- Some 46 000 property practitioners are represented by the National Property Practitioners Council, which has welcomed the real estate sector’s return to activity.
- The NPCC says the sector is confident it prepared for a safe return with less human contact than many other sectors.
- The stalling of real estate affected many downstream activities like removal companies and artisans.
- Moreover, agents are commission earners and did not qualify for UIF or other relief.
As tens of thousands of property practitioners in South Africa return to work, the real estate sector is confident it can operate safely.
And it is particularly relieved it can return to work as many of those who could not work under lockdown were commission earners who did not qualify for UIF or other forms of relief.
This is according to Vuyiswa Mutshekwane, who is chair of the National Property Practitioners Council (NPPC) and also the CEO of the Black Property Practitioners (SAIBPP).
Mutshekwane says the sector prepared for a safe return and her confidence is due to measures recommended by the council. Moreover, she adds, the real estate transaction process requires little human interaction compared to other sectors that can operate at Level 3.
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No UIF, no other relief
Around 46 000 property practitioners in SA who are represented by the council have not been able to earn an income since the lockdown came into effect at the end of March.
A return to work for real estate also means a return to work for many downstream activities and sub-sectors linked to real estate like removal companies, artisans including electricians and plumbers, and valuers.
The NPPC is a forum for industry bodies representing the interests real estate agents, brokers, professionals, consultants, developers, managing agents, and financing institutions falling within the ambit of the Property Practitioners Act, which is replacing the old Estate Agents Affairs Act of 1936. The new act broadens the definition of what a property practitioner is.
As independent commission earners, agents do not qualify for UIF or any other relief benefits
The members of the NPPC include all the major national industry bodies including: South African Institute of Black Property Practitioners (SAIBPP), South African Property Owners Association (SAPOA), Real Estate Business Owners of South Africa (REBOSA), National Property Forum (NPF), National Association of Managing Agents (NAMA), Institute of Certified Business Brokers (ICBB), South African Institute of Auctioneers (SAIA), Institute of Estate Agents of South Africa (IEASA), South African Business Broking Association (SABBA).
“We are pleased that the National Coronavirus Command Council has heard our concerns and given the real estate sector the greenlight to resume operations.
“As independent commission earners, agents do not qualify for UIF or any other relief benefits so relaxation of the lockdown restrictions means that many real estate companies facing the imminent risk of collapse can potentially be saved,” says Mutshekwane.
“The re-opening of the sector will also inject much needed liquidity into the market which is an urgent need whose importance cannot be over-emphasised. Property owners can now trade their biggest asset and unlock much needed capital to fund business activities.”
Not out of the woods
Alternatively, given the challenging economic climate, many homeowners can look at downscaling to more affordable properties.
The industry is, however, not out of the woods yet. There are still a lot of challenges relating to getting properties transferred at deeds offices, which are not yet functioning optimally.
The industry is, however, not out of the woods yet. There are still a lot of challenges relating to getting properties transferred at deeds offices, which are not yet functioning optimally.
In Mutshekwane’s view, this brings to light the urgency of digitising the deeds process.
She says feedback trickling in so far from the industry value chain indicates that bond originators are already getting enquiries and deals are coming through.
“This tells us the market is moving again. The industry anticipates movement in the near future, but not back to normal. The pandemic and lockdown were obviously a big blow for the industry,” she says.
“There is, however, optimism that over next six months can see transactions picking up again though not as same levels as before the lockdown and pandemic.”
Too early to tell
Dr Andrew Golding, chief executive of the Pam Golding Property group, says it is far too early after the start of lockdown Level 3 to tell exactly where the market is.
“While all health precautions are being taken, it will just take some time for sellers and buyers to adapt to the new environment. We believe there is a genuine appetite among both buyers and sellers to transact, with certain sectors of the market very busy,” he says.
Samuel Seeff, chair of the Seeff Property Group, is pleased that buyers can now at least go and view properties, which means transactions can move forward. At the same time, challenges with deeds offices remain.
“Overall, the market will be heavily affected in terms of sales volumes and prices. While we expect a level of activity and pent-up demand in the sub-R1.5 million (up to R3 million in some areas), it will take time for sales volumes and prices to pick up,” says Seeff.
Overall, the market will be heavily affected in terms of sales volumes and prices
“There is no doubt that the challenging road ahead for real estate will mean that real estate businesses will be looking to streamline their operations and cutting costs where they can. This will include adopting greater digitalisation and efficiencies.”
Furthermore, he does not expect a large exit of estate agents, rather that most agents will accept lower earnings for a while until the market picks up steam again.
Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa, says, understandably, their registered sales are at the lowest they’ve been since 2011. So far this year, their registered sales have dropped by 30% on the figures for the same period last year, yet its agent growth rate is the greatest it has been since 2016.
In the view of Berry Everitt, CEO of the Chas Everitt International property group, in the post-lockdown market, there will be exceptional opportunities for property buyers, sellers and estate agents.
This is despite the impetus that is usually provided by exceptionally low interest rates likely to be somewhat dampened by greater uncertainties around employment, affordability and bank lending.
He believes the pandemic has shown consumers that they do not just want to be “a number” getting a generalised service in an automated system anymore.
“They want to connect with a human who listens to and understands their particular needs – and then is able to access superior technologies to really help them save time, money and inconvenience,” says Everitt.
Furthermore, he foresees more scope for industry mergers and acquisitions over the next few months and “more movement among top professionals who are seeking to join forward-looking companies with good leadership”.
