25 May 2020

Relaxed regulations re-open real estate, but risks remain

| Sharon Kelley
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Travis Doherty and Tim Overall

Village CEO Travis Doherty and Queanbeyan Mayor Tim Overall. Photo: George Tsotsos.

The real estate industry is re-opening doors after the ACT, NSW and Victorian governments announced a relaxation of COVID-19 lockdown measures.

NSW real estate agencies are now able to hold open homes, auctions and open display units with social distancing measures in place and provision for hand sanitiser onsite. Agents in the ACT and Victoria are able to do the same but have limits on the number of people attending.

Village Building Company CEO Travis Doherty says his company’s display homes and apartments are now open again, and the number of visitors without appointments is directly correlated to each state and territory’s restrictions.

“In NSW we’re seeing a steady number of people returning to look at our display units,” he said, “and in Victoria, we’ve had two sales this week since Premier Andrews came out on Monday to say we could re-open there. But I can see some real challenges emerging for developers.

“Because we’re currently completing projects that we sold off the plan up to two years ago, it’s difficult to know if we’ll be able to get enough buyers to purchase off the plan on new developments to start construction on time.

“People have lost their jobs, and the economy looks set for a major downturn. Although real estate prices haven’t dropped I think that’s because, generally speaking, supply has eased in line with demand and everyone appears to be holding their nerve. We can’t predict how long that will last,” he said.

A building development company must achieve a percentage of pre-sales off the plan to secure financing for a project. The COVID-19 lockdown may not affect current projects currently under construction but may mean that pre-sales for future developments are unachievable until unemployment levels drop, despite the need for more housing in almost every state and territory.

In the ACT and Victoria, only 10 people plus staff are allowed at auctions, open homes and display units at any time (Victoria will lift this limited to 20 from 1 June), while in NSW there are no limits on numbers as long as social distancing can be observed. Sales agents must record the names and contact details of all who attend any auction or open house to help with contact tracing if needed in Victoria, ACT and NSW.

“Everyone has been impacted by the COVID-19 pandemic and we’re no exception at The Village Building Company,” said Mr Doherty, who admits feeling the strain of uncertainty over the short to medium-term future of the industry.

“The problem is, we’re also looking at a housing market that needs more houses built,” he said. “The demand and supply equation comes into play too, and we need to make sure we’re in a strong position to be part of the solution.”

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