Feature article

Alert Level 3 for the NZ real estate industry

A lot has changed or been put on hold due to COVID-19 and Government Alert Level restrictions.

What it means to be at Alert Level 3 for the NZ real estate industry

From 11.59 pm April 27, New Zealand will be moving to Alert Level 3 and this is going to help start turning the wheels of real estate once more for both sellers and buyers on their real estate journey.

What we can expect to see with Alert Level 3, is that people who have purchased homes will be able to physically move into them with furniture removal companies allowed to operate once more. You may find there is a long waiting list for your preferred mover.

For future sales and purchases, real estate agents will be able to visit homes being prepared for sale. They may not have customers to their office and are advised to work from home.

Photographers, videographers and home stagers can also visit homes being prepared for sale if their work can’t be done remotely, as long as they keep to COVID-19 health and safety requirements and maintain a 2m distance from occupants.

Property inspectors, valuers, engineers and tradespeople, such as plumbers and electricians are able to enter homes once more if necessary. They must maintain the recommended distance of 2m, comply with their industry-specific COVID-19 guidance, and have the permission of the property’s occupants to come to the home.

Private viewings get the go ahead

Private viewings of homes for sale or rent will be allowed by appointment under Alert Level 3 as long as permission is given by the vendor and the property’s occupants. Occupants must leave the premises while the viewing takes place. Two private viewings per day will be allowed on properties and two people from an extended bubble can attend this visit with the agent. They must keep the recommended physical distance from the agent and can’t touch any surfaces in the home. People can’t travel between regions to view properties.

Attendees must be pre-qualified to ensure only serious buyers attend a private viewing. The agent must email them the relevant COVID-19 information beforehand, which includes hygiene expectations. Private viewing attendees must pre-register, providing names, addresses, phone numbers and email addresses to help with contact tracing.

No private viewings can take place at properties where occupants have been ill with flu-like symptoms, are self-isolating, or have been in contact with a confirmed case of COVID-19 within the previous 14 days. High risk people –those over 70 or with existing medical conditions – shouldn’t attend viewings if possible.

The private viewing must be contactless, so the agent or property manager must open all internal doors and cupboards before the viewing goes ahead. Attendees have to wait in their cars until the agent or property manager advises them they can enter the property, ensuring there is no contact between attendees.

Making an offer

All offers, including auctions and multi-offers, should be presented by email, phone or video call. Your agent will work with you to put the terms and conditions you would like into the sale and purchase agreement. Then purchasers will send a copy of this to your lawyer to check before you sign it electronically. You can also receive it and send it back by contactless delivery.


If an appraisal can’t happen remotely, agents can briefly visit homes to conduct an appraisal with permission of the vendor or tenants.

Discussions about the agency agreement, marketing and listing process can only happen via telephone or virtually, not in-person.


Thanks to removal firms being back in operation, property settlements can happen once more and home moves can occur between regions.

Pre-settlement inspections by professionals may take place but only if the inspection is a condition of a sale and purchase agreement and where the inspection can’t be carried out remotely. The purchaser should not attend this inspection, they can only follow the inspection virtually.

Under Alert Level 3, conditional and unconditional contracts can be made. Contracts must be signed electronically or there can be contactless pickup or delivery if absolutely necessary.

Real estate activities which still can’t happen

Public auctions, on-site or in auction rooms are still verboten under Level 3 with the Government anxious to avoid crowds during this stage of the COVID-19 pandemic.

The nimble real estate industry has seen a rise in virtual auctions during lockdown and listings which were destined for auction being turned into sales by negotiation or tender.

Where the terms of an auction say only unconditional bids can be accepted, REINZ recommends the agent talks to the vendor about providing professional reports for the property. Where this happens, the agent must explain to potential buyers the risks of relying on a report commissioned by the vendor.

While open homes remain off the cards, agents and vendors will be relying on video and 3D tours to give buyers a flavour of the home. At Trade Me Property, 3D tours and video viewings are available on a number of listings, the video and 3D tours highlighted in bright green icons on relevant listings on the platform. Useful buyer information such as floor plans and LIM reports, will continue to be available on request from the selling agent.

Agents are not advised to use letterbox drops to market a property. Visiting a property with a group of agents (caravan) isn’t allowed either. Agents will have to rely on property videos and photos.

Bridging finance

Buyers and sellers can talk to their bank or mortgage provider about bridging finance if need be. Banks will be looking closely at applicants’ job security and are occupied helping existing homeowners restructure their mortgages as lockdown conditions impact businesses’ ability to operate.

Cost of borrowing

The good news is the cost of borrowing is historically low with the Reserve Bank Governor, Adrian Orr, committing to keeping the OCR rate of 0.25% at that low level for at least the next year.

The Reserve Bank is also proposing removing loan to value (LVR) restrictions for at least a year. The proposal, going through a seven day consultation period, would mean that banks will not have to hold first home buyers to come up with 20 % house deposits. The bank has said the main reason for lifting the restrictions is to help homeowners looking to defer mortgage payments and small business owners using equity in their homes to stay afloat.


Private viewings of rentals are allowed once more, by appointment, with up to two people from an extended bubble and one property manager. These can only happen when the current tenants are away from the house and visits must be spaced apart in time to allow for time to sanitise after the previous appointment. Again as with homes for sale, attendees must wait in their cars until you are told the home is ready for entry.

Photography and videography of rentals are to be carried out remotely by the landlord or tenants where possible. Photographers or videographers who go to the home must adhere to COVID-19 health and safety requirements.

Management and tenancy agreements

Negotiating and executing agreements must be contactless and must be explained over the phone or virtually. Appraisals must be carried out remotely where possible with physical appraisals to happen at Alert Level 2.

Tenants can give notice on their rental contracts and they can move from their rental home under Level 3. Tenancies cannot be terminated unless there are special circumstances and this applies for three months from March 26.

Landlords should arrange for professional cleaners to make a vacant rental property ready for new tenants. At the end of the tenancy, rather than the landlord and tenant doing the final property inspection together, which is what usually happens, it’s recommended the tenants take photos of the property’s condition before leaving.

The rental freeze on rent increases remains in place as it was made for an initial six months.

Routine inspections weren’t allowed during Alert Level 4 and will continue to be prohibited at Alert Level 3. These should be completed remotely in agreement with the tenants or be rescheduled. In-person inspections can only happen in an emergency.

For three months from 26 March 2020, landlords can’t apply to the Tenancy Tribunal to end the tenancy for rent arrears unless the tenant is at least 60 days behind in rent.

Home maintenance

Both urgent and now routine maintenance visits to homes will be allowed at the new alert level with plumbers, electricians and similar, taking care to keep the required 2m safe distance from those in the house. Ideally occupants will leave the home during their visit.