Labassa Capital Credit Fund Update April 2025

On a 12 month rolling basis, the Fund achieved an investor return of 10.57% p.a. net of fees as of April 2025. The Portfolio’s investments are located in NSW, Queensland and Victoria at an LVR of 68.9%. In the April month, the Fund maintained the ongoing investment portfolio from prior month. Labassa Capital’s April pipeline value was $656 million, encompassing 45 projects with an average facility value of approximately $14.6 million each.

The Reserve Bank announced a 0.25% rate cut on 20 May 2025 with more cash rate reductions anticipated for the balance of the 2025 calendar year. Labassa was approached by several investors on a widely discussed topic - will a lower interest rate drive property prices higher? We performed a review on historical data trends and have come to some key insights. Home values can be driven by a combination of factors, including the interest rate.

The three key drivers that has the most influence are:

• Population growth: Australia’s population grew by 2.1% in 2024, which is relatively high compared to the 0.6% recorded increase in The USA and 0.5% in The UK.

• Supply and demand: Housing supply has a continuous chronic shortage, just 72% of the required new homes to support population increase were built in 2024, and 61% in 2023. 

• Market confidence: Economic conditions and consumer confidence play an important role.

A recent Reuters survey suggests home prices to rise c. 3.7% in 2025, with annual increases of 5.0% expected in 2026 and 2027.  

If you would like to receive a copy of the latest newsletter, please enter your details into the Insights form below.