The global real estate industry has had a shake-out by anyone’s reckoning. Like a sideways slide on a surfboard without a fin, property prices have been caught in the white water of the 2008 tsunami. As in any ‘disaster’ the real estate industry has had its survivors. Those who have kept their balance have managed to keep their heads above water, overcoming enormous odds.
There is a bright side to the whole affair and the good news is that people don’t stop occupying properties: those who don’t buy rent. Astute agents quickly realised this and moved into the rental markets. It may not be ‘easy’ money, but it certainly provides the bread and butter and pays for the basics.
The other aspect that benefitted those who had made a career out of real estate was the cleanout that invariably happens during a downturn. Let’s be honest here, the industry was at a place that it didn’t want to be. Untrained agents and fly-by-nighters with little or no real estate education all jumped on the bandwagon during the boom. In an effort to open up the industry to all, the powers that be had dropped the board exam which triggered the flood gates. At one stage, it was widely punted that all you needed was a cell phone and a car to become a successful agent – mayhem ensued.
It’s not clear how much damage was done to the industry’s reputation by those who should never have been allowed to practice in the real estate arena. However, it is pretty clear that those who are left have borne the brunt and have been left to pick up the pieces and repair the tarnished image that has dogged the industry ever since.
The good news of course is that those who thought that selling property was child’s play and who were only in it for the money, have gone and what is left is a group of people who are determined to uplift the industry to new heights. There have been hiccups along the way, the Estate Agency Affairs Board has certainly not played it part to the full and is seen by many as being in complete disarray. However, the recent shake-up within the authority holds great promise and has to be viewed as a positive sign.
So where to from here? It appears that the stagnant cloud is lifting and there are clear signs that the financial institutions are moving beyond the speed wobble they encountered on the back of the 2008 wave. Many sellers who have had their properties on the market for months if not years have adjusted their profit expectations and have at last realised that property is a long-term investment.
Those involved in the real estate industry who are strong enough to paddle out again may be treading water at the moment - but the next set of sales are on the horizon.
While disposable income may be down, well-trained estate agents will point out that spending money on where you live is short-term pain for medium-term gain and those who don’t buy at the bottom of the market are not going to maximise their profit.
Agents have never had more stock than is currently available. It is not hard to find the right house for a buyer. Yes you may have to do some negotiating, but there is certainly no lack of choice available. As rental prices are pushed up by demand, fence-sitters are ready to be pushed off their perch into a buying position. Well trained agents will know how to deal with that.
That it seems is the key. South African agents are now better qualified than they have ever been in the past. Thanks to the educational requirements the industry will never be inundated with those who view property sales as a lucrative hobby.