While the easing of COVID-19 restrictions across the country has seen real estate professionals get back to business as usual, agents selling homes in Melbourne’s 36 hotspot suburbs are being forced back to more challenging times.
On Tuesday, the same day that Queensland announced it will re-open its borders to all states and territories – except Victoria – the Victorian Premier Daniel Andrews announced the “hot zones” (listed below) in 10 postcodes will return to Stage 3 Restrictions from midnight Wednesday until at least 29 July, after a spike in coronavirus cases in the state.
Victoria recorded 73 new cases of COVID-19 on Wednesday, marking the 15th consecutive day of double-digit increases in the state, with many linked to outbreaks in Melbourne’s virus hotspots.
These are big numbers in comparison to New South Wales and Queensland, which recorded 14 and zero news cases respectively on Tuesday.
Live auctions and open for inspections will now once again be banned in the affected Melbourne suburbs, while more than 30,000 residents will only be allowed to leave their homes for school and work, care or care giving, daily exercise and shopping for essentials.
Realestate.com.au executive manager of economic research, Cameron Kusher, said buying and selling property in the hotspot suburbs, and probably throughout Melbourne, is likely to be a much lower priority while this outbreak is happening.
“You can expect to see fewer auctions although the affected areas are not the most auction-centric areas,” Mr Kusher said.
“This will likely drag transactions in Melbourne lower and somewhat interrupt the post-pandemic recovery we were starting to see.”
Agents “rolling with the punches” as hotspots head into lockdown
Real Estate Institute of Victoria president, Leah Calnan, said the real estate industry is well prepared for managing this change having already gone through stage 3 restrictions earlier this year without any major setbacks.
She said hotspot agents adapted their business practises very quickly when the pandemic took hold, however the mental shift could be a struggle.
“I think people have been starting to think we’re on our way out and now we’re back in, so a slight shift in headspace and how [agents] manage that is what will probably be more challenging than the practical aspect,” she explained.
“We all have to just make sure we’re following the rules and we’ll all get through it.”
David Rubinic, director of Biggin & Scott – Inner North (Brunswick), which currently has three apartments listed for sale in the hotspot suburb of Brunswick West, said the news is concerning but agents are “rolling with the punches”.
“The last three to four months have been a bit of a day-by-day, hour-by-hour scenario and we’ve just had to learn to adapt. People have been pretty good about it and if a vendor has got something on the market and we have to get locked down and do what we need to do then they’ll understand that,” Mr Rubinic said.
“We’re all in the same boat, we need to get better so we can all prosper because obviously at the moment it’s very uncertain times.
“We’re put some good systems in place around making sure that we’re complying with all the government directives.”
A pivot back to online auctions and private inspections
Ms Calnan said the real estate industry has historically not been very good at embracing technology, but 2020 has been a remarkable year of change in this area with auctions moving online and the introduction of virtual inspections.
“I have to say, 2020 has forced [real estate professionals] to embrace technology and the feedback from agents is they’re loving it,” Ms Calnan said. “If there is one positive for the industry [amid COVID-19] that’s certainly the embracing of technology.
“Most agents are still running a blended approach to their auction campaigns so we are still seeing [auctions] being run online and on site. Now it will just mean that they will remove the on-site component and continue solely with their online platform for the next four weeks.”
Peter Kay, licensed estate agent and partner at Douglas Kay Real Estate in the hotspot suburb of Sunshine – said his main concern is that Sunshine vendors will back out because of the lockdown.
“Since restrictions eased [last month] auction results have been quite strong and it has encouraged sellers to make contact and make the move,” Mr Kay said. “At the moment we’re preparing some quality listings.”
“In the last six months or so there has probably been more private sales than auctions,” Mr Kontossis said. “The media will always use the barometer of auction clearance rates and not private sales.
“I’ve often argued that a sale is a sale, it doesn’t matter which method is used, it’s still a sale.”
However, Mr Kontossis admitted the suburb shutdowns will inevitably have some negative implications for real estate professionals as prospective buyers will not be able to view homes as easily.
As well as moving auctions online, open for inspections will also be banned in hotspot suburbs meaning agents will have to return to arranging private inspections.
Mr Kay said this means a slower pace of work but it’s all part of adapting to the current situation.
“We’re not used to having minutes to spare [like we do] with appointments, it’s usually very fast-paced on the weekends but I think just like society has slowed down, we have as well,” Mr Kay said.
Hotspot suburbs are meccas for first-home buyers
Agents have described a hard balancing act at recent live auctions and open homes in the lead up to the suburb lockdowns, as they tried to control hoards of prospective buyers amid the spike in COVID-19 cases.
Affordable house and unit prices in hotspot suburbs are a major drawcard for property hunters, particularly first-home buyers who are taking advantage of record low interest rates.
“Strangely enough, the number of people coming through have been busy so it’s been more about maintaining those [health] protocols,” Mr Rubinic said.
“Around the Inner North, particularly Brunswick West, it’s quite popular with buyers at the moment, particularly the couple [of properties] that we’ve got going at the moment, it’s young first-home buyers so they’re actually out and about in good numbers.”
“We couldn’t control the numbers, we had to delay starting the auction by 15-20 minutes to try and curtail the number of people there and say [to them], ‘are you planning on bidding because if not, you need to go home’,” Mr Kay said.
Mr Kontossis said they have seen good numbers of keen buyers showing up to home auctions in Reservoir in recent weeks.
“About 90% percent of those numbers are first-home buyers,” he said.
Ms Calnan said she is not concerned about first-home buyers losing interest in hotspot suburbs during the lockdowns.
“These new restrictions have been implemented for four weeks, and four weeks is really not a lot of time in the scheme of things,” she said.
“There are still plenty of first-home buyers around, we know the second round of the government’s 5% deposit scheme will be very popular and we’re not anticipating that the [lockdowns] will reduce the number of enquiries. It’ll just mean that [auctions] will go back to online platforms and private appointments rather than open for inspections.”
Melbourne’s COVID-19 hotspot suburbs
3060 – Fawkner.