Obviously, everyone is finding life different to what it has been in the past. “Unprecedented” is being thrown around a lot these days and most of the time it is quite correct. The property market is no different.
On Thursday last week the government announced a ban of all inspections for occupied properties for both leasing and sale. This virtually closed the property market as approx. 90% of all properties sold are occupied. Thankfully this was reversed yesterday and now, as long as social distancing rules are applied and Stay at Home Direction (SAHD) is followed, the real estate industry can continue to operate. (See the most current rules at the bottom of the page.)
People still need to buy and sell real estate. Everyone’s family unit will shrink and grow from time to time and the current Pandemic will not change that. There are many people who have already sold their home and are actively trying to purchase another one and conversely there are just as many who have purchased recently and now need to sell their existing home. Trying to close down the property market would be similar to trying to shut down the stock market – absolutely impossible!!
It will be much more difficult to buy and sell in the current market. Trying to ascertain what is on the market will also become more difficult as selling agents move into off market selling as a normal sales method to try to avoid large advertising costs for sellers unsure of the outcome of their campaign. When auction clearance rates are 70% – 80% with many more sold by private treaty negotiations, it is quite normal to spend upwards of 1% of the value of your property on advertising. Most of the time the property will be sold, and the advertising costs recouped by the sale. But if your chances of selling drop toward 50% or below then spending 1% of the value of your property ($10,000 on a $1m property sale) is not an easy decision to make.
Many sellers have asked agents to send out to their databases and contact buyer agents in order to negotiate a deal for their property. Without exceptional property knowledge, this will become exceedingly more difficult for buyers to manage the negotiations.
Within the past 10 days, the property market has gone through tremendous upheaval and everyone, buyers and sellers alike, have become extremely anxious. This will settle over the next couple of weeks and we will move into a new “normal” You will be able to buy and sell property during the next 6 months, but you will need some good advice.
Please do not hesitate to call, email or video chat if you are looking for any advice regarding buying, selling or leasing property in Melbourne.
Director, JPP Buyer Advocates
This is the current information available from Consumer Affairs Victoria
Inspections for lease and sale
Clause 11(3)(c) of the Stay at Home Direction (SAHD) allows a person to permit another person to enter their place of residence if it is necessary for the second person to enter the premises for the purpose of their work. Therefore, a person may permit an estate agent to enter the person’s place of residence to allow the estate agent to undertake their work related to the place of residence.
Clause 11(3)(c) of the SAHD also allows a person to permit another person to enter their place of residence if the second person is entering for the purposes of attending a private inspection of the premises for the purposes of a prospective sale or rental of the property.
Inspections of occupied properties
Private inspections of an occupied/tenanted residential property are permitted to be organised. An inspection is only permitted where an estate agent and one other person (the person for whom the inspection is organised by private appointment) are present at the premises.
An inspection where an estate agent, the prospective tenant/purchaser and a resident of the premises are all present is not permitted. In this case the resident of the premises will have to leave the premises, and should do so for a reason permitted under the SAHD, namely, to obtain necessary goods or services, for care and other compassionate reasons, to attend work or education or to exercise.
Those in isolation or quarantine should not leave their homes.
Inspections of vacant properties
Private inspections of a vacant residential property are permitted to be organised. An inspection is only permitted where an estate agent and one other person (the person for whom the inspection is organised by private appointment) are present at the premises.