With uncertainty still hovering over sectors of Australia's real estate industry as a result of Covid-19, WILLIAMS MEDIA spoke with HoldenCAPITAL's Dan Holden about the impact of the pandemic on property development.

What has been the mood among the developers you have spoken to regarding the current climate?

Most developers are level headed about the crisis, with many seeing the opportunities as opposed to the downsides

Lenders seem to have the biggest knee-jerk reaction to this.

Banks are taking a lot longer to get anything done and increasing terms of entry.

Do you think the dust is beginning to settle a bit at this point? 

Although virus cases seem to be easing across the last week and a half, the knee-jerk reaction to shut up shop or constrain lending hasn't gone the other way yet.

I hope that it does but so far we haven't seen any lenders say 'hey we are back open again'.

What would your advice be to anyone thinking of borrowing money at the moment?

Plan ahead. A lot of developers are used to getting good service and things being turned around in 2-3 weeks but if you have a development project finishing in the next 2-3 months that requires residual stock funding, now is the time to get it in place.

Even things as simple as ordering an evaluation seem to be taking a bit longer at the moment, so it's important developers are conscious of timelines.

Otherwise, you end up paying a higher cost to get something done quickly.

How do think the different property sectors are coping with the challenges of the current climate? 

The retail and office industries are definitely in a world of hurt, with tenants seeking the maximum rebates that are available.

Everyone is disjointed and fragmented across the country, with aged care also feeling the hurt.

In terms of residential, which makes up about two-thirds of the projects we fund, there hasn't been too much drama or fuss yet. We haven't seen any settlements fall over in the projects we've funded the construction of, although there has been a couple of delays.

Do you think the different levels of government are doing enough to assist the development sector through the pandemic?

I think keeping construction open was definitely a big win for our industry. If construction sites shut down, it would have had a much larger impact.

With things as they are, we may have got away with seeing none of the sites we are involved with close. 

Some projects require up to 200 people a day on the site, albeit on different levels for a high-rise project, which could have potentially been difficult to navigate with the social distancing restrictions, but so far it doesn't seem to have affected the industry too badly.

How do you see the road back for the country's property sector?

I think the construction industry is through the worst of it without losing too much time, and the residential projects already underway seem to be ticking along.

With retail, office, and also potentially industrial, there are businesses hurting and tenants aren't taking on new space which has a flow-on effect.

The aged care sector could also be impacted for a longer time to come.

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