Local Expertise Critical to Unlocking Opportunity Across Australia and New Zealand

MaxCap operates origination teams across five markets: Victoria, New South Wales, Queensland, Western Australia and New Zealand.

Each state lead was asked the same question: if an investor has one dollar to deploy in residential private credit this year, why should it go into your market?

Victoria | Jin Hwang & Rupert Blunden | directors, investment

Victoria has been the most talked-down market in Australia for the better part of three years.

“The negative narrative has been loud and persistent: land tax changes, builder insolvencies and pandemic hangovers,” Blunden said.

“But a market in downturn or with structural challenges is exactly where an experienced manager identifies opportunities. MaxCap’s roots and DNA are in Victoria. Our ability to source and structure risk-adjusted investments here is innate.”

For Hwang, the investment case starts with something Victoria’s critics tend to overlook: relative affordability.

“The market is ripe for Victoria to bounce back, and we are already seeing signs of recovery across various asset classes,” he said.

Melbourne is tracking toward six million people by 2030–31, driven primarily by overseas migration that Hwang describes as structurally deeper and less cyclical than the interstate flows underpinning demand in other markets, producing what he sees as a more stable, less volatile demand base than comparable east-coast cities.

The Suburban Rail Loop is already repricing corridors in the 10km to 15km CBD ring before a single train has left the station.

Blunden sees this as a structural shift in where opportunity sits: historically the industry has focused on the CBD, but the suburbs within the loop’s catchment—Box Hill, Cheltenham, Caulfield, Malvern, Burwood, Clayton—are now the hunting ground.

The insolvency cycle across 2022–2024 has reset the contractor market.

“Builders are better capitalised, more conservatively priced and more contractually disciplined than the cohort that preceded them,” Blunden said.

Project complexity is creating a capital bottleneck that private credit can solve more readily than traditional banks.

On downside protection, Hwang and Blunden approach the question from different angles.

“Downside protection comes from backing well-located prime assets with quality demand fundamentals,” Hwang said. “Tight feasibilities mean less room for things to go wrong, so robust assessment of sponsor quality and counterparty capability is paramount.”

Blunden said downside protection is about “understanding the depth of the end user: who realistically buys or leases a completed asset”.

“An LVR may not tell you the entire story, particularly in changing market conditions,” he said.

The most persistent misconception, according to Hwang, is also the most consequential for investors sitting on the sidelines.

“The biggest misconception is that the Victorian market equals bad or uninvestable,” Hwang said. “Many investors focus on tax regimes and land surcharges as no-go factors rather than the underlying fundamentals. That creates opportunity for those who look past the surface.”

Blunden said the Victorian downturn narrative formed through the pandemic means many investors are ignoring a market in the early stages of recovery.

“Risk-adjusted returns are easier achieved by being early to a recovery cycle, not late,” he said.

New South Wales | Adam Matkovich | director, debt investment

New South Wales presents the clearest demand story of any Australian market. Years of undersupply combined with ongoing delivery constraints have produced conditions Matkovich describes as the most compelling in the country for residential private credit.

The bottleneck is construction cost, and it is acute. Elevated costs have narrowed viable projects to mid-to-high-end developments, driving a wave of luxury product in affluent Sydney locations.

Signs are appearing that the depth of the luxury purchaser market is limited, a concentration that sophisticated credit managers are already pricing into sponsor selection.

“Delivery risk continues to be the most acute concern in financing considerations,” Matkovich said.

In areas where significant supply could reach the market quickly, sponsor selection becomes the primary underwriting variable.

The common misconception that NSW government policy changes will flood Sydney with new supply is overstated. Many projects will not proceed in the current cycle, constrained by declining profitability and a shrinking pool of qualified contractors willing to take them on.

Queensland | Michael Nitschke | state director

Queensland combines growth, stability and economic diversification more convincingly than any other Australian state.

South-East Queensland now has more than four million residents, with population growth driven by structural economic diversification rather than lifestyle migration alone. No single sector accounts for more than 12 per cent of the state’s economic output.

Construction capacity is constrained by competing demand between housing delivery and Olympics infrastructure works. Nitschke reads this as a supply-side stabiliser rather than a risk, with new residential supply remaining restricted heading into 2026.

The infrastructure linking Brisbane, Gold Coast and Sunshine Coast is creating a combined investment proposition, a diverse metro region functioning collectively rather than as three separate markets.

“The significant undersupply is supportive of asset values,” Nitschke said. “The key factors are consistent: experienced sponsors that understand their market and projects designed for the market they occupy.”

Western Australia | Justin Pearce | state director

Western Australia has spent years carrying the stigma of a boom-and-bust economy. Pearce is direct about where that characterisation now stands: it is stale, and investors still applying it are leaving returns on the table.

“This view is well past,” Pearce said. “The WA economy has shown more resilience than other state markets in recent years and is underpinned by strong fundamentals.”

WA has recorded the strongest domestic economic growth of any Australian state over the past six years, with seven consecutive operating surpluses and a triple-A credit rating.

Rental vacancy sits below 0.5 per cent, available listings stand at fewer than 2500 and annual net migration of around 60,000 people is outstripping new builds.

Construction cost escalation and labour shortages are reshaping how projects are structured. Fixed-price contracts are giving way to more complex arrangements that place greater delivery risk on developers and demand more rigorous due diligence from lenders.

Pre-sale contracts in WA’s land subdivision market typically carry deposits of $1000 to $5000, often subject to finance, a structure foreign to east-coast practice but standard in Perth and a segment MaxCap has adapted its approach to participate in.

New Zealand | Nick Bullick | chief investment officer

New Zealand is counterintuitive. The market has been soft; pre-sales are difficult and most investors looking from across the Tasman have either stayed away or encountered problems when they arrived without adequate local infrastructure.

“Lack of competition in the NZ market gives MaxCap NZ the ability to cherry-pick investments with the highest quality sponsors and achieve a higher delta return than Australia,” Bullick said.

A thinner field of credible lenders translates to pricing advantage for those with the local capability to assess risk properly.

Current residential stock is expected to be absorbed within 12 months. Developers willing to commence now will deliver into a supply-constrained market in two to three years, a structural setup that rewards early conviction. Well-located, design-led apartments are emerging as the stronger product alternative, with key Auckland rail completions due in 2026 expected to accelerate city-fringe development activity.

Bullick has a direct warning to prospective entrants: “You cannot invest in New Zealand from Australia without an experienced local team on the ground.”

Local knowledge trumps national headlines

Across five markets, the differences are more instructive than the similarities. Construction pressure is universal; where it originates and what it costs differs by state.

Migration is positive across the board; its composition and how it shapes product demand is entirely local.

That gap between the national narrative and the local signal is where experienced private credit managers earn their returns, and where local knowledge becomes the asset that national-average thinking cannot replicate.

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