Labassa Capital Credit Fund Update January 2026

In January 2026, the Fund achieved an investor return of 10.20% p.a. net of fees on a 12-month rolling basis. Portfolio LVR was maintained at 49.67%. Portfolio assets are all located on the eastern seaboard.

In early February, the RBA raised the official cash rate by 25bps to 3.85%, marking the first rate increase since 2023 amid stronger-than-expected inflation and ongoing labour market resilience. RBA Governor Michele Bullock reiterated that inflation remains above target and that further policy tightening remains possible should price pressures persist.

Cash rate adjustments continue to influence borrower behaviour and capital flows across the property market. Higher borrowing costs reduce household borrowing capacity and increase mortgage servicing expenses, tempering buyer sentiment and moderating transaction volumes. Historically, the periods of risig rates tend to slow price momentum rather than reverse it entirely, particularly where structural supply shortages remain. In 2026, tight housing supply, strong population growth and rental market strength continue to underpin asset values, although buyers remain increasingly selective and price sensitive in interest-rate exposed segments.

Against this backdrop, demand for structured real estate debt remains robust. Developers and sponsors continue to seek flexible, relationship-driven capital solutions whilst private credit remains attractive to investors given higher base rates and improved risk-adjusted return profiles.

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