Join our daily newsletter At The Bell to receive exclusive market insights
Are falling Australian house prices going to trigger a mini-GFC in the private credit landscape? That’s what some are not-so-quietly wondering after Australian private credit giant Metrics told investors they couldn’t withdraw money earlier this week.
For those out of the loop, “private credit” refers to non-bank lenders. Interest rates are typically higher than traditional bank loans but loan terms are often easier to customise and there might’t be such a focus on credit history over, say, the potential of a project.
Metrics manages some A$40B and it’s got three entities listed on the ASX – its Income Opportunities Trust (ASX: MOT), its Real Estate Multi-Strategy Fund (ASX: MRE) and its Master Income Trust (ASX: MXT).
Problems were made obvious earlier this week the MXT entity disclosed the company had suspended both redemptions (withdrawals) and also the publication of net asset value(s).
All in all, Metrics is yet to release its 2026 audited financial report; according to media reports, communications were sent to investors that ultimately stated Metrics is forced to consider a more depressed economic picture in attempting to value itself.
And that appears to be the problem: it isn’t sure what it’s worth.
And if that sounds strange, it is, and underscores most typical criticisms of the private credit sector which is also firmly on ASIC’s radar.
But in the back drop of all of this, Australian private credit lending tends to go towards real estate.
Consider that construction giants have been falling like flies down under in the last few years (we just lost Bathla a few weeks ago); construction costs have risen, there are labour shortages in some regions, and to top it all off – the CGT changes in the ALP’s latest budget are now pushing down house prices.
If you add all of that together, it’s obvious that there are probably more alarm bells ringing inside Metrics than what the firm is publicly admitting.
Then again, telling investors they can’t get their money back at the press of a button is probably all the evidence you need.
But Metrics is just one private credit lender in Australia. And the above issues affecting real estate are national – so the question is, where else are alarm bells ringing?
Join the discussion: See what’s trending right now on HotCopper, Australia’s largest stock forum, and be part of the conversations that move the markets.
The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.
