Think Tank Property Finance expects 2012 to yield more positive conditions for commercial property.

Following RBA interest rate reductions late last year, Think Tank revealed the lender was seeing a 'meaningful increase' in activity towards at the end of 2011 that would likely continue this year.

Part of the reason for the revival was the interest rate environment following Reserve Bank rate cuts.

"Recent RBA rate cuts will provide further impetus to this trend as the costs of borrowing reduce,
improving net rates of return for commercial property investors, and reducing the cost of ownership for
owner-occupiers making owning a more compelling option over renting.

"With the outlook for monetary policy now very much on the neutral to easing side, conditions are positive for the economy and commercial property," Think Tank said in a property update.

Think Tank said a quieter mid-year for commercial property in 2011 had built up latent demand, that would translate into more property changing hands and increased demand for finance this year.

While concerned about global market disruption, Think Tank does not believe a 'tipping point' will be reached that would cause the current pick up to suffer an abrupt halt as it flowed through to Australia.

"Our indicators point to a positive and potentially strong year ahead for this sector."