Home buyers, sellers and would-be renters will be left in the lurch unless the Government allows private home viewings and pre-settlement inspections under Level 3 lockdown, the real estate industry says.

And they are questioning why it’s taking so long for the Government to make up its mind on the issue.

The real estate sector virtually ground to a halt over the month of Level 4 lockdown, with people who had bought or rented a home unable to move in and people in the process of buying or selling unable to settle.

The Real Estate Institute (REINZ) estimates 5800 properties worth $3.7 billion have been affected over the last month.

Level 3 changes that to an extent, with real estate agents allowed to open their offices and go into people’s homes, although they can’t run an open home or have customers into the office. People can move into a house they’ve bought or rented.

But the big issue, say industry figures, is whether they can check it’s okay first. 

Real estate agents say they are frustrated the Government hasn’t provided guidance on what they see as a critical issue – will people be allowed one-on-one home viewings, and will buyers and renters be allowed to do final inspections so sales or rental contracts can go ahead.

Are home inspections safe?

It may not just be the Government holding things up here. The industry and the independent sector regulator, the Real Estate Authority, appear to be at odds.

On Monday, the Real Estate Institute sent an email to its members:

“REINZ and the industry’s view is that private viewings could take place in a safe manner for real estate professionals and customers, clients or tenants. However, the REA’s view differs, and our regulator is advocating to Work Safe and the Ministry of Justice that private viewings should be prohibited under Alert Level 3. 

“This is why we have been unable to share the draft guidelines with you as of yet, despite many of you asking for them. We understand how frustrating this is for everyone.”

REINZ says it contacted Ministers on April 9 outlining the industry’s plan for operating safely and asking for clarification about what activity can take place at various alert levels.

A senior industry source says they are still waiting for guidance, although they were hoping this would come from the Ministry of Business, Innovation and Employment in the next 24-48 hours.

Surely showing one buyer at a time through a house, particularly a vacant house, would be safer than standing in a supermarket or chemist queue.

But they were concerned the Government might not allow private viewings and pre-settlement inspections, making it difficult for people to actually buy or rent a home.

“Surely showing one buyer at a time through a house, particularly a vacant house, would be safer than standing in a supermarket or chemist queue,” one Auckland real estate agent told Newsroom. “If all buyers were wearing gloves, face masks and unable to touch anything it would be a safe operational mode. 

“Same with pre-settlements – these should be easily done in a safe manner.” 

Stressed to the max

Another industry insider said the Level 4 lockdown had been stressful for families waiting to move into a home. 

“They are waiting to be able to do that final inspection. They want to test the hot water still works and make sure no one has punched a hole in the wall in the month since they last saw the house.” 

The stress is exacerbated where people have large short-term bridging loans covering their old and new homes. 

“Some are waiting for the final inspection and then money can transfer.”

She says she can’t understand why building sites are allowed to reopen and tradespeople to work in people’s homes, but a real estate agent can’t show individuals around.

“If I can get a sparkie to put a heated towel rail in my bathroom, and spend maybe a couple of hours to install it, why can’t someone spend 30 minutes for a private viewing or pre-settlement inspection?

“I personally think this is bonkers.”

She says lockdown has been tough for people who desperately need a new place to live but can’t go to look at anywhere.

“We have people who just got divorced and are trying to get out of the house, there are situations where there is domestic violence, other people stuck in an expensive Airbnb that want to get into a flat.

“People are stressed to the max.”

No timeframe on clarity

Real Estate Authority spokesman Martin Švehla told Newsroom he couldn’t yet clarify whether private viewings or final inspections would be possible under Alert Level 3.

“We are working with other agencies to gain this clarity as soon as possible,” he said.

But the organisation went further in a letter to industry players following the REINZ email.

“Some of you may be under the impression the REA has been working to block the ability for licensees to run private viewings for prospective buyers,” it said.

“I would like to assure you this is not the case. Our proposed approach allows potential buyers to physically view properties under specific circumstances.”

The email said the final position is still to be determined by Ministers.

“We continue to work with government officials to have this matter clarified as soon as possible.”

An MBIE spokesman pointed Newsroom to various websites with information about workplace restrictions at different alert levels, and about infection disease control advice for workplaces, but provided no specifics about real estate.

“Businesses should carefully consider how to safely operate at each alert level based on their individual circumstances. Industry organisations will also be issuing specific guidance for certain sectors and kinds of workplaces.

“If in doubt, businesses can contact WorkSafe, their industry organisation or their local Chamber of Commerce and BusinessNZ.”

Would it were so simple.

Nikki Mandow was Newsroom's business editor and the 2021 Voyager Media Awards Business Journalist of the Year @NikkiMandow.

Leave a comment