Another rate rise, but it’s not over yet
The RBA is resolute in its task to bring inflation under control
The RBA is resolute in its task to bring inflation under control
The cash rate has hit its highest peak since 2012 following the RBA’s decision this afternoon to raise it by a further 25 basis points.
This will raise interest rates a further 0.25 percent to 3.6 percent, as predicted by most economists and the major banks earlier today. It marks the 10th consecutive rise since May 2022 and places the cash rate at 105 basis points above the pre-COVID decade average of 2.55 percent. For borrowers with a $500,000 mortgage, that adds about $160 more each month to repayments.
Despite concerns expressed by various sectors of the community regarding the impacts of further pressure on household incomes, the Reserve Bank’s statement cited an ongoing commitment to driving down inflation as an influence on its decision.
“The Board’s priority is to return inflation to target,” the board said. “High inflation makes life difficult for people and damages the functioning of the economy. And if high inflation were to become entrenched in people’s expectations, it would be very costly to reduce later, involving even higher interest rates and a larger rise in unemployment.
“The Board is seeking to return inflation to the 2–3 per cent target range while keeping the economy on an even keel, but the path to achieving a soft landing remains a narrow one.”
Responding to criticism from some quarters that the full effects of consecutive rate rises over the past 10 months has yet to be quantified, the board said it recognised that “monetary policy operates with a lag and that the full effect of the cumulative increase in interest rates is yet to be felt in mortgage payments” and that some households would be feeling the pinch more than others.
“Some households have substantial savings buffers, but others are experiencing a painful squeeze on their budgets due to higher interest rates and the increase in the cost of living,” it said.
Indicating that further rate rises could be on the way, the board said ‘further tightening of monetary policy will be needed’.
“The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that.”
The RBA is next due to meet on April 4.
As Australia’s family offices expand their presence in private credit, a growing number of commercial real estate debt (CRED) managers are turning to them as flexible, strategic funding partners.
Knight Frank’s latest Horizon 2025 update signals renewed confidence in Australian commercial real estate, with signs of recovery accelerating across cities and sectors.
As Australia’s family offices expand their presence in private credit, a growing number of commercial real estate debt (CRED) managers are turning to them as flexible, strategic funding partners.
Family offices are increasingly asserting their dominance in Australia’s private credit markets, particularly in the commercial real estate debt (CRED) segment.
With more than 2,000 family offices now operating nationally—an increase of over 150% in the past decade, according to KPMG—their influence is not only growing in scale, but also in strategic sophistication.
Traditionally focused on preserving intergenerational wealth, COI Capital has found that family offices have broadened their mandates to include more active and yield-driven deployment of capital, particularly through private credit vehicles.
This shift is underpinned by a defensive allocation rationale: enhanced risk-adjusted returns, predictable income, and collateral-backed structures offer an attractive alternative to the volatility of public markets.
As family offices increase their exposure to private credit, the dynamic between managers and capital providers is evolving. Family offices are highly discerning capital allocators.
They expect enhanced reporting, real-time visibility into asset performance, and access to decision-makers are key differentiators for successful managers. Co-investment rights, performance-based fees, and downside protection mechanisms are increasingly standard features.
While typically fee-sensitive, many family offices are willing to accept standard management and performance fee structures when allocating $5M+ tickets, recognising the sourcing advantage and risk oversight provided by experienced managers. This has created a tiered market where only managers with demonstrated execution capability, origination networks, and robust governance frameworks are considered suitable partners.
Notably, many are competing by offering differentiated access models, such as segregated mandates, debt tranches, or tailored securitisation vehicles.
There are important distinctions between onshore and offshore family offices in the context of CRED participation:
Onshore Family Offices: Typically have deep relationships with local stakeholders (brokers, valuers, developers) and a more intuitive understanding of planning, legal, and enforcement frameworks in Australian real estate markets. They are more likely to engage directly or via specialised mandates with domestic managers.
Offshore Family Offices: While often attracted to the yield premium and legal protections offered in Australia, they face structural barriers in accessing deal flow. Currency risk, tax treatment, and regulatory unfamiliarity are key concerns. However, they bring diversification and scale, often via feeder vehicles, special-purpose structures, or syndicated participation with Tier 1 managers.
COI Capital Management has both an offshore and onshore strategy to assist and suit both distinct Family Office needs.
The influx of family office capital into private credit markets has several systemic implications:
Family offices, deploying capital in significant tranches, have enhanced liquidity across the mid-market CRE sector.
Their ability to move quickly with minimal conditionality has contributed to yield compression, particularly on low-LVR, income-producing assets.
As a few family offices dominate large allocations, concerns emerge around pricing power, governance, and systemic concentration risk.
Unlike ADIs or superannuation funds, family offices operate outside the core prudential framework, raising transparency and risk management questions, particularly in a stress scenario.
Yes—family offices are arguably among the most attractive funding partners for CRED managers today. Their capital is not only flexible and long-term focused, but also often deployed with a strategic mindset.
Many family offices now have a deep understanding of the risk-return profile of CRE debt, making them highly engaged and informed investors.
They’re typically open to co-investment, bespoke structuring, and are less bogged down by institutional red tape, allowing them to move quickly and decisively when the right opportunity presents itself. For managers, this combination of agility, scale, and sophistication makes them a valuable and increasingly sought-after partner in the private credit space.
For high-performing CRED managers with demonstrable origination, governance, and reporting frameworks, family offices offer not only a reliable source of capital but also a collaborative partnership model capable of supporting large-scale deployments across market cycles.
Faris Dedic is the Founder and Managing Director of DIG Capital Advisory and COI Capital Management
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