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Senate inquiry to probe private credit and home ownership

Private credit is one of the hottest asset classes in Australia, and now a Senate inquiry will look into how it could boost home ownership.

Anthony Galloway and Andrew Cornell
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Andrew Bragg will chair the inquiry which will look into the lending practises of banks and private credit. AAP/Mick Tsikas

A new Senate inquiry will investigate the potential role of private credit in boosting home ownership as the withdrawal of banks is bringing in a range of new non-bank players to the market.

Liberal senator Andrew Bragg was on Wednesday afternoon successful in establishing an inquiry into how Australia’s financial regulation can drive home ownership. The inquiry will likely hear from investors, lenders and the Australian Prudential Regulation Authority (APRA).

Capital Brief has previously reported on the increased use of private credit in the Australian investment landscape, which has raised concerns it is a late-cycle play drawing investors not across the risks involved. In the US it dominates commercial property lending to such an extent that regulators worry about systemic risk.

But the most established and dominant form of commercial property lending supported by private credit is that for residential property developments, hence the potential for addressing supply shortfalls.