Two weeks ago, the 18-month buyback rule kicked in in Queensland. One law firm, MinterEllison, processed 100 buybacks on that one day, which cost their clients at least $30 million.
The next day they were processing more – and they are just one law firm in QLD.
Discussion is that over $100 million in buybacks will be required by December 30.
Across in SA their 18-month buyback term starts in the next month.
MinterEllison’s Robin Lyons and Tammy Berghofer presented at our Brisbane Village Manager Professional Development roadshow; their presentation was titled ‘Regulation Jeopardy’.
They bluntly said the sector is at ‘one minute to midnight’; regulators will be deciding the future of the sector, not the operators (or the customer) if the sector sits and simply waits.
State regulators are cherry-picking from other states and rapidly implementing new rules for the sector; they note NSW has announced the idea of introducing 6-month buybacks for metro villages and 12 months for regional villages.
Robin Lyons asks, ‘has the horse bolted’? He points out the large public operators and some large Not For Profits offer six-month buybacks thanks to balance sheets that small operators and small Not For Profits have little hope of matching.
It’s the question sector operators must ask. And residents.
Both Aveo and Stockland will likely have large institutional or private equity investors backing them and supporting their balance sheets soon.
This will make it easier for regulators to ‘standardise’ the sector to the big business model.
Will this forever diminish the soul and the value of villages for operators and residents? The answer is ‘yes’, and Minter’s call is for the sector act now or live with the consequences. See next story.