Real Estate Industry Needs To Transform!!

The real estate industry is lagging on transformation, despite it being one in which entrepreneurship can thrive without much reliance on external funding. Fundamentally it is the process of negotiating a deal that costs the agent little more than time. There are advertising and operational costs, but the deal-brokering process is essentially free. In a country where jobs are few, entrepreneurial activities must be encouraged. For this to happen, South Africa must create an environment where establishing your own business is both simplified and readily accessible. Counter to that is that education and strict practice guidelines are critical to success.

True transformation is not about replacing existing white agents and principals with black ones. It is about creating more opportunities for black agents to thrive. It is about adding to the industry, not taking away from it. While in no way undermining transformation, it must not take centre stage to the exclusion of other critical issues. Non-compliance and malpractice should also be heard of the Estate Agency Affairs Board’s (EAAB) priority list. Black-owned real estate businesses are intrinsic to transformation while also creating the platform for the unemployed to upskill and find work. Yet, inherent in this is integration driven by the large franchises and groups nationally to encourage business development.

Like it or not, the decision-makers cannot escape the fact that the industry is already over-regulated. It is hard enough for existing agents to earn a living without still creating opportunities for new entrants. Essentially they are being asked to smile while an already stagnant market is further diluted. More broadly, a less regulated economic environment will encourage large companies to support independent black business owners wanting to operate under their auspices.

The key lies with government and the regulation of private business ownership. In the spirit of real estate reform, now is a good time for the EAAB to engage with the government and land ownership. A large percentage of South Africans live on state-owned land and the government has to effect a process whereby these tenants can become owners. However, the crux of successful home ownership and the industry broadly is competent financial management skills.

There is scope for purchasers, regardless of race, to attend financial management courses before assuming the weighty mantle of first-time home ownership. As more black people become property owners, there will be increasing demand for agents from their culture who speak their language. For the playing fields to be level and fair, not to mention in line with the new Consumer Protection Act whereby consumers have the right to receive and comprehend legal agreements in a language they understand, the EAAB must ensure official documentation and training material is available in all major languages.