News

The Reserve Bank of Australia (RBA) will convene next week to determine whether interest rates should be cut further following on from February’s cut.

Most economists do not expect a further rate reduction of 0.25% until the May meeting however the lacklustre employment data which showed employment fell by 53,000 in February indicates a further rate cut could be possible.

Whilst the overall employment rate held steady at 4.1% mainly due to a fall in the participation rate, it will be the ABS February monthly CPI indicator due tomorrow which will likely determine if the April board meeting results in a further rate cut.

If the monthly inflation data comes in softer than expected, and signals that the March quarter CPI, due at the end of April, is likely to be below the RBA’s forecasts, the meeting may well become a live one, with a rate cut definitely a possibility.

With the US stance on further trade tariffs creating uncertainty for policy makers as to whether they may stimulate inflation, we believe their economic impact on Australia is likely to be limited and on balance the uncertainty should add to the case for a further rate reduction next week.

Residential property prices stabilised in February, with CoreLogic reporting a 0.3% national increase. Lower borrowing costs and improved sentiment are supporting renewed buyer confidence and we expect this to be the theme of 2025 as the RBA cuts rates further.

ASCF is currently offering some of the most competitive returns in the market for pooled mortgage funds. 

If you are considering an investment our High Yield Fund is currently paying a targeted distribution rate of 7.75% per annum with interest paid monthly on a 12-month fixed-term investment, meaning your targeted rate of return will not change during the investment term.

ASCF Current Targeted Distribution Rates

ASCF Premium Capital Fund

6 Months	12 Months	18 Months	24 Months
6.10%	6.25%	6.75%	6.30%

ASCF Private Fund

3 Months	6 Months	12 Months	24 Months
8.19%	8.39%	8.59%	8.49%

In February, loans and inquiry levels were strong, with $19,017,322.000 in new loans settled.

The unit price across all three of our retail funds remains stable at $1.00 per unit.

All monthly distributions have been paid in full for the month of February.

Lending Activity Update

Quarterly Loan Settlements
as at 28th of February 2025

Current Loans by Fund Source
as at 28th of February 2025

Current Loans Geography
as at 28th of February 2025

Why Invest with ASCF?

What are the benefits of using a Custodian for an investor 

When it comes to managing investor funds, ASCF takes investor security seriously and uses Certane CT Pty Ltd as the custodian of all investor assets. A custodian is a financial institution that safeguards investor funds, providing peace of mind by ensuring funds are managed securely and in compliance with regulations.

Here’s why using a custodian is a smart move:

1. Stronger Security – Custodians keep funds separate from investment managers, reducing the risk of fraud or mismanagement. This extra layer of protection ensures your investments remain safe.
2. Regulatory Compliance – Financial regulations are complex, but custodians help ensure investments meet legal standards, reducing the risk of penalties or compliance issues.
3. Lower Risk – Custodians help prevent unauthorised transactions and errors, creating a secure environment for your investments.
4. Faster Transactions – They streamline asset transfers and settlements, reducing delays and errors.

The bottom line
Using a custodian isn’t just about compliance—it’s about security, efficiency, and peace of mind.

Whether you’re an individual investor, company or trust, a custodian helps protect and manage your funds effectively.

Want to learn more? Contact us to explore your investment options.

Important information: At ASCF, we’re here to help you invest on your terms. Since inception, all investors have received their targeted distribution rate monthly and all redemption requests have been paid on time and in full, however past performance is not indicative of future performance. Distributions are not guaranteed nor a forecast. Lower than expected returns may be achieved. Investment in the Funds is not a bank deposit and investors risk losing some or all of their capital. Withdrawal rights are subject to liquidity and may be delayed or suspended. Read the PDS and TMD, available from our website.

Get in touch today!

An Interesting Transaction

Problem:

A transport operator was presented to us by a valued finance broker seeking funding to pay outstanding tax liabilities. The ATO is currently applying significant pressure on Australian businesses with outstanding tax liabilities and are commonly issuing winding up notices rather than offering payment plans.

Solution:

ASCF promptly ordered valuations to ensure there was sufficient equity in the customers three residential properties to allow for a 2^nd mortgage to meet the outstanding tax liabilities. Upon receipt, ASCF offered the customer a 2^nd mortgage loan of $560,000 for a term of 12 months at a rate of 18.96%pa. After confirming the value of the 1^st mortgages with ANZ (the 1^st mortgage lender), our valuations resulted in an LVR of 63.68%.

Monies were remitted directly to the tax office.

What ASCF does differently

ASCF assists clients in responding to ever changing market circumstances by creating products that cater to the needs of our customers.

Market Update

February marked a shift in Australia’s housing market, with national home values rising 0.3%, ending a three-month downturn. Gains were widespread, with Melbourne and Hobart leading at +0.4%, while regional markets continued to outperform, rising 0.4% for the month and 1.0% over the quarter.

This renewed momentum aligns with improving buyer sentiment, supported by tighter housing supply and a slowdown in new listings, which remain 4.7% lower year-on-year. Auction clearance rates have also strengthened, reflecting growing confidence in the market.

While affordability remains a challenge, supply constraints and positive sentiment could support continued price growth in the coming months. Investors monitoring market trends should note the shifting dynamics, particularly in premium housing markets, which have historically been the first to respond to changing economic conditions.

Property Values
as at 28th of February 2025

What rising property price trends are revealing

For investors, the modest drop in interest rates serves to signal market stability and clearer future direction in the near to medium term, helping to remove any destabilising fears of rapidly escalating interest rates.

Source: Australian Financial Review

Australians make a record median profit reselling their property

CoreLogic’s Head of Research Eliza Owen said: “Despite mixed market conditions, declining capital growth and lower clearance rates, Australian property continues to deliver strong profitability.”

Source: Corelogic

As expected, the RBA cut rates this month by 0.25% to 4.1%, with all the major banks passing on the rate cut in full.

Employment remains steady, with the jobless rate increasing slightly from 4% in December to 4.1% in January, while wage growth remained subdued, recording a modest 0.7% increase for the December quarter.

Core inflation is expected to ease further this quarter, from 3.2% in the December quarter to below 3%, leaving the burning question of how deep the RBA will cut rates in 2025.

With wage growth likely to return to historical averages of around 2.4% over the medium term, after peaking at 4.2% in 2023, this should provide the confidence the RBA needs to continue lowering rates.

Most economists expect the RBA to reduce rates by a further 0.25% by May, with the possibility of an earlier cut in April. Overall, rates are now expected to fall from their peak of 4.35% to 3.6% by year-end, a total decline of 0.75% from the peak.

Further rate cuts will be data-dependent, though some analysts are debating what the RBA’s neutral rate should be, particularly given pre-pandemic estimates placed it at around 2%.

Consumer confidence is likely to lift as interest rates come down, and residential property prices are expected to remain buoyant throughout 2025. Any downturn is likely to be shallow, with transaction volumes increasing.

While the RBA cash rate has dropped, our term investment rates remain unchanged, meaning investors considering one of our pooled fund investments may wish to act now to secure the targeted rates currently on offer.

Our ASCF High Yield Fund is currently paying a targeted distribution rate of 7.75% per annum on a 12-month fixed-term investment, meaning your targeted rate of return will not change during the investment term, with interest paid monthly.

ASCF Current Targeted Distribution Rates

ASCF Premium Capital Fund

6 Months	12 Months	18 Months	24 Months
6.10%	6.25%	6.75%	6.30%

ASCF Private Fund

3 Months	6 Months	12 Months	24 Months
8.19%	8.39%	8.59%	8.49%

In January, loans and inquiry levels were steady, with $10,572,500.00 in new loans settled.

The unit price across all three of our retail funds remains stable at $1.00 per unit.

All monthly distributions have been paid in full for the month of January.

Lending Activity Update

Quarterly Loan Settlements
as at 31st of January 2025

Current Loans by Fund Source
as at 31st of January 2025

Current Loans Geography
as at 31st of January 2025

Why Invest with ASCF?

Maximise your investment potential with mortgage funds in 2025

Why Consider a Set-Rate Pooled Mortgage Fund?

With the RBA having now cut rates, it’s worth considering how set-rate investments compare to variable-rate options in a changing market.

Mortgage funds can provide a structured investment approach, but choosing between a set-rate pooled mortgage fund and a variable-rate investment can affect financial outcomes.

A set-rate pooled mortgage fund provides a fixed rate for the agreed term, offering more consistency than variable-rate products, which may fluctuate with market conditions.

Key Features of a Set-Rate Pooled Mortgage Fund:

✔ Fixed rate for stability – Your rate is set for the agreed term, providing clarity on expected earnings.*
✔ Less exposure to rate changes – Variable-rate investments fluctuate with interest rates, while set-rate funds are designed for consistency during the term.
✔ Predictable cash flow – Can be beneficial for investors seeking more certainty over their investment timeframe.

ASCF’s set-rate investment options are available for 3, 6, 12, or 24-month terms, designed to provide stability over the agreed period, subject to fund performance. Like all investments, mortgage funds carry risks that should be considered alongside potential benefits.

Want to learn more? Contact us to explore your investment options.

Important information: At ASCF, we’re here to help you invest on your terms. Since inception, all investors have received their targeted distribution rate monthly and all redemption requests have been paid on time and in full, however past performance is not indicative of future performance. Distributions are not guaranteed nor a forecast. Lower than expected returns may be achieved. Investment in the Funds is not a bank deposit and investors risk losing some or all of their capital. Withdrawal rights are subject to liquidity and may be delayed or suspended. Read the PDS and TMD, available from our website.

Get in touch today!

An Interesting Transaction

Problem:

A valued AFG broker contacted ASCF seeking urgent funding for a client who needed to meet the settlement date for land purchased off the plan 12 months ago. The client believed he had finance approved, but his lender required several weeks to review the approval and finalise the transaction. With only seven days left to settle, the client risked losing his deposit and missing out on the valuation uplift of the land lot.

Solution:

The broker acted swiftly and provided ASCF with all the required documentation the very next day. ASCF issued a letter of offer that same day, which the borrower promptly executed, allowing us to order documents immediately. Given that the funds were for purchasing property under a company name and the borrower was experienced, ASCF agreed to waive legal advice.

The customer signed electronically via video link (acceptable in QLD, Victoria, and New South Wales) on the same day as settlement.

To facilitate the loan, the customer provided an existing unencumbered property in the company name. This allowed ASCF to rely on the contract price of the purchased land and a desktop valuation of the additional property, confirming an LVR of 48.55%.

ASCF provided a six-month loan of $385,000 at 10.26% p.a., enabling the customer to complete settlement on his property in Branyan instead of forfeiting his deposit and the valuation uplift.

What ASCF does differently

ASCF specialises in urgent funding for a wide range of purposes. We have developed systems, procedures, and a strong network of partners to facilitate short-term loans efficiently while safeguarding our investors’ interests.

Market Update

National home values remained steady in January, with capital cities dragging down the overall result. In contrast, regional markets hit new record highs, rising 0.4% – a key trend for investors looking at market resilience.

Melbourne (-0.6%), the ACT (-0.5%), and Sydney (-0.4%) led declines, while Brisbane and Perth maintained growth, though momentum is clearly slowing.

Adelaide continued its strong performance, leading capital city gains with 4.8% growth over the past six months. Perth, once the fastest-growing market, has cooled significantly, with growth slowing from 7.1% in mid-2024 to just 1.0% over the past three months.

Despite this, regional markets remain a bright spot, benefitting from migration trends, affordability, and evolving work patterns. While growth has softened, regional areas have consistently outperformed the capitals.

With the RBA’s recent rate cut, borrowing power may improve, but affordability constraints, slowing population growth, and housing supply shortages remain challenges. For investors, the outlook remains stable, with conditions pointing to measured market adjustments.

Property Values
as at 31st of January 2025

How the rate cut is shifting the market 

The latest rate cut is already reshaping buyer demand, unlocking new suburbs and boosting auction results. But how long will this momentum last?

Source: Australian Financial Review

What’s shaking up the housing market in 2025? Rate relief: RBA cuts the cash rate by 25 basis points

After the most aggressive rate hiking cycle on record, the RBA has reduced the cash rate from a thirteen-year high of 4.35% to 4.1%.

Source: Corelogic

As we step into 2025, it’s important to reflect on the recent market trends and how they may shape your investments with ASCF moving forward.

In Australia, the Reserve Bank has held interest rates steady to manage inflation, keeping lending conditions tight. 

Moving forward we expect the RBA to reduce rates by 0.25% in February followed by a further 0.25% by June lowering the cash rate to 3.85%. 

Any further reductions in late 2025 will remain data dependant but with the December 2024 quarter core inflation expected to be close to within the RBA range of 2% to 3% we believe employment data will determine whether further rate cuts eventuate.

At this stage ASCF’s internal view is that we are unlikely to see more than two rate cuts from the RBA in 2025 of 0.25% each however we consider this sufficient to cushion the property market from any sort of deterioration in pricing.

Whilst a weaker Australian dollar heading into 2025 will support exports, it will also drive investment into the county in particular into property from overseas investors.

Imports and the cost of construction materials may increase slightly but we expect wage growth to remain subdued which will bring stability to to construction prices.

Overall we are confident 2025 will be a positive year for the Australian economy driven by lower interest rates, steady employment and and stable inflation all of which will underpin residential property prices.

ASCF Current Targeted Distribution Rates

ASCF Premium Capital Fund

6 Months	12 Months	18 Months	24 Months
6.10%	6.25%	6.75%	6.30%

ASCF Private Fund

3 Months	6 Months	12 Months	24 Months
8.19%	8.39%	8.59%	8.49%

In December, loans and inquiry levels were steady, with $19,096,656.00 in new loan originations settled.

The unit price across all three of our retail funds remains stable at $1.00 per unit.

All monthly distributions have been paid in full for the month of December.

Lending Activity Update

Quarterly Loan Settlements
as at 31st of December 2024

Current Loans by Fund Source
as at 31st of December 2024

Current Loans Geography
as at 31st of December 2024

Why Invest with ASCF?

Maximise your investment potential with mortgage funds in 2025

Looking for a structured way to diversify your portfolio in 2025? Pooled mortgage funds provide access to property-backed investments without the responsibilities of managing property directly.

At ASCF, investor funds are combined and lent as secured property loans on residential and commercial properties. Investors receive regular income distributions from the interest and fees paid by borrowers.

Why choose ASCF mortgage funds?

• Consistent income potential: Designed to deliver regular monthly distributions.
• Diversified risk: Investments are spread across multiple secured loans.
• Expert management: Our experienced team carefully manages every loan.
• Simple property exposure: No large deposits or property management required.

ASCF’s pooled mortgage funds offer professionally managed access to property-backed investments designed to generate regular income distributions. 

Ready to learn more? Contact us today or visit our website to explore how ASCF can support your investment goals.

Disclaimer: At ASCF, we’re here to help you invest on your terms. Since inception, all investors have received their targeted distribution rate monthly and all redemption requests have been paid on time and in full, however past performance is not indicative of future performance. Distributions are not guaranteed nor a forecast. Lower than expected returns may be achieved. Investment in the Funds is not a bank deposit and investors risk losing some or all of their capital. Withdrawal rights are subject to liquidity and may be delayed or suspended. Read the PDS and TMD, available from our website.

Get in touch today!

An Interesting Transaction

Problem:

A broker approached ASCF after their original lender failed to meet the settlement deadline. The property was an off-the-plan purchase, and the developer refused to grant an extension.

Solution:

ASCF quickly provided an urgent 1st mortgage to secure the borrower’s new home, preventing the loss of both the deposit and the property.

The loan totalled $420,000 on a six-month term at 10.95% p.a. with a 70% LVR.

Although the term was six months, the borrower successfully refinanced within two months. ASCF conducted a full serviceability check during the application process to ensure refinancing would be straightforward.

What ASCF does differently

ASCF is able to provide urgent funding where other lenders have let the borrowers down. ASCF can meet very pressing time frames which can help to avoid borrowers losing deposits and the ability to settle on their home, or an investment property.

Market Update

CoreLogic’s Home Value Index (HVI) recorded a 0.1% decline in December, the first national drop in nearly two years. This slight downturn capped a robust growth period from February 2023 to October 2024, where property values showed remarkable resilience despite high interest rates, cost of living pressures, and reduced borrowing capacity.

The national decline was mirrored in the quarterly figures, with values also falling 0.1%, signalling a shift in momentum. Five of the eight capitals recorded declines between July and December, although Adelaide and Perth continued to perform strongly. Adelaide overtook Perth as the best-performing market in the December quarter, with values rising 2.1% compared to Perth’s 1.9% and Brisbane’s 1.3%.

In annual terms, Australian home values rose 4.9% in 2024, adding approximately $38,000 to the median home value. The mid-sized capitals led the charge, with Perth (+19.1%), Adelaide (+13.1%), and Brisbane (+11.2%) achieving double-digit growth. However, Melbourne, Hobart, and the ACT recorded declines over the year, with values falling -3.0%, -0.6%, and -0.4%, respectively.

Looking ahead, as highlighted in our market update above, anticipated rate cuts in 2025 should help stabilise the market, while a weaker Australian dollar may attract international investment, particularly in property. Regional markets, which outperformed the capitals with a 6.0% annual growth, are expected to remain a bright spot, driven by strong performances in WA, SA, and QLD.

Property Values
as at 31st of December 2024

Thinking of buying a bigger home in 2025? 

With house prices softening in Sydney and Melbourne, buyers looking to upgrade could find great opportunities this year. Experts predict that expected interest rate cuts in 2025 will bring renewed confidence to the market, though competition is currently lower, giving upgraders a chance to secure their dream home before demand picks up.

Source: Australian Financial Review

What’s shaking up the housing market in 2025?

Lower interest rates, easing inflation, and slowing overseas migration are set to shape Australia’s housing market this year, with potential for mild recovery following a shallow downturn. Explore how economic shifts and lending policies could impact values, demand, and construction.

Source: Corelogic

As we wrap up 2024, the Australian economy shows signs of progress but remains delicately balanced. Inflation is easing, growth is slowing, and the labour market remains steady – all key factors shaping the financial landscape as we head into 2025.

The RBA maintained the cash rate at 4.35% last week and while headline inflation has fallen sharply, underlying inflation remains elevated at 3.5%, indicating persistent price pressures. GDP growth continues to be slow, registering only 0.3% for the September quarter, and the December quarter is expected to be similar or even lower.

Economic growth remains subdued, with household spending recovering more slowly than expected. However, the labour market continues to show resilience, with unemployment steady at 3.9% and wage growth easing.

We expect the RBA is now likely to lower rates at its next meeting in February by 0.25%, with rates likely to fall by 0.5% to 0.75% by mid 2025. The inflation data for the December quarter, which is set to be released at the end of January, will be crucial in determining the pace of these reductions.

The housing market, which started the year strong, has slowed its pace. While national home values have risen 5.5% over the last 12 months, affordability challenges, cost-of-living pressures, and elevated interest rates are now cooling the momentum. With more properties hitting the market and demand softening, 2025 presents an interesting mix of possibilities. Easing inflation and potential rate cuts is however expected to rejuvenate buyer confidence.

In this evolving environment, ASCF remains committed to offering tailored opportunities to help you achieve your financial goals. For more insights, contact our team today.

As this is our final newsletter for 2024, we want to thank you for being part of our year and wish you a Merry Christmas and Happy New Year. 

ASCF Current Targeted Distribution Rates

ASCF Premium Capital Fund

6 Months	12 Months	18 Months	24 Months
6.10%	6.25%	6.75%	6.30%

ASCF Private Fund

3 Months	6 Months	12 Months	24 Months
8.19%	8.39%	8.59%	8.49%

In October, loans and inquiry levels were extremely strong, with $56,653,600.00 in new loan originations settled.

The unit price across all three of our retail funds remains stable at $1.00 per unit.

All monthly distributions have been paid in full for the month of November.

Lending Activity Update

Quarterly Loan Settlements
as at 30th of November 2024

Current Loans by Fund Source
as at 30th of November 2024

Current Loans Geography
as at 30th of November 2024

Why Invest with ASCF?

Why a pooled mortgage fund might be your perfect investment

Recently, I’ve noticed increased interest from property investors who are either disappointed with their net returns or seeking alternatives to the challenges associated with managing investment properties.

Investing in property can be a pathway to growing wealth, but it comes with significant demands. From large deposits to managing tenants, property ownership requires time, effort, and capital. A pooled mortgage fund offers a streamlined alternative. Here’s why:

Steady and predictable returns

Pooled mortgage funds are designed to deliver consistent returns. Unlike direct property investment, which is influenced by market fluctuations and vacancies, pooled funds diversify risk and aim for stability.

No property management hassles
Rental properties often come with the need to handle tenants, maintenance issues, and management costs. Pooled mortgage funds eliminate these responsibilities, letting you enjoy potential returns without the associated stress.

No large deposit required
Property purchases often require a significant deposit, making them less accessible for many investors. Pooled funds typically allow you to invest with a much lower upfront commitment, offering access to the property market without the need for substantial capital.

Diversified investment risk
Investing in a single property concentrates your risk in one asset. Pooled mortgage funds spread your investment across multiple loans secured by property, helping to reduce the impact of any market downturns.

Improved liquidity
Unlike property, which can take time to sell and may depend on market conditions, pooled mortgage funds often provide greater liquidity, enabling you to access your funds at the end of a specified term.

Professional fund management
ASCF pooled mortgage funds are managed by an experienced team that oversees loan assessments, approvals, and repayments. Their expertise ensures the portfolio is managed prudently, letting you focus on your financial goals.

Investing should be simple, transparent, and effective. Our pooled mortgage funds provide access to the benefits of property-related investments while addressing the challenges associated with direct ownership. If you’d like to learn more, feel free to contact us.

Disclaimer: At ASCF, we’re here to help you invest on your terms. Since inception, all investors have received their targeted distribution rate monthly and all redemption requests have been paid on time and in full, however past performance is not indicative of future performance. Distributions are not guaranteed nor a forecast. Lower than expected returns may be achieved. Investment in the Funds is not a bank deposit and investors risk losing some or all of their capital. Withdrawal rights are subject to liquidity and may be delayed or suspended. Read the PDS and TMD, available from our website.

Get in touch today!

An Interesting Transaction

Problem:

A couple from Burpengary, QLD, was struggling under the weight of the escalating cost-of-living crisis. Falling behind on mortgage payments, council rates, and water bills, they had turned to multiple consumer credit providers to supplement their income, which only exacerbated their financial difficulties.

Ultimately, they decided to list their home for sale, aiming to downsize to a more manageable mortgage and achieve a less stressful, sustainable lifestyle.

Solution:

ASCF provided a debt consolidation solution, along with additional funds, enabling the couple to prepare their property for sale and maximise its sale price. This proactive approach prevented their lender from foreclosing and auctioning the property under mortgagee-in-possession conditions. We offered a 5-month term at 11.95% p.a., giving the customer sufficient time to secure a sale and settle the contract. An external valuation confirmed the LVR at 64.10%.

By consolidating all debts, the customer satisfied their credit obligations and ended the harassment from multiple creditors, allowing them to focus on preparing the property for sale. Shortly after our drawdown, the customer secured a buyer, but had to wait 90 days for settlement to complete. This month, the sale settlement was finalised, and ASCF rebated the customer 2 months of retained interest at settlement.

What ASCF does differently

By taking the time to understand what is important to customers, ASCF can structure a financing solution that meets the customers goals and objectives even when that goal is alleviating mental anguish.

Market Update

November marked the 22^nd consecutive month of growth for CoreLogic’s national Home Value Index, increasing by just 0.1%. This was largely driven by the continued strong performance of Perth, Adelaide and Brisbane, increasing by 1.1%, 0.8% and 0.6% respectively. Darwin and Canberra were the only other capital cities to see growth for the month, increasing by 0.2% and 0.1% respectively, whilst Melbourne, Sydney and Hobart all experienced reductions in property values, of 0.4%, 0.2% and 0.1% respectively.

Whilst monthly data is suggesting that the property market is starting to cool, the annual data remains positive, with all capital cities except for Melbourne (-2.3%), Hobart (-1.0%) and Canberra (-0.1%) achieving growth over the previous 12 months. Perth recorded an astonishing 21% increase over the past 12 months, followed by Adelaide and Brisbane with 14% and 12.1% respectively, whilst Sydney and Darwin also saw growth of 3.3% and 0.9% respectively, resulting in a 5.4% increase across the combined capitals, and a 6.0% increase across the combined regions for the year.

With the RBA opting to once again keep the cash rate on hold, expectations of when the first rate cut may occur continues to drift out. This will likely result in continued weakening of the property market in Melbourne, Sydney and Hobart, whilst the undersupply in Brisbane, Adelaide and Perth may continue to prop up national averages in the early parts of 2025.

Property Values
as at 4th of Nov 2024

Housing market at a turning point

Australia’s housing market is reaching a turning point, with high borrowing costs and affordability challenges dampening demand. National house prices are expected to decline for the first time in two years, with previously strong markets like Brisbane, Perth, and Adelaide also slowing. Economists anticipate further softening through early 2025, presenting opportunities for buyers as affordability improves. 

Source: Australian Financial Review

2024: A year of waning demand, rising supply and waiting for interest rates to fall

In the face of elevated interest rates and global uncertainty, the Australian housing market demonstrated surprising resilience throughout 2024 with the number of home sales increasing 8% on the previous year, according to CoreLogic’s Best of the Best report for 2024.

Source: Corelogic

Investors had plenty to unpack in October, from key economic updates to global market shifts.

Domestically, the Reserve Bank of Australia (RBA) continues its focus on reducing inflation, holding rates steady at 4.35% in November. Inflation for services remains high at 5%, and the RBA is now unlikely to cut rates until early 2025. The December meeting will provide further insights into how the RBA views the economic outlook however at this stage we expect the February meeting of the RBA to be in play in terms of a 0.25% reduction to the official cash rate.

Globally, central banks are easing monetary policies, with rate cuts from the US Federal Reserve and European Central Bank. These changes, alongside the US election, may influence trade, currencies, and markets — factors Australian investors should monitor heading into 2025.

Australia’s labour market remains robust, with unemployment steady at 4.1%. Employment and hours worked increased slightly, reflecting resilience despite rising living costs. Consumer spending held firm, with the CBA Household Spending Insights Index rising 0.8% in October, supported by recreation and household goods.

In the housing market, CoreLogic reported a 0.3% rise in national property values for October, marking 21 consecutive months of growth. However, Sydney and Melbourne recorded slight declines, while Perth and Adelaide led with strong gains.

As 2024 draws to a close, Australia’s “higher for longer” interest rate environment presents both challenges and opportunities. Investors may want to assess how these dynamics align with their strategies for the year ahead.

For more insights on current market trends or ASCF’s investment offerings, reach out to our team today.

ASCF Current Targeted Distribution Rates

ASCF Premium Capital Fund

6 Months	12 Months	18 Months	24 Months
6.10%	6.25%	6.75%	6.30%

ASCF Private Fund

3 Months	6 Months	12 Months	24 Months
8.19%	8.39%	8.59%	8.49%

In October, loans and inquiry levels were steady, with $8,430,678.00 in new loan originations settled.

The unit price across all three of our retail funds remains stable at $1.00 per unit.

All monthly distributions have been paid in full for the month of October.

Lending Activity Update

Quarterly Loan Settlements
as at 31st of October 2024

Current Loans by Fund Source
as at 31st of October 2024

Current Loans Geography
as at 31st of October 2024

Why Invest with ASCF?

Flexible investment options with ASCF mortgage funds

At ASCF, we provide flexible mortgage funds tailored to meet diverse investment needs, whether you’re investing personally, through a company, or within an SMSF. Choose from three fund options and four commitment terms to match your goals.

Three mortgage funds for your needs

Our funds vary by risk tolerance, returns, and investment term, with options like spread protection and second mortgages. Each fund is audited yearly with all fund assets held by an independent custodian.

Flexible terms for every investor

Pick a term that fits your timeline:

1. 3 Months  –  Great for those testing the waters in investing or seeking short-term returns without a long commitment.
2. 6 Months  –  A middle ground for investors who want to a better return but may still need access in the medium term.
3. 12 Months  – Ideal for investors who can commit a full year and prefer a higher potential return for locking in their funds. This is our current highest paying term.
4. 24 Months – Lock in today’s rates for longer-term stability.

Need extra flexibility? Mix and match terms and funds across accounts. Reach out to learn more today!

At ASCF, we’re here to help you invest on your terms. Since inception, all investors have received their targeted distribution rate monthly and all redemption requests have been paid on time and in full, however past performance is not indicative of future performance. Distributions are not guaranteed nor a forecast. Lower than expected returns may be achieved. Investment in the Funds is not a bank deposit and investors risk losing some or all of their capital. Withdrawal rights are subject to liquidity and may be delayed or suspended. Read the PDS and TMD, available from our website.

Get in touch today!

An Interesting Transaction

Problem:

A broker approached ASCF for urgent financing to help his client settle on the purchase of a real estate rent roll business. Just 48 hours before settlement, the client’s initial financier backed out, leaving him in need of funds to complete the transaction.

Solution:

To meet this urgent need, the client offered his primary residence as collateral to access the required $1,000,000. ASCF’s team moved quickly, conducting thorough due diligence based on a real estate agent’s appraisal of the property, which was purchased for $5,200,000 in 2018.

With an assessed LVR of 9.09%, ASCF provided a 1st mortgage 3-month term loan at an interest rate of 8.75% per annum, allowing the client to meet his funding commitment in time.

What ASCF Does Differently:

When the client informed the broker of his need for financing within 48 hours, the broker immediately thought of ASCF. Why? Because of our three core differentiators:

Transparency in delivery – We offer clear communication and straightforward processes.

Confidence in delivery – We provide a reliable service when time is critical.

Speed of delivery – Our team understands the importance of a quick turnaround.

Market Update

Australian residential property prices continued to rise for the 21^st consecutive month with a 0.3% increase, but signs of easing continue with Darwin, Canberra, Melbourne and now Sydney all experiencing a decline in value according to CoreLogic’s National Home Value Index, with losses of 1%, 0.3%, 0.2% and 0.1% respectively. Whilst this demonstrates that it is not all smooth sailing in the Australian property market, Brisbane, Hobart, Adelaide and especially Perth continued to perform strongly with further monthly increases of 0.7%, 0.8%, 1.1% and 1.4% respectively. Whilst the national capitals only saw a 0.2% increase for the month, the combined regionals are still performing strongly with a 0.6% monthly increase.

This new monthly data with more capitals and regions beginning to see a reduction or easing in prices, has impacted quarterly data now showing that Darwin, Canberra, Melbourne and Hobart have experienced losses for the quarter (1.3%, 0.9%, 0.8% and 0.1% respectively) whilst Sydney has now only seen 0.1% quarterly growth. Brisbane, Adelaide and Perth have however continued to see significant growth for the quarter, with 2.4%, 3.7% and 4.1% respectively.

As we head into the holiday season, and with the RBA remaining hesitant to reduce interest rates, it is expected to continue to see easing amongst the Sydney, Melbourne, Canberra, Hobart and Darwin markets, however the undersupply of property within Brisbane, Adelaide and Perth is likely going to see continued growth despite interest rate pressure.

Property Values
as at 4th of Nov 2024

Housing market on the cusp of another boom

Australia’s housing market shows signs of potential growth as experts anticipate that rate cuts in 2025 could drive higher demand, especially in Sydney, Brisbane, Adelaide, and Perth. Melbourne’s market remains relatively affordable, but with possible rate changes, investor interest may increase across major cities. Keep a close watch — 2025 could open up new opportunities in the property market.

Source: Australian Financial Review

One year on – cash rate holds at 4.35%

The RBA has held the cash rate steady at 4.35% for another month, citing high underlying inflation as the reason for not yet reducing rates. Despite headline inflation falling within target, the RBA remains cautious, aiming to ensure inflation returns to the midpoint of the target range.

While borrowers might be eager for a rate cut, experts suggest patience, with potential rate reductions anticipated in early 2025.

Source: Broker Daily

As we approach the end of October, it’s a good time to look back at September, a month marked by steady employment figures and shifts in economic indicators that could shape the coming months.

Last week’s unemployment data remained steady at 4.1% for September, but the participation rate hit a record high of 67.2%. With this strong labour market, most economists now expect the Reserve Bank of Australia is unlikely to lower interest rates until early next year.

Interestingly, the CBA Household Spending Insights (HSI) Index declined by 0.7% in September, indicating a notable slowdown in consumer spending. The index, which tracks 30% of consumer transactions nationwide, was up 1.6% in August but dropped on an annualised basis from 3.7% in August to 2.1% in September.

Many advanced economies, including the US, have already cut rates. Although the RBA didn’t raise rates to the same extent as other countries, Australian mortgage rates are still higher than in many overseas markets, particularly in the UK and Canada, and are in line with those in New Zealand, which has also cut rates.

While the steady unemployment rate makes it more difficult for the RBA to reduce official rates at its November or December meetings, there is still, in our view, a strong chance that the September quarter CPI will be softer than expected, which could put rate cuts back on the agenda for both meetings before the year ends.

The rate of growth in residential property prices across the country is also easing, as the supply of listings increases. While some economists argue we are entering a buyer’s market, we expect this trend to be short-lived. The official cash rate is likely to be closer to 3% than 4% by this time next year, and the rise in listings may partly be driven by the longer-than-expected timeline for the RBA to lower rates.

ABS data for total dwelling approvals, released earlier this month for August, showed a 6.1% decline, down to 13,991 approvals—well below what’s needed to meet demand and far short of the government’s target of 20,000 new homes per month over the next five years.

As a result, the structural undersupply of housing across the country is unlikely to improve anytime soon. While growth in property price growth may stall until rates decrease, we believe the market will remain well-supported as we head into 2025.

ASCF Current Targeted Distribution Rates

ASCF Premium Capital Fund

6 Months	12 Months	18 Months	24 Months
6.10%	6.25%	6.75%	6.30%

ASCF Private Fund

3 Months	6 Months	12 Months	24 Months
8.19%	8.39%	8.59%	8.49%

In September, loans and inquiry levels were steady, with $6,034,000.00 in new loan originations settled.

The unit price across all three of our retail funds remains stable at $1.00 per unit.

All monthly distributions have been paid in full for the month of September.

Lending Activity Update

Quarterly Loan Settlements
as at 30th of September 2024

Current Loans by Fund Source
as at 30th of September 2024

Current Loans Geography
as at 30th of September 2024

Why Invest with ASCF?

If you’ve been considering investing with ASCF, now might be a great time. With economists signalling the likelihood of the Reserve Bank of Australia cutting interest rates by February 2025, several key factors make this an opportune moment to invest.

Although there has been mention of the RBA dropping rates for some time, there is now a stronger feeling we are getting to that point.

When interest rates are dropping, variable-rate investments can create uncertainty. Our pooled mortgage funds, however, offer set targeted rates for the term chosen. This provides a sense of security—you have confidence in what your income will be, regardless of how the market fluctuates. While other investors might face reduced returns as variable rates decline, you’ll enjoy the peace of mind that comes with targeted, consistent payments.

As interest rates fall, traditional variable rate investments typically reduce their rates accordingly. Our pooled mortgage funds provide an attractive alternative, offering higher yields than most variable options. By locking in a competitive target rate now, you’ll likely outperform variable rate products if interest rates drop during the term of your investment.

Whilst an investment in our fund is not a bank term deposit and past performance is not indicative of future performance, we believe our track record over the past 8 years speaks for itself. 

Interested in learning more?

If you have been considering investing in one of our funds or making an additional investment, please reach out to Nick Alcock on 0459 835 335 or email at [email protected]

Get in touch today!

An Interesting Transaction

Problem:

A young family with three children were living in a small two-bedroom unit in inner-city Sydney and needed to purchased a new property to accomodate their growing needs.

Solution:

ASCF provided the family with a bridging loan across both properties, allowing them to secure the purchase of their new house. The unit was listed on the market within a week of them moving out.

ASCF provided a total loan of $1,069,500 across the two properties on a four-month term at a rate of 13.75% per annum and peak LVR of 54.71%.

What ASCF Does Differently:

ASCF is able to provide bridging loans to borrowers for short term needs which traditional lenders avoid due to the short term nature of the loan. 

Market Update

For the 20th consecutive month, headline national home values increased by a modest 0.4%, signalling that the strong momentum is beginning to leave the market. This is demonstrated by housing values rising just 1% for the September quarter, the lowest over a rolling three-month period since March 2023. Perth continues to be the strongest performer, growing by 1.6% for the month, followed by Adelaide and Brisbane with increases of 1.3% and 0.9%, respectively. Sydney and Darwin were the only other markets to see increases, rising by 0.2% and 0.1% for the month, while Melbourne, Canberra, and Hobart all saw housing values ease, with decreases of 0.1%, 0.3%, and 0.4%, respectively.

Property Values
as at 30th of September 2024

Rate hold slows buyers, but investor confidence remains strong

Profits from home sales nationwide climbed to a record high of $285,000 on average in the June quarter.

The RBA’s decision to keep interest rates steady has left many homebuyers waiting, as borrowing power remains limited. While a future rate cut is anticipated, it won’t significantly boost demand until it happens. Meanwhile, investors are showing renewed interest, particularly in Melbourne, where the market is stabilising despite an increase in listings. A rate cut could lead to a faster recovery than expected.

Source: Australian Financial Review

Australia’s housing market soars to record $11 trillion

Australia’s housing market hit a record $11 trillion in September, with home values rising 6.7% over the past year, adding $900 billion in wealth.

Despite higher interest rates, new listings and strong investor activity continue to drive the market. Over the past decade, house prices surged by 85.9% nationwide, with suburbs in Sydney, Brisbane, and Melbourne leading long-term growth.

While price growth is expected to slow, strong demand and new housing developments will continue to support the market.

Source: Australian Financial Review