As cloudy as ever
As any veteran forecaster will tell you, the crystal ball is as cloudy as ever. Trade discord continues to weigh heavily on the global outlook. To this, we now add stretched valuations for US technology stocks, driven by buoyant expectations for artificial intelligence.
Sluggish growth, high inflation
In 2026, major economies are facing mild stagflation – sub-par growth and elevated inflation. Population growth remains firmer in Australia and more subdued in New Zealand, driving divergent demand cycles in 2026 and beyond.
The end is nigh for rate cuts
Stubbornly elevated inflation will bind the hands of central bankers. The window for rate cuts has closed. Investors are now turning their attention to rate hikes in 2026. Investors need to reconfigure their portfolios for this new economic landscape.
““The outlook for 2026 presents a lot of noise for investors to deal with. The key, as always, is to find the signal and identify the investment opportunities with sound risk adjusted returns. At MaxCap, we are keenly focused on sourcing high-quality opportunities in segments with strong demand fundamentals – clearly evident right now in the living and logistics sectors. With our established borrower relationships and disciplined approach to origination, we are well positioned to navigate this competitive lending landscape and deliver consistent returns for our investors.” “
Executive Chairman
Credit versus equity
Interest rates set the price of money over time. It also tilts the balance between equity and credit returns. At current rates, real estate credit is still outperforming real estate equity, albeit to a narrower extent, as equity rebounds in 2026.
Sector selection
While more sectors are returning to profitability, there is likely to be persistent alpha from sector selection. Residential and living segments are still well set to lead the way, followed by industrial and retail sectors, with office expected to lag in 2026.
Navigating markets in 2026
With a subdued economic outlook, investors are set to push into real, resilient incomes, particularly where there are good demand fundamentals like the living sector. The need for inflation and rate hedges are bringing the focus back onto real estate.
““While macro setting remains volatile, we’re seeing borrowers increasingly gravitate to market players who have a strong track record to provide certainty when it comes to funding requirements. This trend will continue throughout 2026.””
Executive Director
