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SA property industry faces serious challenges from within

by Media Xpose

Valerie Munro Kieswetter, owner and founder of Business Unlimited, talks to SA Business Integrator about issues facing the property industry in South Africa.

What are some of the key governing issues facing the property industry in South Africa?

The incompetence of the Estate Agency Affairs Board (EAAB) and now the Property Practitioners Regulatory Authority (PPRA). Fraud and corruption at the EAAB in the past implemented laws such as “no valid FFC, no commission, no payment”, but the board always had issues tying up payments and communicating delays about issuing valid FFCs, causing agents to act illegally. As of 1 February 2022, the EAAB was replaced by the PPRA.

Over the years there have been some “fly by night” real estate agencies that have popped up. What has the impact been?

The public has lost trust and respect for the industry, causing huge financial difficulties for the honest agencies, and serious daily challenges.

What steps need to be taken to ensure the integrity of the sector?  

The public needs to be made more aware of dealing with valid and trustworthy registered estate agents. Name and shame the culprits and refrain from working with them in the future. There seems to be no consequences for the “cowboys” in the industry; proper training is imperative and CPD points must be earned by all parties concerned. Inspectors also need to pay visits to estate agencies more frequently.

Do any of the governing and affiliate bodies impact proactive change within the property industry?

We have the Institute of Estate Agents of SA (IEASA), established 1997, and the Real Estate Business Owners of South Africa (REBOSA) for business owners, established in 2012. There is also the rental tribunal for tenants which was established 2001.

Who needs to be part of these bodies and how important is it be members of these structures?

IEASA – all principals and estate agents working in the industry. It is important to stay informed. REBOSA employers need to look after their business interests too.

With recent repo hikes, a struggling economy and loss of jobs, how do you see the property sector being impacted for 2022?

The hybrid model of working is negatively impacting the sale of commercial property. However, since the coronavirus seems to be more under control, incentives have begun to disappear. In my experience, things will return to normal, although with fewer people in the office, companies will recalibrate the amount of space they need. As a consequence, the reduced demand for office space will reduce the building market value, which is dependent on leasing revenue.

Does it make sense to invest in hybrid property models i.e., commercial and residential mixed buildings?

Yes, as for landlords positioned in such situations, and with foreclosure on the horizon, repurposing the building for housing may be the best viable option.

Even with repo rates increased, interest still remains lower than before. What are the opportunities for the property sector?

Interest still remains much lower than it was in the 1990’s (25%). However, a property always remains a good investment and with the more people working remotely from home, the need is still there. You will always have the capital growth.  

What are some of the trends you are seeing, and how can the property sector capitalize on this?

With regards off-grid buildings, they are very expensive and it’s not always possible to go off the grid. ‘Semigration’ trends, however, are looking up.

Recent events appear to have played into the hands of the Western Cape Province, setting it up for future economic growth and prosperity. The WCP’s ability to attract ‘semigrant’ skills and purchasing power crucial for economic and growth, has recently been enhanced and rental and sales are increasing.

(Ed’s note: Semigration or semi-emigration is the act of moving to another location within your home country.  Semigration is distinguished by the motivating factors behind the relocation.)

Is there a role the private sector can play in partnership with government to help tackle this?

Yes, but only if the current government ceases all fraud and corruption. 

How are the real estate fees paid to government used?

The estate agent board was established to protect the public against fraudulent estate agents. The EAAB is also a supervisory body of the estate agency profession and responsible for preventing, identifying and reporting money laundering and terrorist financing activities in the estate agent sector.

What are the opportunities stemming from public/private partnership for the industry to positively impact the public?

To Increase transparency in the use of funds to avoid corrupt practices.

What are some of the key factors hindering women in terms of leadership with the property industry?

When you are a woman in most industries and sectors, you tend to work twice as hard as your male counterparts to prove that you are capable. The real estate companies are mainly male dominated. You need to stay focused, stay on top of latest trends and try and refrain from getting emotional when making decisions.

There are many opportunities for women in the property industry, from interns, full status agents, and principals, to trainees and developers in the rentals, sales, commercial and residential sectors.

You recently established a training academy. What was your rationale for this, and the importance of SETA-accreditation?

To develop and grow young and upcoming people. Knowledge is power. One cannot empower a nation without education and training. Training that is not SETA-accredited have no credibility. That’s why our training academy TCG Training is SETA registered.

A training programme that prioritises personal growth, helps you feel more empowered and confident in your business, which can translate to your profits down the line.

Unlike traditional training, transformational training does not overload learners with extraneous details while they are trying to learn.

You are director and co-founder of numerous businesses – why was it important for you to diversify?

I firmly believe that in today’s uncertain times you must not have all your eggs in one basket.

What are the next steps in your opinion needed to strengthen and unlock opportunities within the property sector? 

Eliminate the incompetency of the PPRA to allow better service to the public. The billions in PPRA kitty could also be used to build low-cost homes, houses and flats.

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