The 18-month buyback rule was a direct outcome of the Four Corners program on 27 June 2017 (23 months ago this week). Until then village sales were strong.
Sales crashed as trust evaporated.
Villages with vacancies means a slower inflow of new residents that add vibrancy to a community. The operator’s profit is hit, which directly hits reinvestment in the village and being able to partner with residents in new initiatives. And residents grow concerned about the value of their home.
At the same time the banks are looking at the operators and their diminishing bottom line and asset value.
Resident concern then fuels government inspection and new regulations – ‘regulation creep’ – which further undermines the business of villages.
An operator buying back homes will not have money to replace the village bus.
Now the QLD Government is about to introduce restrictive village redevelopment regulations which MinterEllison describes as:
“Complex, time consuming and does not give operator certainty that once approved, (the) operator can implement redevelopment in the village”.
With 60% of all villages aged 25 years and older, the first losers will again be current and future residents.
At the same time every operator with an older village will see its value drop, probably significantly.
The message? Both residents and operators will lose without a cohesive message to governments.