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Physical home inspections have been banned under stage four restrictions. Picture: Tim Carrafa
Property inspections will only be able to be conducted online under Melbourne’s tough stage four restrictions in a move experts say will essentially grind the market to a halt.
A post on Premier Daniel Andrews’ official Facebook page on Monday night listed “property and real estate” among businesses that will close for at least six weeks from 11.59pm Wednesday, with “online inspections and auctions permitted”.
A Victorian Government spokeswoman has confirmed this as correct, noting auctions will also need to shift online in regional Victorian property markets under its stage three lockdown. But private one-on-one inspections will still be allowed regionally.
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The post on Daniel Andrews’ Facebook page.
In a letter to REIV members sent about midday Tuesday, chief executive Gil King confirmed real estate offices in metropolitan Melbourne would be forced to close. But there was confusion about other restrictions, despite the premier’s social media post.
“We urge you to avoid assuming what will and won’t be allowed until the new directions are published,” Mr King wrote.
“We will advise you as soon as clear information is available.”
The REIV expected to be in discussions with government authorities until “late afternoon on Wednesday”.
REIV president Leah Calnan said it was “highly unlikely we’ll see sales transactions over the six weeks” due to the ban on physical inspections as “purchasers don’t buy properties from virtual tours”.
“I suspect properties will probably remain on the market, but I don’t anticipate we’ll see many new properties go to market in the six-week lockdown,” she said.
Ms Calnan said the organisation would push the government to reconsider the tough restriction, particularly in the rental space, as providing shelter should be considered an essential service.
“We’ve got tenants (impacted by COVID-19) moving out of properties from an affordability point of view, and therefore needing to inspect other properties,” she said.
“The impact is on many levels — not only financial impact to state’s economy, but also the inability to be able to provide accommodation across the state by selling or leasing.”
Realestate.com.au chief economist Nerida Conisbee said while homeowners could still sell their homes in the stage four lockdown, there would not be “as many sales because people don’t like to buy sight unseen”.
“This will be over and things will go back to normal. But for now, it’s going to lead to much lower activity … across building sites, across buying and selling property,” she said.
RT Edgar Inner West director Joanne Royston said the ban was a cruel blow to agents who had been working hard to follow COVID-19 hygiene and distancing requirements.
“We’ve been taking our hand wipes and sanitiser out (to properties), we’ve been masking up,” she said.
“We’re also trying not to enter the houses to eliminate too many people being inside. And we’re maintaining social distancing to make people feel more comfortable.”
An inspection conducted via the Gavl online platform earlier this year.
Barry Plant chief executive Mr McCarthy said after conflicting detail was shared by the government in the past 48 hours, “confusion reigns at the moment”. But he expected in-person inspections would be shut down.
“Some sales will be facilitated, where people are just negotiating and have already done inspections,” Mr McCarthy said.
“Others will be determined to buy before lockdown with the hopes of settling afterwards. And there will be some online auctions that will go ahead.
“But I think there will be a broader drop in listings.”
With limited supply to be available until at least September, those thinking of selling should still connect with agents, as there would be more properties for sale come spring, he said.
Marshall White Stonnington director Marcus Chiminello said the latest government restrictions were “as clear as mud”.
“In the event somebody wants to take a virtual inspection, will the agents be allowed to attend the home to film it?” Mr Chiminello said.
“And are our suppliers still allowed to attend properties to create the virtual inspection videos?”
Wakelin Property Advisory director Jarrod McCabe expected the stage four lockdown — which also placed the city under an 8pm-5am curfew and banned residents from travelling further than 5km from their homes — to bring “added tension” to the market and further thin out the prospective buyer pool.
But with the harsh restrictions set to end on September 13, he said there was hope the traditionally busy spring selling season could revive the market.
“It won’t be your traditional spring market — with interruptions like the AFL Grand Final and the Spring Racing Carnival (bringing down auction volumes) — there will be consistency,” Mr McCabe said.
“Hopefully supply will pick up once we can conduct public auctions again.”
The government briefly outlawed physical inspections of occupied homes in April, overturning the ban just a few days later after an impassioned campaign by Victoria’s real estate industry.
The Consumer Affairs Victoria website stated at the time that being able to conduct in-person inspections would make it impossible for “agents, prospective owners or tenants, and existing tenants to each comply with their legal requirements” to prevent the spread of COVID-19.
The real estate industry dubbed that ban “an overkill that will have incredible repercussions” for buyers, sellers, renters and agents.
Mr Andrews flagged further real estate announcements on Monday afternoon, noting his government was getting “specific advice” on whether people would be able to settle on property purchases and move house.
“I think the answer will be ‘yes’ if you’ve got a contract, an arrangement in place,” he said.
An extension of the residential and commercial eviction moratorium was also on the cards, while tradies will only be permitted into Melbourne homes for “emergency” works.
The construction industry will be allowed to continue operating at a scaled-back level.
-with Jack Boronovskis and Jayitri Smiles
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