Private credit market has lenders sweating

Stamford Capital's Debt Capital Markets survey has revealed that lenders are uneasy about the size and practices of Australia’s private credit market.

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The survey gauged the sentiment of 100 major banks, non-banks, and second-tier banks.

Stamford Capital said over the last few years, commercial borrowers have grown increasingly comfortable with private credit. Growing demand for fast and flexible finance has fuelled an explosion of private and non-bank lenders in the commercial real estate space.

Australia's private lending market has grown substantially, with assets under management rising from $57.1 billion in 2014 to $148.6 billion in last year, nearly tripling over the decade, according to ASIC.

Stamford Capital managing director Peter O'Connor said private credit has dominated market activity and accounts for around 17% of Australia’s commercial real estate debt.