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No in-person auctions or inspections in Victoria until October, premier announces

By Shaye Williams

The real estate industry has savaged Daniel Andrews’ roadmap out of coronavirus lockdown restrictions, saying it could operate safely.

But other experts have been more understanding of the necessity of a slow return to normal.

On-site auctions can’t resume in Victoria until at least October according to the state government’s guidelines on easing of coronavirus restrictions released on Sunday.

The state’s re-opening has been delayed due to unacceptably high coronavirus case numbers, Premier Daniel Andrews said.

Private inspection and on-site auctions subject to attendance limits won’t be allowed until the third step out of lockdown, which due to begin on October 26 or until cases are lower than five over a long-term average, or lower than five with an unknown source.

Some activities will be allowed in the second step due to begin next week, which will include things can’t be done remotely for the commencement or the end of a lease, such as removalists, or settlements if they need to be done in person.

In the last step, the real estate industry will be closer to normal, with no limit on auction attendance and it appears open homes would be allowed.

The construction industry will have caps on the number of workers and sites visited across major projects, private home renovations and new developments which will be lifted incrementally as the restrictions will continue to ease.

In regional Victoria, the second step begins on September 13 and will mean private inspections can resume. But on-site auctions with attendance limits won’t be allowed until the third step.

The Real Estate Institute of Victoria lashed the restriction roadmap, labelling the new plan a decision to keep the property market shut for an uncertain period of time.

Chief executive Gil King said agents should be allowed to run private inspections in step two.

“Private inspections are far safer than going to the supermarket,” he said. “No one watches me there and wipes down the Corn Flakes packet that I pick up and then return to the shelf.”

The REIV was also unhappy with the relaxation of restrictions in regional Victoria, saying that they should be wound back further on September 13.

Charter Keck Cramer research director Angie Zigomanis said that while real estate activity contributes heavily to state revenue through taxes like stamp duty, he could understand why the government was apprehensive to allow it to return to normal operation.

“The government is more willing to bear the loss now than bear continued losses down the track,” he said. “It’s not about stamp duty revenue. It’s about everything really. It’s about the whole economy.

“If you can get the economy back to normal later or as close to normal that’s going to be a better result than opening and shutting the economy again and again.”

REIV president Leah Calnan said property owners were suffering, not just agents.

“These decisions compound the financial stress on Victorians and the Victorian economy and do nothing to help those suffering during these difficult times,” she said.

But the Property Council struck a more conciliatory tone; its group executive, policy, Mike Zorbas said the government’s roadmap was welcomed and supported.

“Victorians simply cannot afford an endless cycle of easing and tightening restrictions on the industry, and we must all play our part and be vigilant about safe reopening at every stage. The economy won’t recover as long as people who should be in work boots and hi-vis are at home in tracksuit pants,” he said.

“We also seek the acceleration of the forecast economic stimulus where it will create the most jobs. It takes months for construction and real estate businesses to access government relief schemes; stimulus measures need to be brought forward immediately.”

Mr Zigomanis said that the continued inability to sell may cause some financial distress for property owners, but said it may be offset by the higher than normal levels of saving seen during the pandemic.

“It’s very opaque how many households have been struggling,” he said. “The banks aren’t suspending payments here and there, they’re adding them to the principal of the loan.

“In an ideal world [struggling property owners] would try to cut their losses but they can’t even sell at the moment.”

Real estate businesses would be likely to suffer through the rest of the lockdown period, but may be rewarded with strong market conditions when they’re allowed to reopen, Mr Zigomanis said.

“There will be pent-up demand when things open up,” he said. “We’ll see a lot of demand and competition for those homes that come online when it does happen.”

In stage four lockdown, property inspections of any kind are banned, including for potential purchases, rentals, including routine inspections, and appraisals.

Some property mainstays like auctions have ground to a halt. After dwindling auction numbers through the course of the lockdown, they have now reached near zero as the city-wide shutdown eclipses the typical four-week auction campaign.

This means buyers would almost always have to buy sight unseen, which few have appeared to do.

This weekend, just one auction was called in greater Melbourne, and only nine are forecast for next Saturday.

Restrictions were first introduced in late March which included a ban on on-site auctions, but a loosening of rules in May meant they were allowed to go ahead with just 10 bidders and spectators in attendance, which was later raised to 20.

They were banned altogether again when stage four was enacted in August.

Over the past month, Melbourne recorded a 1.2 per cent house price fall, the highest of all Australian capitals, according to CoreLogic.

The state government also extended its eviction ban and rental support until the end of March next year this week, welcomed by renter advocacy groups but frustrating the real estate lobby.

Source: https://www.domain.com.au

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