QLD property industry already adapting to new ways of buying and selling real estate amid coronavirus crisis
Ray White New Farm real estate agent Christine Rudolph during a private inspection of a Kangaroo Point property with a potential buyer, in the wake of new changes to the way property is bought and sold following the coronavirus crackdown. Photo: Steve Pohlner.
QUEENSLAND’S real estate industry has already adapted to new ways of buying and selling property after an escalation in COVID-19 led the federal government to ban all public auctions and open for inspections.
The crackdown announced by Prime Minister Scott Morrison on Tuesday night had been anticipated, with many agencies having already made the switch to online auctions, private inspections and virtual tours in recent weeks.
Sellers are being urged not to panic as property experts say this is the time to buy, with the market likely to head into a “short, sharp downturn” before quickly rebounding.
The PM’s announcement follows an early Tuesday call by the Real Estate Institute of Australia for significant changes to be made to the way all agencies conducted their business.
Real Estate Institute of Queensland CEO Antonia Mercorella said the REIQ had already been working with the state’s real estate industry to prepare for the changes, including distributing toolkits with strict health measures and alternative methods for real estate transactions.
“This includes social distancing measures and the use of technology in place of open home inspections and in-room auctions,” Ms Conisbee said.
Real Estate Institute of Queensland CEO Antonia Mercorella.
“While in-room auctions cannot be conducted for the foreseeable future, online and telephone auctions will inevitably become the new normal.
“With restrictions on open home inspections, which traditionally attract large groups of people also prohibited, private inspections by appointment remain a workable option coupled with hygiene safeguards as recommended by Queensland Health which ensures real estate transactions can and will continue.”
But Ms Mercorella said it was “vital” real estate professionals were allowed to continue to operate during the crisis to ensure the market could provide a solid foundation for the economy.
“Every Australian needs a home. Whether that home is owned or rented, in almost all cases a real estate professional’s services are required to facilitate the journey,” she said.
One of the first to respond to the changes was one of the country’s biggest agencies, the Ray White Group, which sells one in eight houses in Australia and New Zealand.
Ray White Group managing director Dan White said in a statement that “it appears the scope of new business operating practices the group proposed earlier (Tuesday) to support the flattening of the COVID-19 infection curve has been endorsed as appropriate”.
Ray White Group managing director Dan White.
“The key message to take away is that all real estate onsite and in room auctions and open house inspections will be cancelled as of Wednesday night, but our members will still be able to host virtual property tours, private inspections and online/digital auctions, as we have been encouraging,” Mr White said.
“We will carefully adhere to the latest restrictions.”
Realestate.com.au chief economist Nerida Conisbee said only about 10 per cent of residential sales in Queensland were via the auction process.
REA Group chief economist Nerida Conisbee.
“Brisbane’s not a big auction market anyway so it won’t have the same impact we’ll see in Melbourne and Sydney,” Ms Conisbee said.’
Realestate.com.au has launched virtual tours of properties listed on its site to help home hunters.
“For people looking to buy, the bigger deal will be not being able to go into the home,” Ms Conisbee said.
Buyer’s agent Rich Harvey of propertybuyers said now was a good time to consider buying a home for those who had secure employment and finance already approved.
Mr Harvey said investors should be prepared to buy before the market bounced back, and for those who were struggling, they should talk to their bank about getting a better rate to refinance or taking a mortgage payment holiday.
“Don’t panic – it is not the time to sell the family home,” Mr Harvey said. “Stay the course and talk to your bank about holding on.
“We will get through the crisis.”
Property analyst Terry Ryder of Hotspotting also sees this time as a buying opportunity.
“It is a time to be looking for opportunities, when others are perhaps intimated and sitting on the fence,” Mr Ryder said.
“I believe it (coronavirus) is going to change the way in which we interact with each other, but I don’t believe it is going to fundamentally change the property market.”
Property analyst Terry Ryder of Hotspotting.
There are still 73 auctions scheduled in Brisbane this Saturday — up from 59 last weekend, but the Real Estate Buyers Agents Association (REBAA) believes that number will start to reduce.
REBAA president Cate Bakos said she believed the changes would result in selling agents steering away from virtual auctions in favour of private treaty sales.
“While virtual auctions probably won’t be banned as they technically don’t infringe on the social distancing rules, agents will likely veer away from them as they can’t build the same number of buyers or read the competition like they ordinarily could via the private treaty process,” Ms Bakos said.
“Buyers won’t want online auctions without visibility. There is no way to guarantee against false bidding and even if selling agents are honest, buyers will still hold the element of distrust.”
Ms Bakos said there were several alternatives to selling property than by public auction, including by private treaty, ‘best and highest’ regimes and via expressions of interest (or tender).
Christine Rudolph of Ray White New Farm said she started conducting private inspections for prospective buyers and offering virtual tours a week ago.
“I said; ‘We’re going to be proactive, just in case we go into lockdown,” Ms Rudolph said.
“I’ve had three really strong inquiries this morning on the back of virtual tours.”
Ms Rudolph said she was finding many prospective buyers were happy to do a virtual tour of a property before then organising a private inspection.
Ray White’s Christine Rudolph is offering private inspections of this penthouse at 48/30 O’Connell St, Kangaroo Point.
“I’m finding there are two types of buyers: the ‘must buy now’ buyer who has sold their property and don’t want to rent, and the opportunistic buyer, who wants to take their money out of the sharemarket and put it into the safer investment of property,” she said.
“There are also two types of sellers at the moment: those who have already purchased elsewhere so they are committed to sell, and the commercially minded seller who wants to take cash out of property and reinvest it in the sharemarket, where there are good buying opportunities.”
Cheryl Macnaught is one of those sellers.
Inside the property at 48/30 O’Connell St, Kangaroo Point, which is for sale.
Ms Rudolph spent yesterday conducting private inspections of the four-bedroom, three-bathroom penthouse she is selling on behalf of Ms Macnaught in Kangaroo Point at 48/30” O’Connell Street.
Ms Macnaught, a former financial adviser, said the Kangaroo Point apartment was one of a number of surplus properties she was looking at selling at this time.
“With what’s happening with the markets — and this is going to be worse than the GFC — it’s a very good time if you’re sitting on cash in the bank to look at the sharemarket,” Ms Macnaught said.
“I’ve recommended to clients in times like this to keep enough cash on hand for at least 12 months of living expenses. and those who have been doing it would not be in a worried state at the moment if they lost their job.”
THE NEW RULES FOR BUYING AND SELLING PROPERTY
*No public onsite or in-room auctions
*Online auctions only
*No open home inspections
*Private inspections only
*Virtual tours of properties allowed