Article by Stephen Gibson | Accredited Property Law Specialist
More than two months into the COVID-19 National Health Emergency and, believe it or not, life in Queensland’s property sector goes on. Slower, no doubt, but continuing nonetheless.
While the temporary ban on auctions and open home inspections might mean our local Real Estate Agents enjoy their first weekends off, ever, entrepreneurial ingenuity springs eternal and willing buyers and willing sellers continue to find each other despite the maelstrom.
Although the volume of real estate transactions occurring across Queensland has undeniable decreased, the apparatus of our property market remains fully functional;
- agents can still take listings and show properties;
- lawyers can still prepare contracts;
- the banks are all still open for business;
- the Land Registry is still accepting property transfers; and
- the Office of State Revenue continues to collect transfer duty with its usual dispassionate rigor.
Queensland is also yet to see any meaningful depression in property values. That might be yet to come, but regardless of the pandemic;
- property is for the long term. The pandemic will come and go, but the real estate will remain;
- price will remain a function of supply and demand. If sellers continue to remove their properties from the market (as appears to be happening), transaction volumes will drop, but prices should hold steady.
The Issues
There are a couple of issues that anyone buying or selling during this time should take proper steps to manage.
1. Social Distancing
The current social distancing requirements are proving to be a minor inconvenience to the process of property sales, but are far from disrupting it:
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- Real estate agents can no longer run open homes or auction sales. They can however continue to operate private inspections.
- Contracts can be prepared and executed without the need for face-to-face meetings using email or platforms such as DocuSign;
- Lawyers have made the list as essential service providers and can still meet with buyers and sellers to provide proper advice.
- Some law firms, finance brokers and other advisers have the facilities to meet with their clients through videoconferencing platforms like Skype, Zoom and Microsoft Teams.
- The Queensland Titles Office have also made special arrangements to enable lawyers to witness documents without the need for face-to-face appointments.
- Australia Post is still operating, and will likely continue to operate its postal service, even if its retail outlets are ultimately required to close.
2. Finance
Buyers should obviously be extremely mindful of their own capacity to afford additional debt in the current climate. Any buyer working in an affected industry, or an industry that is likely to become affected by further government shut downs, should have a realistic expectation of their eligibility for bank finance in the short term.
We are also seeing most new loan approvals being conditional upon the borrower (buyer) still having a job by the settlement date. So again, be mindful of the heightened possibility for circumstances to change unexpectedly.
Buyers should seek to include additional special conditions in the purchase contract to give them some additional protection to guard against these heightened risks.
3. Delays
COVID-19 appears to be stretching the banks’ customer service resources extremely thin.
In recent times we are observing additional and extraordinary delays in lenders processing loan applications and booking in settlements etc.
When negotiating a contract, the parties should allow themselves generous timeframes for both finance approval conditions and settlement, to accommodate these mounting delays.
4. Lockdowns
Probably the greatest potential impediment to a conventional property purchase or sale, is a Government ordered lockdown that affects one or more of the stakeholders required to complete the transaction.
Properly advised parties can however largely mitigate these issues with technology and suitable contract conditions.
Parties should seriously consider moving all new transactions to an entirely paperless, digital conveyancing process using a platform like PEXA. Before engaging a lawyer to handle the transaction, both buyer and seller should first make sure that their lawyer is already registered for, and practiced with, digital conveyancing through PEXA.
If you are looking to buy or sell real estate during these turbulent times, times, McCarthy Durie Lawyers can help. MDL are specialist property lawyers who have weathered more than a few economic upheavals over our 43 years’ in business.
We have a suite of quality contract documents and special conditions on hand that can be tailored for your specific circumstances and ready to service buyers and sellers alike on an urgent basis.
We are 100% remote ready and have the capability to continue to service our clients despite any Government ordered lockdown. We are PEXA registered and ready and can provide a 100% digital conveyance to minimise any COVID related disruption.
We can do all of this for a competitive fixed fee.
Call me directly on 07 3479 5217
Stephen Gibson | Director LLB, BBus, Acc. Spec. (Prop) – Qld
Property | Accredited Specialist
DIRECT +61 7 3479 5217
PHONE +61 7 3370 5100
EMAIL StephenG@mdl.com.au
