The Australian private credit market could grow robustly in 2026, with the Reserve Bank of Australia (RBA) potentially embracing further interest rate rises this year, which would support returns on floating-rate private credit investments, according to Peter Szekely, managing director at Tanarra Credit Partners.
The size of the Australian private credit market rose by 9 per cent in 2025 to $225 billion, driven by increased appetite for the asset class from family offices, high-net worth individuals, retail investors and superannuation funds, Szekely said. Increased demand from commercial real estate borrowers and small to medium corporate borrowers also contributed to the growth of the market.
“Looking forward, sentiment towards private credit remains positive, with structural tailwinds continuing to support growth. However, increased allocation to the asset class is driving heightened competition, which has led to margin compression and more flexible terms for borrowers, which capped yields in 2025,” he said.
