Victoria’s property sector has expressed frustration as the state enters its sixth lockdown at a time when businesses are struggling and Melbourne’s office market demand has plummeted.

As the state has recorded eight new COVID cases on Thursday – suspected to be the Delta variant- Victorian Premier Daniel Andrews announced a snap seven-day snap lockdown.

Under the restrictions:

• There are five permitted reasons to leave home: getting food and supplies, authorised work, care and caregiving, exercise for up to two hours with one other person, and getting a COVID-19 vaccination. Shopping (where possible) and exercise are limited to five kilometres from your home.
• No private or public gatherings are permitted, with the exception of intimate partners and ‘single bubble’ visitors.
• Authorised on-site work will include building and construction work, but real estate inspections will not be permitted and auctions will move to online only.
• Schools and higher education will move to remote learning on Friday, except for the children of authorised workers and vulnerable children. Childcare will remain open.
• Non-essential retail will move back to a ‘click and collect’ model and cafes and restaurants will operate as takeaway only. Essential shops and services including supermarkets remain open.
• Masks must be worn inside and outdoors, except within your own home.

In an important win for the construction sector, building and construction work will be able to proceed on unoccupied sites.

For occupied sites, however, work is not allowed except for that which is required for emergencies.

Meanwhile, display homes, sales suites and colour selection centres need to close whilst client site inspections are not allowed.

The lockdown comes amid confirmation of the impact which six lockdowns have had on Melbourne’s commercial property sector.

Releasing its latest Office Market Report, the Property Council of Australia said record-low levels of demand have pushed office vacancy rates in the Melbourne CBD to a 20-year high.

All up, the city’s office market had a net absorption of minus 96,635 sqm during the six month period spanning January 2021 until July 2021.

This represents the largest decline in office demand on record throughout more than thirty years of Property Council data.

As a result, vacancy rates in the Melbourne CBD increased from 10.4 percent in January to 12.4 percent in July – the highest level of vacancy on record since January 2000.

Across the six-month period, Melbourne was the only city to experience a decline in tenant demand.

Property Council of Australia Victorian Executive Director Danni Hunter expressed frustration at the lockdown and said the Victorian Government needs a long-term plan to revitalise Melbourne.

Hunter says the role of vaccination should not be underestimated.

“That we are re-entering lockdown just a week after we emerged from the last one shows how vulnerable our community is as we continue to deal with outbreaks,” she said.

“It again reinforces that there is only one pathway out of this pandemic and that is vaccination.  We have a collective responsibility to roll our sleeves up so we can look forward to the day when we can put lockdowns behind us.

“Repeated lockdowns have devastating impacts on the community including business and only serve to set our economic recovery back further. Nowhere is this more apparent than in our CBD which continues to haemorrhage and businesses are being pushed to the brink.

“Office vacancies in Melbourne are at their highest level in over 20 years and office occupancy continues to plummet with catastrophic repercussions for business and our iconic retail and hospitality sectors in particular.

“Every lockdown is a step backwards for Melbourne, particularly our CBD, and we are going to need a strategic, long-term plan to revitalise our city. This needs to focus on getting people back into the CBD when it’s safe to do so as they are the lifeblood of our city.

“We will also need to look at ways to boost investment and ensure Melbourne remains an attractive place to live, work and invest. It’s one thing to have a survival plan but we will also need a revival plan.”

The lockdown happened as eight new cases of COVID were reported on Thursday.

Victorian Premier Daniel Andrews said the decision to lock down again has been difficult.

“I can’t tell you how disappointed I am to have to be here doing this again,” he said.

“But with so few in the community with one vaccination, let alone two, I have no choice but to accept advice, and we collectively [have] to make this important decision to keep Victorians safe.

“The alternative is we let this run … away from us and our hospitals will be absolutely overwhelmed [with] not hundreds of patients but thousands.”

However, Matthew Kandelaars, Chief Executive Office of the Urban Development Institute of Australia (UDIA) Victorian Division, welcomed the decision to enable construction to remain open.

“The urban development industry is a fundamental component of the Victorian economy, employing 300,000 Victorians, with approximately 194,000 of those jobs in residential construction. In 2019-20, residential construction expenditure generated $25.5 billion in the Victorian economy,” Kandelaars said.

We’re pleased the Victorian Government recognises the importance of the continued operation of the industry, as well as the fact that the industry has proactively ensured best practice COVIDSafe procedures through the course of the pandemic to keep its people safe.”