Aug 12, 2026 – 5.27pmThree interest rates increases this year have created a more difficult environment for Australian private credit investors, who have significant exposure to real estate developers now facing higher construction costs at the same time as sentiment in the property market weakens.That’s the warning from Wall Street investment giant Morgan Stanley, who said there was “limited transparency” about the loans made by local private credit firms, with the outlook “determined by the pass-through of construction cost inflation to developer margins and feasibility” and interest rates.Subscribe to gift this articleGift 5 articles to anyone you choose each month when you subscribe.Subscribe nowAlready a subscriber? Fetching latest articles
Morgan Stanley says property downturn creating private credit headache
Fears around private credit have emerged as RBA governor Michele Bullock says she was more worried about a lack of transparency among non-bank lenders in the US.
TL;DRAI
Morgan Stanley warns three 2026 rate hikes have strained Australian private credit investors amid rising construction costs and weakening property sentiment. Opaque lending practices signal systemic risk that could tighten development financing and real estate market stability.
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