Even with Relaxed Restrictions, Victoria Real Estate Under Pressure

Earlier this month, the Premier of Victoria announced an important milestone in the battle to curb Covid in our region. More than seventy percent of eligible people in Victoria have now had their first dose of the vaccine, and this milestone has triggered the relaxation of some restrictions in the state, and in cities like Melbourne. All Melbournian’s and people of Victoria state wide are waiting with anticipation this week, with more ease of restrictions that are being embraced as we reach the eighty percent first dose vaccination milestone.

Thankfully, one of the restrictions that has been relaxed is the ban on in-person home inspections. This offers some relief to would-be home buyers and tenants as well as landlords, property sellers and real estate agents. We believe that the important work of peak industry associations such as REIV and REBAA to highlight the serious problems caused by this restriction is partly responsible for this change.

However, while we are grateful for any positive changes to the regulations as they apply to the property market and its stakeholders, we believe there is more work to be done.

What Has Changed?

The first thing we should do is recognise that the changes to state policies do make it possible for potential homebuyers and tenants to view properties in person. This is, of course, of critical importance to everyone involved.

However, with the current changes, only people from the same household may inspect a property, and then only for pre-booked time slots for a maximum of 15 minutes, however due to logistical pressures and resources, most sales agents and property managers can only offer five-minute and ten-minute time slots. During this time slot, the real estate agent may not be present in the property and must wait outside for the walk through to be completed.

In addition, Victoria has relaxed the restriction on travel for home inspection purposes, allowing people who have booked an appointment to do a walk through to travel outside of the prescribed ten-kilometer radius. (This applies to Metro Victoria only. If you are travelling from Metro to Regional Victoria, only one person is permitted to enter regional areas for purposes of conducting a final inspection in a purchase or to finalise the hand over of a new tenancy commencement or tenancy end of lease vacating inspection and hand over). Here is the state government table of restrictions for the latest permitted activity for real estate.

All of these amendments are an important step in the right direction. They will help us to move towards a situation where we can once again advocate for and help people find safe, suitable accommodation.

However, there remains several issues with this policy, such as:

  • There is a massive backlog of people looking to rent, buy and sell property in Victoria in general and in the Melbourne metro area in particular.
  • If two people are hoping to rent a property, but don’t yet live together, they would not be allowed, under the updated rules, to complete a walk through, unless they can arrange two individual bookings with the agent, that is already time poor and struggling to arrange access for all prospective enquiries.
  • The fifteen-minute time limit prescribed by the Premier and the Victoria government will not allow for sufficient physical inspection of the property, practical for some but not for all property types and sizes. Some buildings are substantial in size and land area and take time to complete due diligence. This is raising more issues around the right to due diligence before entering a contract as many sales agents are interpreting the current restrictions to prevent building inspectors access to property for anymore than the allocated 15 minute inspection allocation (general building inspector will take 45 minutes to an hour to inspect). Under the current restrictions, building inspectors can’t perform their duties unless a contract is entered into and the special conditions agreed upon include subject to building and pest inspection. This is not possible or permitted in the contract of sale under auction condition scenarios.
  • During the inspections where a five-minute inspection scenario has been allocated, potential purchasers and tenants won’t be able to ask any questions of the sales or leasing agent, so these questions will have to be asked outside, after their walk through. Not only does this make it difficult for potential buyers and tenants to properly assess the property, but it also limits the number of walk throughs that can be booked and completed in a day.
  • With the current backlog, it will take a considerable amount of time to work through everyone who needs to move – sometimes for important personal or financial reasons. Most properties will sell or be leased before all prospective buyers or tenants get a chance to inspect.

A Monumental Commitment

The other critical issue REIV would like to highlight with the current changes to the home inspection policy is that it places enormous pressure on would-be buyers and tenants to make life changing decisions with limited information.

With only five to fifteen minutes to view a property, many potentially-important issues will remain unseen and unknown. Even with a post walk through consultation with a sales or leasing agent, it’s impossible for every question to be asked and answered.

This means that people will still be asked to commit a huge sum of money on a property they aren’t sure is the right one, or to commit to a one-year lease based on the same weak and inadequate information.

Not only does this have a monumental impact on the lives of those tenants and home buyers, but there may well be disputes at a later date. It simply isn’t possible to provide all of the information required to make an informed decision, initiate proper negotiation or prepare for property bidding in a five-minute unaccompanied walk through.

Now more than ever before, buyers especially can benefit by exploring options to consult and engage an independent Buyers Advocate and a recommendation for a great place to start the search for a professional to be by your side is peak industry association REBAA (Real Estate Buyers Agents Association of Australia. REBAA Accredited Buyers Agents will help you “Buy With Confidence” navigate the market and deliver an advantage by leveraging experience, networks and skills to buy your next property at the best price and terms in your best interests. In the current environment literally get you access into the right property under manic conditions to make sure you don’t miss out.

Further changes required

REIV acknowledges that slowing the spread of Covid and ensuring the roll out of vaccines is of the utmost importance. And we obviously support and embrace common sense restrictions that help to prevent transmission and keep people safe.

However, we also believe that there are other risks to health, safety and economic recovery that are not accounted for or addressed in the current government policies related to home inspections.

We hope that the government will reconsider this policy and recognize the importance of professional advice and input during the property viewing process. It is critically important that, before people put their financial future on the line, or commit twelve months of their lives to a rental property, they are able to get all of the relevant information.

Therefore, we would like to request that the government once again amends this policy, allowing real estate professionals, (properly masked and socially distanced) to accompany potential tenants and buyers into a property.

By making these small but hugely significant changes to this policy, the Victoria government can help to ensure that families and individuals once again have the assistance they need to make the right decisions.

Proper, safe, secure, and healthy housing is a human right. And it is also even more critical right now, when we are all working and studying from home. So, while we understand and support the reasoning behind public health measures, it’s critical that those measures reflect the importance of the places we live right now.

No one knows what will happen with the pandemic tomorrow, next week, or next year. Conceivably, we might all be staying home for a long time to come. So, let’s help to ensure that the homes people are staying in are the right ones. Support REIV and change the policies to allow proper real estate services to resume.

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