With inflation running hot, questions are emerging about how a new rate‑hiking cycle could affect property prices and private credit in the year ahead.
Co-founder & Fund Manager Paul Miron spoke with Ausbiz about the growing risks within parts of the construction sector, cautioning that the property market at an aggregate level can behave very differently to what’s happening on the ground. He explains why unit supply is now commanding his attention. A risk to watch in 2026 and beyond? The impact of rising inflation and higher rates on future unit supply in Australia’s most stretched capital cities.
Key points:
- Interest rate hikes may stall property price growth and reduce borrowing capacity.
- Private credit exposed to higher risks, especially in construction and development.
- Significant undersupply in the national unit market may worsen if rising rates and inflation hamstring developers.
- 8% forecast rise in property prices is unlikely if borrowing costs climb, with reduced cash flow hampering buyers’ ability to secure finance.
- Msquared Capital is currently focused on completed property. Careful selection of conservative, defensive private credit deals will remain essential for navigating increased volatility.
