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The business-focused design of Prime Minister Scott Morrison’s JobKeeper package won’t be enough to stop real estate agencies from feeling the pinch down the track, a principal has warned.
In light of the significant downturn in real estate exchanges currently affecting Lloyd Allen, the Better Homes and Gardens Real Estate Crows Nest principal, who has indicated that, like all principals, he is concerned about the financial position of his agency in four to five months’ time.
While there has been hope pinned on government intervention, Mr Allen has identified a gaping hole in the JobKeeper scheme passed through Parliament on Wednesday, 8 April.
He has acknowledged that to qualify, “a business must show a reduction in revenue of 30 per cent calculated from the figures provided in the BAS returns that are submitted to the ATO”.
For most businesses, he concedes it’s “a good arrangement”.
However, for the real estate sector, he expressed a belief that “it’s problematic and of little benefit”.
Drawing on his own situation, Mr Allen said his agency has had three settlements in March, will have four settlements in April and two in May.
“After that I have no settlements booked in, and regrettably very little opportunity of achieving any further exchanges in the immediate future,” he said.
He outlined that his revenue, for the months where the JobKeeper allowance applies, “is strong” — it was generated months ago when there was no crisis.
It certainly won’t fall by the required 30 per cent, he admitted.
When he does get to the stage of having no settlement revenue, Mr Allen has predicted his revenue to fall by about 75 per cent, with limited revenue still rolling in from the rent roll.
He stated that such a drop “will present a major hurdle for us”.
“However, when our agency is impacted by this fall, in four months or so, the scheme will be coming to an end.”
According to the principal, “it would appear that there is no plan in place to help agencies that allows for this time of difficulty”.
One solution proposed by Mr Allen to remedy the situation would be an extension of the JobKeeper allowance by another three or so months, “expressly for real estate agents only as we won’t have access to its benefits when we need them most”.
ABOUT THE AUTHOR
Grace Ormsby
Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.
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