux. Yet the traditional 60/40 portfolio is no longer proving a robust stronghold among record volatility. Traditionally, multi-asset portfolios have relied on the negative correlation between bonds and equities for diversification. However, increasingly, we are seeing a positive correlation in public markets. The year 2022 was an extreme example, where we saw significant correlated dips in both bonds and equities, and it is what we have again seen repeated in the most recent bout of market volatility.
We would like to acknowledge the Traditional Custodians of the lands, seas, and communities in which we provide our services. We would also like to pay our respects to the Elders past, present and emerging, and the continuing cultural influence they have on Australia.
Zagga Market Pty Limited (Australian Credit Licence 490904) ACN 611 662 401 acts as the Servicer of loans acting on behalf of the credit provider, Zagga Investments Pty Limited (AFSL 492354) ACN 615 154 786, trustee of the Zagga Investments Lending Trust
All portfolio numbers quoted correct as at 31 December 2025.
*Average investor return across the active portfolio as at 31 December 2025.
**Target return is after expenses and any applicable management fees for the year ended 30 June 2026. OCR = Australian Reserve Bank Official Cash Rate.
Past performance is not a reliable indicator of future performance, and should not be taken as an indication or guarantee of future results. Investments involve risk, fees and costs, and returns are not guaranteed. No representation or warranty is made regarding future performance, and economic conditions may change.
Prospective investors wishing to invest in a Zagga direct investment or a Zagga Fund should fully consider the Information Memorandum, ZFF Fact Sheet and/or ZWF Brochure, available from Zagga, before applying to invest. Investments are subject to risks.
Articles (including white papers and audio or video content) and FAQs on this website have been prepared by Zagga Investments Pty Limited (AFSL 492354) ACN 615 154 786 (Zagga) for general information only. They do not take into account your objectives, financial situation or needs, and are not a substitute for accounting, tax or other professional advice. Nothing in these articles or FAQs is an offer or solicitation to buy or sell a financial product, nor a recommendation to enter into or refrain from any transaction.
Any analysis provided in the articles (including white papers and audio or video content) or FAQs on this website is based on information believed to be reliable, however Zagga does not represent or warrant that it is accurate, complete or up to date. Zagga is not obliged to update the information or opinions contained in any article it. Opinions are those of the author and may change without notice. Readers should exercise their own judgment when relying on information contained in the articles or FAQs. To the maximum extent permitted by law, no member of Zagga accepts liability for any loss arising from the use of such information.
Media coverage featured reflects the independent opinions of the authors and does not necessarily represent the official views of Zagga.
