The Property Council has warned that any reforms which seek to improve the attractiveness of the public market should not come at the expense of the private market.
The Australian Securities & Investments Commission’s is currently considering changes to the rules governing private lending and unlisted investments.
In its submission to the Australian Securities & Investments Commission’s review into the public and private marketplace, the Property Council said the property industry interacts closely with the private market.
“Increasingly we have seen private credit funds act as alternative lenders to the major banks, providing access to capital that is vital for the delivery of real estate projects, and providing for recapitalisation or transitional finance,” the peak industry body said in its submission.
“This is not to say the institutional banking sector is not also a critical partner for Australia’s property industry. As the cornerstone of the lending system, they provide a safe and stable partner in delivering many real estate projects across the country, as well as underpinning over $2 trillion in mortgages.
“The strength in Australia’s property sector lies not in the dominance of either the non-bank or institutional banking sectors, but rather their essential and complementary roles as part of a competitive lending market.
“Market forces have led to the growth of the private markets in Australia, reflective of a global shift in capital allocation, as well as developer and investor preferences.”
The Property Council said reforms to boost the public market’s appeal shouldn’t disadvantage the private market.
“This includes imposing public market governance standards on the private market, or further penalising private investment structures.
“We strongly advise ASIC to avoid any punitive action on private market participants in order to achieve a policy outcome for the public market.”