MACRO ECONOMIC FACTORS
IMPACTING OUR MORTGAGE FRUNDS
1. Stable Interest Rates
Throughout 2024, the Reserve Bank of Australia (RBA) has maintained the official cash rate at 4.1%. After a series of rate hikes to combat inflation, the decision to hold rates steady creates a more predictable environment for borrowers. For our mortgage funds, which rely on consistent loan performance, this stability helps ensure borrowers can manage their repayments effectively. With fixed- rate commercial loans in place, this environment supports the reliability of income generation from our loan portfolio.
2. Stabilised Property Market
The Australian property market has shown resilience, with prices stabilising across major cities like Sydney and Melbourne. This follows a period of correction after significant price growth during the pandemic. Regional markets have seen modest growth, driven by continued demand and population shifts. For our mortgage fund, which is backed by second mortgages on Australian properties, stable property values provide strong security. This stability reduces risk exposure and reinforces the fund’s capacity to maintain consistent returns.
3. Easing Inflation
Inflation has eased from its 2023 peak, now sitting around 4%, compared to the previous high of 7.8%. While inflationary pressures remain, the downward trend is alleviating the cost-of-living challenges faced by many households and businesses. This is particularly important for mortgage-backed investments, as it reduces pressure on borrowers and supports loan servicing. With inflation under control, the financial environment for property lending is more stable, enhancing the performance outlook for our fund.
4. Strong Employment Levels
Australia’s unemployment rate has remained low at 3.7%, reflecting a strong labour market. Employment growth continues to support household incomes, helping borrowers manage their financial commitments, including mortgage repayments. For our fund, this is a positive indicator, as high employment helps reduce the risk of loan defaults, ensuring a healthy loan book and reliable income for investors.
5. Regulatory Oversight
Australia’s regulatory environment, led by bodies such as the Australian Securities and Investments Commission (ASIC) , remains focused on maintaining stability in the financial and lending sectors. Prudent lending standards and regulatory and responsible entity oversight mean we are constantly aware of our obligation to underwrite loans responsibly.
Conclusion
The current macroeconomic environment in Australia-characterised by relatively stable interest rates currently, a resilient property market, easing inflation, strong employment, and oversight contribute to a favourable backdrop for us seeking to maintain the consistent and competitive returns that our investors rely on. Thank you for your ongoing trust in Maxiron Group. We remain committed to delivering stable results and look forward to continued success in the coming quarter.
Ray Saedi
Head of Investor Relations
PERFORMANCE SUMMARY
Fund Name: Maxiron Monthly Income Trust | Fund Type: Pooled Mortgage Fund
Please note that past performance is no guarantee as to the certainty of future performance.
FUND INSIGHTS
MORTGAGE PORTFOLIO SUMMARY
