Labassa Insights | Q3 2026 Macro Update

A review of the macroeconomic data as of 4 September 2026 informs the following observations on the current credit environment.

Headline GDP of +2.1% masks flat per-capita output, indicating no tangible improvement in household living standards. Inflation persistence at 3.5% (core above 3.6%) keeps monetary policy firmly restrictive. Market consensus points to a further hike to 4.6% before year-end.

Property values have declined for five consecutive months, with the correction now extending nationally. Internal forecasts anticipate a peak-to-trough decline of 10% or more. The AUD/USD at US$0.72 offers a modest entry point for offshore capital, with inbound institutional enquiries increasing in recent months.

Strategic posture for the balance of 2026: Capital preservation and credit quality remain paramount. Lending criteria have been tightened, with a focus on resilient opportunities supported by conservative LVRs, strong project profitability, and clearly defined exit strategies.

The firm is also selectively identifying distressed refinancing opportunities where borrowers face maturity walls and limited bank liquidity. This cycle will distinguish between lenders who maintain underwriting discipline and those who do not. Labassa Capital is committed to remaining in the former category, with disciplined execution and rigorous risk management serving as the foundation of all investment decisions.

Source: ABS and RBA