December 2011
A recent survey conducted by Columinate on behalf of Private Property, entitled Project Front Door, has revealed some interesting results. Perceptions are always a little dangerous in business and it would appear that some facts that we have taken for granted for years, have in reality, changed over time.
For example, estate agents have always believed that a property situated near schools will, generally speaking, command a higher price simply because of its location. The survey, however, tells a completely different story and only one percent of the 400 respondents noted that the position of the property in association to an educational facility was important.
South Africans, it seems, are far more concerned about crime levels in any given area and 21 percent of those surveyed said that this factor played a significant role when deciding to invest in property. The security aspect was deemed far more important than the current price as well as the value of the property in the future.
The data that was collected between 31 October and 7 November this year involved people over the age of 16, from all race groups. The survey covered a wide number of topics, including general property search behaviour, aspects that the respondents found stressful when either buying or renting a property and their perceptions of estate agents.
Justin Clarke, chairman of Private Property, says that the survey was commissioned as part of the group’s on-going efforts to determine what the general public fear and love about the buying or renting process. “One of the most surprising facts that came out of the survey was that, despite the current economic climate, owning a property in South Africa was still perceived to be a great investment by a large majority of the respondents. A total of 74 percent of those canvassed classified property ownership as a very good investment. The figure was even higher amongst those who rent property, with a staggering 93 percent of tenants saying that they would prefer to buy regardless of the prevailing economic conditions.”
The situation as it presently stands is clearly unbalanced. The research shows that, while a large majority of tenants want to invest in property, many are unable to get onto the property ownership ladder. Clarke says that these facts clearly indicate how the cost of financing and the difficulties associated with obtaining bank finance have put a damper on the market.
Estate agents also came under the spotlight with only five percent of the people surveyed indicating that they trust estate agents. Interestingly enough, however, 48 percent believed that there was a better chance of selling the property if more than one agent was marketing the home, while 16 percent believed that giving an agency a sole mandate would negatively affect the sales price.
Although 39 percent of the respondents believed that agents were knowledgeable, a whopping 44 percent did not believe that agents were trustworthy and 80 percent thought agents were unreliable.
There were a number of areas where those polled believed that agents could improve, including being more honest with regard to the overall state of the property. A total of 30 percent thought that agents should be more honest as to the true condition of the property and more attentive to people’s needs as opposed to being purely focussed on the sale. Surprisingly, only seven percent of people believed that agents should lower their commission, highlighting once again that consumers are prepared to pay for good service.
It appears that the way that people search for property has, thanks to technology, changed over the years. The respondents indicated that they prefer searching a property website, such as Private Property, first when looking for property to buy or rent. The price of property in an area is an important motivating factor when deciding on the location. Being close to friends and family is not very important to them. Many respondents spontaneously mentioned that they are concerned about the crime rate and the security presence in the area in which they are looking to buy or rent. Overall, very few of the respondents regarded themselves as property savvy, which suggests that more needs to be done to educate both those who were considering investing and tenants who leased property.
The report highlighted that regardless of the economic climate, those who took part in the survey preferred buying to renting property. This theme prevailed throughout the report, as respondents view buying property as a good investment and make more positive associations with it compared to renting property.
Written by Lea Jacobs for Business Day Home Front