The Australian Direct Property Investment Association (ADPIA) has supported the Government's initiative to establish a $4 billion lending fund.
Financed by the Government and the major banks, the fund would be used to finance commercial property should lenders withdraw from the market.
Debt has become a critical issue for the $60 billion direct property market, ADPIA president Linden Toll said.
Many traditional lenders are now out of the market due to capital constraints and the offshore banks are retreating home, he said.
"A measure to make funding available to Australian commercial property managers is therefore necessary to ensure they can secure debt and avoid a massive fire sale of commercial properties, which could create further distress for already battered investment markets," Toll said.
ADPIA will be working with the Treasury Department on how the funds can be used commercially.
"We will seek to advise on lending policies, process, review mechanisms and pricing to ensure the funds are applied in a commercial fashion so that fund managers can achieve their objectives," Toll said.
