The ongoing COVID-19 pandemic and its impact on the economy has pushed the real estate sector to an all-time low.
The Real Estate Agents Licensing Board says this is resulting in low sales and reduced prices by property owners eager to sell.
REALB Chair Dr Abdul Hassan says there may be more of a slowdown post-COVID-19.
“In the next month or so there will be a big impact on the activities of the real estate agents in terms of the income that they will derive from the real estate dealings.”
The Board says with uncertainty in the market due to the deadly virus Fijians are hesitant to buy because no one knows when the economy will recover.
Housing Minister Premila Kumar says they have already started seeing a reduction in the property prices, but it’s not all doom and gloom.
“Of course there are people who have the money so they will grab this opportunity. COVID-19 is a mixed bag of feelings. One is there are opportunities for people. People who have money can invest in the properties as the prices will come down.”
According to the REALB, April saw the lowest number of property listings by real estate agents.
Housing Authority confirms that real estate agents will be marketing, and selling 27 high-end residential, civic and commercial lots, on behalf of the Authority.
The Authority says these are all non-residential and high-end for which they had previously called Expressions of Interest for, and they are old stock in the Authority’s books for few years.
Housing Authority also clarifies that this, in no way, deviates from the Authority’s main objective which is to provide affordable housing to low and middle-income earners.
It says the Authority has a policy for the sale of high-end and non-residential lots which requires them to be tendered out, before being placed with real estate agents.
Furthermore, these lots were previously advertised but tenders received did not meet the Authority’s valuations, as such they have been issued to registered real estate agents to market and sell on the Authority’s behalf.
The Authority says as the economy continues to feel the impact of the COVID19 pandemic, it is confident that this partnership through private and public engagement will be crucial in the selling of lots and meeting the demand for home ownership.
Permanent Secretary for Ministry of Industry, Trade and Tourism,Shaheen Ali (left) with the members of the Standing Committee on Economic Affairs Viliame Gavoka and Dr Brij Lal during the presentation of PAFCO annual report yesterday. Picture: RAMA
With the coronavirus outbreak causing an unprecedented global economic slowdown, Fijian businesses have been urged to participate in a survey by the Ministry of Commerce, Trade, Tourism and Transport (MCTTT) and the International Finance Corporation (IFC), to understand the economic impact of COVID-19 on the private sector and find practical solutions.
MCTTT permanent secretary Shaheen Ali said the ministry was working very closely with the various industries and government agencies to get a fair assessment of immediate on the ground impact in order to devise policy redress and incentives.
“The impact is felt across the entire global value chain, with micro, small and medium-sized enterprises (MSMEs) being at the forefront of long-term economic and social ramifications,” Mr Ali said.
“The Fijian Government understands that the economic crisis brought on by the COVID-19 pandemic has severely impacted businesses across Fiji.
“The uncertainty of the situation globally and nationally in itself presents a challenge, which was exacerbated by TC Harold.
“We have made best endeavours to speak to our industry partners to understand how best we can curb the impacts.
“Without complacency, we want to keep the conversation real time and hear from businesses. Irrespective of how big or small the operation, everyone should have a say.”
The survey will assess the overall impact of the crisis and TC Harold on businesses, what is and could be done to adapt in the short, medium and long term, what changes are being made and can be made to ensure business continuity, recovery and growth, Mr Ali said.
“COVID-19 has affected all economies in the world and the private sector has suffered greatly with some even going out of business,” IFC country representative to Fiji, Samoa, Tonga Kiribati and Tuvalu, Deva De Silva said.
“We will need to be innovative and creative, we can do that in Fiji if we know what the businesses are facing and what their key priorities are. The most important objective of this survey is to hear directly from business sector.”
IFC’s work in Fiji is supported by the governments of Australia and New Zealand under the Fiji Partnership.
RESERVE BANK OF FIJI HAS REDUCED ITS OVERNIGHT POLICY RATE
The Reserve Bank of Fiji has reduced its Overnight Policy Rate in the hope that it will ease borrowings for consumers due to the effects of COVID-19.
The OPR has been dropped from 0.50 percent to 0.25 percent, or 25 basis points.
The OPR is the Central Banks recommended rate for commercial banks to use as a basis to issue loans.
RBF Governor Ariff Ali says due to declining consumer and business confidence, the reduction should provide necessary stimulus to the domestic economy.
Consumption and investment are also showing signs of slowing down while credit growth continues to decelerate.
The OPR is not a compulsory directive to commercial banks, but an effort to influence the commercial lending market.
The RBF adds the negative effects of COVID-19 on the tourism industry will affect wholesale and retail trade, construction, transport and manufacturing sectors, including Government revenue.
Ali says the magnitude of the economic slowdown will depend on how long the pandemic persists.
Bank liquidity remains adequate, totaling $669 million as at 17 March 2020 while foreign reserves are also adequate at $2,264 million as at this morning.
The RBF hopes a reduction in the OPR will help stimulate demand by reducing the cost of borrowing and support much-needed consumption and investment.
Nine hundred and forty-five new investors joined the stock market last year.
The South Pacific Stock Exchange says this is largely attributed to the successful listing of the exchange’s first tourism-based entity, Port Denarau Marina.
The SPX says in addition, market capitalization increased by 27 percent to over $4 billion, equivalent to 33.8 percent of Fiji’s Gross Domestic Product at the end of January.
Favorable trends were also noted in both the volume and value of traded securities which grew by 76 percent and 33 percent, respectively over the same period.
The SPX says they continue to engage both traditional media and online platforms to educate the public and investors on understanding the opportunities and risks of investing in Fiji’s stock markets.
The Fijian Competition and Consumer Commission continues to receive complaints of illegal rent increment despite the rent freeze being in place.
FCCC Chief Executive, Joel Abraham says some landlords are now adding new charges to the existing rent.
He says landlords are becoming quite creative nowadays.
“By putting in other charges such as maintenance fees and levying a maintenance fee of say $50 extra per month because they can’t call it a rent increase so a maintenance fee has been imposed unilaterally.”
The CEO says such issues have come under their radar and the Commission is currently looking into the matter.
The issue of unscrupulous realtors, unethical practices, shortage of affordable and quality housing must be addressed.
Permanent Secretary for Industry, Trade Shaheen Ali stressed this during the Second National Real Estate Conference adding that other issues that will need to be addressed include skilled labor shortage, natural disasters, and climate change.
Ali says real estate agents are front-liners of the investment sector and they meet investors and potential investors on a daily basis.
He says the way these agents interact with that investor determines the first impression the investor will have on doing business in Fiji.
Ali says real estate agents must conduct themselves in a business-friendly and investment facilitative manner.
He says the Government will finalize the Investment Act, which will replace the old Foreign Investment Act by this year.
Ali says the new Act will create an open and modern framework, which also reorganize and reform Investment Fiji.
The Financial Intelligence Unit has played a major role in helping government counter bogus companies.
They also countered for agents who wanted to enter the Fijian market.
Attorney-General Aiyaz Sayed-Khaiyum says this was one of the reasons, why institution such as FIU needed to be present and working together with other sectors to overcome financial manipulation.
He says there have been numerous attempts made by opportunists to dupe not government.
“We had also many investors that have come to the government or write letters to the government, saying we want to set up a rail system between Suva and Nausori, we want to set up some energy company. We immediately refer it to FIU and invariably that most of these organizations are bogus organizations. They have a false website, they have an address in some country that does not exist. So FIU gives that information to us and they are quite pivotal in that respect and therefore they do contribute towards ensuring that we do not allow the pernicious effect of things like money laundering.”
Sayed-Khaiyum adding that FIU actually a pivotal role in respect of the intelligence gathering and intelligence dissemination for the Reserve Bank of Fiji as well.
People selling properties without proper license and failure to disclose information to potential buyers.
These are some of the challenges faced by the Real Estate Licensing Board.
Major discussions are expected to be held around these issues at next weeks Real Estate National Conference.
The theme for this year’s conference is ‘Resolving Challenges in Real Estate’.
REALB Chair Dr. Abdul Hassan says they’ve been actively involved in road shows, talanoa sessions and public consultations around the country.
He adds they discovered several issues which remains a strong challenge for REALB during the consultation.
Hassan says during the conference, REALB and the other stakeholders will be able to find solutions to the challenging issues in the real estate sector.
“The agents would be able to enhance their knowledge from the speakers who would cover on issues affecting real estate. We will have speakers from various organizations including the public and private sectors. There would be four sessions and at the end of each session, questions and answers would be allowed,”
More than 96 real estate agents and salesperson are expected to attend the conference.
Some residents are raising concerns with the Local Government Ministry in regard to apartments being built on residential lots.
Minister Premila Kumar has confirmed receiving complaints but says one has to understand there is a scarcity of land in urban areas.
Kumar stressed that due to urbanization the demand for housing has increased, however, they are giving approvals for apartments depending on the type of land and zoning.
“Residential A is simply your single house with servant’s quarters and residential B you can have your units and then it goes on to residential C so based on the land category or zoning that’s how the approval is given.”
Kumar adds the demand for affordable housing is increasing due to urbanization.
“The public needs to understand that with urbanization –when people are moving into the city, the cities and towns grow. It cannot be the same as it was 30 or 40 years ago. The whole landscape changes and we need to be geared to accept that change.”
The Local government ministry has stressed the government will continue providing affordable homes for low and middle-income families.
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