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Melbourne real estate sector could come to a grinding halt under strict new rules: Lockdown 2.0

Home-builders can now only have five workers on site during stage four restrictions in Melbourne. Photo: Metricon

Melbourne’s real estate market could come to a grinding halt under strict new stage four rules announced by the Victorian government on Monday.

Despite releasing directives that showed online auctions and private one-on-one inspections could still go ahead at 6pm on Sunday, new rules announced by Premier Daniel Andrews on Monday afternoon outlined that “property operators and real estate services” would have to close for “on-site work” across Melbourne from midnight on Wednesday.

Whether that rules out one-on-one inspections for the next six weeks remains unclear.

No one could clarify exactly what today’s announcement meant for the industry when Domain contacted the Department of Health and Human Services and the Real Estate Institute of Victoria.

REIV president Leah Calnan said the group had been trying to get information from the government on Monday.

“We’re continuing to seek out what the finer details are,” Ms Calnan said. “You can still settle on a home and move house at the end of a lease, so property managers will still continue to work,” she said.

At his press conference on Monday, Mr Andrews said there would be more announcements to come regarding the real estate industry, particularly around rentals and tenants.

Melbourne’s construction industry was given much clearer parameters.

From midnight on Wednesday, developers of apartment buildings higher than three storeys will need to reduce their normal workforce to a number not exceeding 25 per cent, while home-builders will only be able to have a maximum of five people on site.

“Our construction sector, in many ways the lifeblood of our economy, will also move to pilot-light levels,” Mr Andrews said. “This will allow the industry to keep ticking, while also making sure we limit the number of people on site.”

But industry experts fear it will make projects unviable and will also mean home-builders, who had successfully applied for the federal HomeBuilder grant, face an uncertain future. 

The moves to reduce the number of builders on housing projects follows concerns about builders working on a high-rise in the Melbourne CBD testing positive for COVID-19.

Work on the Premier Tower apartment building, at 134-160 Spencer Street, was shut down after 12 workers were diagnosed with coronavirus last Friday.

Urban Development Institute of Australia (Victoria) chief executive Danni Hunter said the move to have fewer workers on construction sites would make many projects unviable.

“It will absolutely slow down the industry and for some it won’t be viable to continue,” Ms Hunter said. “We’re concerned for employees of the industry whose jobs are under threat.”

Ms Hunter said the lockdown of the industry had to be a hard six weeks, to allow projects to go ahead. 

She also called on the federal government to extend the HomeBuilder grants scheme to allow Melburnians time to buy land and start construction after the December deadline.

At the moment, to be successful for the grant, contracts for the house and land package must be signed by December 31. 

“This really kills HomeBuilder because now it means that the stretch to deliver the land and start construction will be delayed,” she said.

HIA Victoria was more complimentary of the move, with executive director Fiona Nield saying it would keep thousands of people in jobs.

“As Victoria moves into this stage four lockdown phase, today’s decision is vital recognition by the government that the procedures our industry has already put into place are working and that housing construction can practise the necessary safety measures,” Ms Nield said.

She said there were more than 30,000 houses and more than 30,000 apartments under construction in Victoria, mostly in Melbourne.

Mr Andrews said the closure of many industries was needed to stop the spread of coronavirus and save lives. On Monday, 429 people tested positive for COVID-19 and 13 people had died.

The moves will see Victoria’s workforce reduced by a further 250,000 people, after an initial 250,000 people lost their jobs in the first wave of COVID-19.

“These are heartbreaking decisions, but there is no choice,” he said.

source: domain

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