Property sales slump in pandemic era
Lower valued properties have been changing hands more frequently this year when compared with 2019, says Real Estate Agents Licensing Board Chairman Dr. Abdul Hassan. Dr. Hassan said one of the reasons could be that most of the buyers may have difficulties to raise loans to invest in high valued properties.
“The job losses and reduced hours of work would make it difficult for many potential buyers to qualify for loans from the lending institutions. “Also, it is likely that many buyers would not like to invest on expensive properties now due to the low rental demand,” he said.
Dr. Hassan said in the past, the higher rental properties were occupied by international organisations and expatriates but because of COVID-19 most had left the country. He said as a result, higher rental properties had been vacated by the tenants or rental reduced substantially to retain the existing tenants.
According to Dr. Hassan in several cases the intending sellers of properties wished to hold back the properties and wait for better period then the market would improve. A similar thinking is in the minds of those potential buyers that may have funds but hesitant to invest due to current downturn in the economic activities and job securities due to COVID-19.
Dr. Hassan said data collected at national level for the period of January to September 2020 when compared with the same period last year indicated that there was a drop of 15 per cent in the number of properties sold from 2019 to 2020.In addition, statistics from the board showed that the total value of properties reduced by 25 per cent, indicating that both the number of properties sold and the aggregate value of properties reduced over this period.
Dr. Hassan said the average sales in 2019 was 126 per month but it reduced to 110 per month in 2020.He said based on information from their database it was evident that the property prices had decreased comparing the 2018 and 2019 figures. According to the REALB database in 2018, the total value of property sold was $434.6 million from January to September and for the same period in 2019, the total value of property sold was $334. 33m.So far this year, $237m worth of properties were sold from January to September.
Meanwhile Dr. Hassan said many properties had been listed by the real estate agents but actual sales transactions were limited. He said the impact of COVID-19 would be more apparent once the holiday period to service the loans was over. “If an individual decides to sell property then, it is his/her choice and we cannot do anything.
However, according to the statistics we have seen that less number of properties are being sold, mostly valued less than one million dollars. “Focus areas for REALB is in the process of introducing its education courses to the people engaged in the real estate industry. Dr. Hassan said in future passing the exam would be a criterion to grant licence, adding that this action was taken to ensure that the standard of real estate sector improved as the board moved forward in the coming years.
He said it would be compulsory for all applying for licence pass the required exam, adding that having gone through the course, individuals would have a better understanding and knowledge to engage in the industry. He said the demand in the selling, buying and renting of properties were down when theCOVID-19 affected Fiji in March. “The immediate impact was that in March, only 99 properties changed hands with a total value of $36.2m and in April the number of properties purchased further dropped to 80.”
Meanwhile Dr. Hassan said since the spread of COVID-19,REALB had ventured into a number of projects and the top priority was to introduce facilities to agents for online registration. “An agent can be applying for new licence, renewal and recruitment of salesperson without having to visit REALB Office. This process would reduce the expenses and facilitate the registration process. Other activities of REALB include revamping of website, amendment to the Act, providing national property sales data and development of code of ethics for the agents.”
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