Property viewings allowed at Level 3! Real estate transactions could return to normal

Private viewings allowed under conditions

When New Zealand moves to Alert Level 3 next week, private viewings will be permitted for properties for sale or rent. Housing Minister Megan Woods confirmed the news yesterday. Woods said real estate agents could resume showing homes, but viewers must book in advance, with no more than two appointments permitted each day. For properties currently occupied by tenants, viewings require the tenants' consent. Further details of specific health and safety measures for viewings have yet to be announced.

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The Real Estate Institute of New Zealand (REINZ) welcomed the news. REINZ chief executive Bindi Norwell said: “We are pleased the government has listened to industry feedback and look forward to receiving further necessary details over the coming days.” Norwell noted that

real estate services, which account for around 13% of New Zealand's gross domestic product (GDP), are crucial to the economy. In responding to the negative effects of COVID-19, professionally managing property sales and purchases is vital to New Zealanders' confidence and wellbeing, and will help minimise the pandemic's impact on the national economy.

Who will benefit?

REINZ says the ability to buy and sell homes and move house is crucial to New Zealanders' health and wellbeing, as well as the national economy. So who will benefit from the resumption of viewings?

First, of course, is the home sales market. Norwell said allowing private viewings “means thousands of people across the country who have been in difficult situations over recent weeks can now proceed with property transactions”.

• Buyers: For those planning to purchase an expensive property, this is likely to be one of the biggest decisions most will make in their lifetime. Being able to enter the property they are considering and inspect every detail therefore matters greatly. Enabling buyers to view properties for sale beforehand is also crucial to the sales and property management process.
• Sellers: Many homeowners adopted a wait-and-see approach to selling around the time lockdown was announced. This partly reflected concerns about house prices during an economic downturn, but also the anticipated effect of buyers being unable to view properties in person on buyer numbers and demand. Allowing private viewings will therefore ease market shortages to some extent.
• Those waiting to move in: People who have largely completed their purchase are waiting to carry out final inspections, check that electrical equipment is still working properly and confirm that the property remains in the condition they saw more than a month ago, so they can settle and move into their new homes. This is undoubtedly excellent news for them. It means they will soon escape the predicament of paying hundreds or even thousands of New Zealand dollars each week in interim costs because they cannot move.

The rental market will also benefit.

• Landlords: The pandemic has left many rental properties unexpectedly vacant across the country, with owners urgently needing income to meet mortgage repayments. Allowing prospective tenants to view properties will help landlords find tenants sooner.
• Tenants: Although tenants may be less demanding than buyers, being able to inspect a home before moving in is equally crucial to their decision on whether to rent it.

A positive response from the property industry

Today, almost all real estate companies responded positively to the Housing Ministry's new rule permitting private viewings, saying it would provide a strong boost to a swift recovery in the property market.

Ray White NZ chief executive Carey Smith believes allowing private viewings gives real estate companies an opportunity to show properties and will benefit prospective buyers and tenants. “Ray White agents will use safe business procedures to assess properties throughout New Zealand. Once listed, these properties will be marketed to existing buyers and recommended more widely to interested clients in our buyer database.”

Barfoot & Thompson managing director Peter Thompson also said buyers' personal experience would improve greatly once they could visit properties rather than simply look from the street. “As long as we can show properties, we have buyers waiting to buy, sellers waiting to list and agents ready to transact.”

NZ Century 21 owner Derryn Mayne said significant increases in website traffic and the time users spent online over the past month showed that buyers with genuine demand had not disappeared. They had simply been forced to view homes on computers rather than drive to them. She acknowledged: “Although the company is working hard on its online platforms, the experience is ultimately different.”

Property Brokers chief executive Bill Highet was even more optimistic: “This will not only help our economy develop, but also give buyers and sellers some certainty. This decision means the property market is very likely to recover soon.”

Ultimately, the real estate companies are expressing three main points:                                                                                

• The property market has a positive outlook, with many potential buyers and strong demand;
• Reliance on online viewings is one of the key factors affecting property transactions and contributing to the market slump;
• Although private viewings differ from open homes, they are undoubtedly the safest and most effective positive development at this stage.

Safety measures to draw on

The government has yet to announce the necessary safety measures for private viewings, but many real estate companies have begun developing operating procedures based on safety restrictions at Level 3, aiming to provide a safe environment for all clients and service providers.

Ray White's successful experience operating in Australia may provide a useful reference.

• Buyers must first confirm their interest in purchasing through an online virtual viewing.
• They then attend an individual viewing in person by appointment.
• During scheduled viewings, only two people may enter the property at a time, strictly maintaining 5 metres of social distancing. New Zealand's requirement is 2 metres.
• Owners need to open all internal doors, windows and cupboards beforehand so viewers and agents do not need to touch any surfaces.
• Everyone entering the home must use hand sanitiser.
• All surfaces must be wiped down and disinfected after each viewing.