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Private Property South Africa
Property Professional

The transformation process may have got off to a slow start, but things are going to start heating up in the real estate industry with a proposed new Property Charter on the cards.

It’s clearly evident that government is unhappy with the lack of transformation. What can be done and how easy is it to implement change during a downturn?The fact that black people were, by law, barred from owning property before 1990 has directly impacted on the number of previously disadvantaged people currently practising as estate agents in South Africa. It’s been 15 years since the country became a democracy and while more black agents have joined the ranks, the numbers are still way below government’s requirements and a new Property Sector Charter has been drafted. Aimed at correcting the imbalances of the past, the new draft addresses a number of transformation issues and although it still has to be gazetted, once implemented it is set to change the face of SA property.

Given that South Africa’s property market, like the rest of the world, is going through a particularly difficult patch, how easy is it for black agents to succeed and is enough being done to help them get started?

Kura Chihota, an executive director with the Leapfrog group who joined the industry in 1996 says that any agent, regardless of colour, is going to face challenges when first entering the profession. However, he says that unlike white agents who had the advantage of having an informal apprenticeship from their parents, who bought and sold property, black agents started their property education at a much later stage.“Another issue that had a direct impact on the success of black agents was where they operated. Real estate is always a local ‘game’ and the areas where most black people grew up and where they naturally would likely start their businesses are sparsely traded. Whereas ‘white’ areas trade every seven years, township properties trade closer to once every 20 years.”There may be some good news on the horizon.

Figures released in a recent report by the Affordable Housing Data Centre indicate that 3.5 million of the country’s residential properties fall within the affordable category. In real terms this means that 58% of South Africa’s properties are priced under R500 000, 47% of which, are in former townships.Interestingly enough, since 2004, an average of 70 000 affordable units under R500 000, including state-subsidised properties have been registered at the Deeds Office on a yearly basis. This is five thousand more than the 65 000 registered that were sold for amounts exceeding R500 000.Jaco Rademeyer, who was recently named as Nedbank’s Property Professional of the Year, believes that it is difficult for black agents to break into the property industry. “I currently employ 11 previously-disadvantaged agents, most of whom have never owned property before. Very few had any understanding of what the selling process entailed before they started working in real estate, and the fact that the industry has no income guarantees proved problematic.”He says that mentoring means far more than just employing agents and leaving them to their own devices. “Not everyone is suited to selling and I have focused on retaining the services of people who show the skills needed to be successful.

These include being presentable, having good communication skills, the ability to work hard and a passion for real estate. “Understanding the needs of a new agent has also played a role in the success of the programme. At this stage we provide set-up costs which covers the costs of boards and business cards as well as offering a monthly retainer. The agents have also been enrolled into a training programme with Ditasa, to ensure that they become correctly qualified with the required qualifications.”He says that any agent entering the industry needs to understand that working in the real estate industry is not a get-rich scheme. “I work very closely with all my candidate agents and they soon realise that while the money may have been the initial attraction, it takes a tremendous amount of hard work and continual effort to become a top earner.Bruce Swain, the MD of the Leapfrog group says the recession as well as the higher educational requirements has played a role in suppressing the number of people who are entering the field. However, the latest initiatives implemented by Services Seta and the Estate Agency Affairs Board, particularly around education and training, will assist in attracting and retaining black agents.While it may not have been the norm for a white buyer or seller to utilise the services of a black agent in the past, this is beginning to change. Swain says that in the metropolitan areas at least, the clients are more interested in dealing with an estate agent who is professional, ethical and who can satisfy their property needs. “As a result, we have many black agents who deal successfully with white buyers and sellers.

If the racial barriers between the main players are beginning to tumble, then why are more black agents not entering the industry?

In Chihota’s opinion, the industry can only do so much and create an environment conducive to encourage previously-disadvantaged individuals to enter the industry. “Real estate is an entrepreneurial activity and entrepreneurs succeed despite obstacles. I believe the biggest contribution that the industry can make is to give black agents the chance to try their hand. They may stumble, but they will learn and grow. Just as there is no predictive gene for successful white agents, it’s only when the agent is up and running with the adequate support that one can spot the real gems.Peter Gilmour the chairman of RE/MAX of Southern Africa says that embracing black economic empowerment initiatives is essential for any company operating in South Africa today. “From the beginning we set out to attract the top real estate professionals in every market. In addition to offering the provision of superior services, benefits and technology, we also offer our agents one of the best training programmes in the world. This initiative is available to both new and experienced agents and has shown phenomenal results since its launch.” He says it is the provision of these services that has led to 25 franchises being owned or managed by previously-disadvantaged entrepreneurs and over 200, experienced, productive previously-disadvantaged agents working within the group.

Many independent agencies may argue that it is easier for the larger groups to empower agents, but should this be used as an excuse for the lack of transformation?

Rademeyer says: “While I can’t speak for other agencies in South Africa, to my knowledge I am the only principal in the Port Elizabeth region that has implemented a transformation programme. I believe that while there are still many obstacles to overcome I am hoping that other, smaller agencies, in the area will follow my example and initiate similar steps to empower agents of colour. The rewards of transformation on a personal level are tremendous: watching someone grow, understand the ins and outs of the industry, and go on to become successful are well worth the time and effort required. Nomonde Mapetla, the CEO of the Estate Agents Affairs Board, says that when she joined the industry statistics showed that 96% of real estate players were white and only four per cent were black. At this stage 90% are white and 10% are black. She says that the board has set a target of 25% of the industry being black by 2015.According to the new Property Sector Charter any agency earning R1m or above in a financial year or employing five estate agents qualifies under the PSC. As such, each agency will have to submit a BBBEE report, including a scorecard verified by an accredited BEE verification agency, as well as an account of progress in achieving the qualitative undertakings annually to the Charter Council.Those who are not yet familiar with the PSC should take the time to read it. The consequences of ignoring the document could be severe.Article courtesy of

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