Stage four lockdown: How Melbourne’s real estate industry will be impacted by Daniel Andrews’ roadmap for reopening

Victoria’s peak real estate body is advising its members to “refuse to negotiate rent reductions” with tenants in COVID-19 hardship until the state government engages in “genuine consultation” with the industry.

The hard-line stance comes after the government’s “roadmap for reopening” revealed physical inspections of Melbourne homes won’t be allowed again until at least October 26, essentially keeping the property market on ice well into its busiest selling season of the year.

Property players described Sunday as a “disastrous” and “grim day for real estate”, saying buyers and renters having the ability to set foot in the homes they’re interested in is crucial to the selling and leasing processes.

To reach that step, Victoria must record fewer than five daily cases over the two weeks prior to October 26.

The last step on the roadmap — to apply from November 23, given the state has no new cases for two weeks — will allow real estate to operate with “safety measures and record keeping”.

In the meantime, the government has confirmed only services related to property settlement and the commencement of or ending of a lease, including removalists, are allowed.

Real Estate Institute of Victoria president Leah Calnan labelled the roadmap “disastrous” for the selling and leasing sectors, and a “double whammy” following the extension of moratoriums on evictions and rent price hikes to March 28, announced on Friday.

Ms Calnan said the REIV would be “instructing our members to cease any negotiations with tenants in regards to rent reduction (and) advise tenants to make their own inquiries with Consumer Affairs Victoria”.

“We’ve continually communicated with government, they don’t listen,” she said

“This is not about making one party a victim, it’s trying to rebalance the rights for both landlords and tenants.”

Ms Calnan labelled the government’s land tax relief for landlords who agreed to reduce rents for hard-hit tenants “an insult (that) in most cases would be less than a week’s rent”.

Tenants Victoria chief executive Jennifer Beveridge said they were “really disappointed” the REIV had called on landlords to end negotiations with tenants.

“The scheme we have to seek a rent reduction relies on what is known as ‘good faith’ negotiations, that’s a fair-go system to assist both renters and landlords amid the huge challenge we are facing as a community,” Ms Beveridge said.

“At a time when all of us are bing told to stay at home, renters who’ve lost income and jobs are doing it really tough.”

The REIV is calling on government to allow private physical inspections of homes — attended by only the real estate agent and a single buyer or tenant, as is allowed in regional Victoria — to resume as soon as possible.

“Without inspections, buying and leasing cannot proceed, keeping many people out of appropriate shelter and pushing many vendors and investors to the brink,” the organisation said in a media release.

Ms Calnan added: “You’ve got people who need to buy because they’ve sold, and you have vendors who will be in financial hardship who have to sell.

“In the selling market, people are not going to hand over hundreds of thousands of dollars to purchase a property without seeing it first. That’s just crazy thinking.”

In-person inspections have been outlawed in Melbourne since stage four lockdown began in early August, with real estate agents, photographers, videographers and stylists banned alongside buyers from attending homes.

SQM managing director Louis Christopher said this had caused a “near entire freeze up” of the market, while buyer’s advocate Frank Valentic said it had “literally shut down the property market”.

Fellow buyer’s advocate Cate Bakos called Sunday a “grim day for real estate”, as it had kicked off “another seven weeks of not being able to transact or inspect”.

She said Victorian real estate professionals would be “absolutely bleeding” as a result.

“There are concerns about mental health out of this, there have been agencies shut down and their staff don’t have access to job keeper. We are asking some of these people to have another seven weeks, at least, of no income,” she said.

“There will be plenty who don’t see any money until January or February. These are people who have families and mortgages themselves.”

Describing the extension to the private inspections ban as a “big mistake”, Ms Bakos urged the government to look at ways the industry could be allowed to recommence the vital part of home sales.

Online auctions are set to continue well into spring. Pictured is EYS auctioneer Fabian Sanelli. Picture: Jay Town

Ms Bakos added buyers who were yet to sell their home and were on bridging finance would be “freaking out”. And those who had not qualified for a bridging loan would be losing their deposits, with almost all sales on hold until inspections could commence.

Despite this, she said vendors who did hang on for a sale in spring could see prices rise, as buyer demand built up over the coming weeks.

Ray White Werribee director Michelle Chick said home sellers had been doing their own photography and videos in a bid to keep sales moving under the stage four lockdown.

But while buyers were “quite open to” purchasing property via online auctions, “not being able to walk through that property first is something they are not open to”.

“If we can’t do private inspections, well then that’s certainly not going to end well,” she said.

Ms Chick said her agency was preparing up to 60 homes for sale this spring, all of them waiting for today’s announcements to make a decision.

Premier Daniel Andrews said on Sunday if Victoria opened too fast, there would be a “very high likelihood we are not really opening up at all”.

: We are just beginning a third wave, and we will be back in and out of restrictions … before

the end of the year,” he said.

“We have to take a steady and safe steps out of lockdown.”

-with Nathan Mawby

Source: www.realestate.com.au