Dreary house price growth hits real estate agents

Another year of lacklustre house price growth has provided the backdrop for a gradually tougher climate for the real estate industry.

“As with 2011, property prices are just holding their own which impacts on agents’ commissions,” according to Herschel Jawitz, chief executive of Jawitz Properties.

“Unlike other industries where professional fees are charged, our commission doesn’t go up with inflation each year. The only ways our earnings increase is if property prices increase, or we sell more properties.”

Jawitz said that if property prices only went up by 2% or 3% in 2012 then, in real terms, commission earnings would decline. “Added to this, costs are increasing by at least 10%, and the equation becomes interesting. Normally, if you are sacrificing margins you can try to make up the numbers with higher volumes but the numbers of sales for the most part are going to be flat year-on-year and, in some areas, may even decline.”

Essentially, fewer sales, flat prices and homes taking longer to sell equated to estate agencies spending more money with less return.

Jawitz said that because of these factors, 2012 would be another very competitive year for the industry, as growth would have to include taking market share from competitors. “The bigger brands should be better off by the end of the year,” he said.

The decline in the number of estate agents supported this view with the fall off in agents coming mostly from the smaller agencies that had not been able to sustain themselves in a challenging market. The number of estate agents had decreased by 60% since the height of the boom in 2006/7 to about 25 000.

According to Jawitz, most of the bigger national franchised brands or the larger brands in the metro areas had fared significantly better in this period and while absolute market sales might not have been increasing, relative market share would have grown.

Key success factors for 2012 would be similar to many industries — meeting clients’ service expectations, employing technology as a critical enabler and most importantly, upholding the integrity of the brand and the people that represented it. — I-Net Bridge

PW Botha wagged his finger and banned us in 1988 but we stood firm. We built a reputation for fearless journalism, then, and now. Through these last 35 years, the Mail & Guardian has always been on the right side of history.

These days, we are on the trail of the merry band of corporates and politicians robbing South Africa of its own potential.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.


In East Africa, the locusts are coming back for more

In February the devastating locust swarms were the biggest seen in East Africa for 70 years. Now they’re even bigger

Western Cape Judge Mushtak Parker faces second misconduct complaint

The Cape Bar Council says his conduct is ‘unbecoming the holding of judicial office’

‘My biggest fear was getting the virus and dying in...

South African Wuhan evacuee speaks about his nine-week ordeal

Border walls don’t stop viruses, but a blanket amnesty might

Why South Africa should consider amnesty for undocumented migrants in the time of the coronavirus outbreak.

Press Releases

The online value of executive education in a Covid-19 world

Executive education courses further develop the skills of leaders in the workplace

Sisa Ntshona urges everyone to stay home, and consider travelling later

Sisa Ntshona has urged everyone to limit their movements in line with government’s request

SAB Zenzele’s special AGM postponed until further notice

An arrangement has been announced for shareholders and retailers to receive a 77.5% cash payout

20th Edition of the National Teaching Awards

Teachers are seldom recognised but they are indispensable to the country's education system

Awards affirm the vital work that teachers do

Government is committed to empowering South Africa’s teachers with skills, knowledge and techniques for a changing world

SAB Zenzele special AGM rescheduled to March 25 2020

New voting arrangements are being made to safeguard the health of shareholders

Dimension Data launches Saturday School in PE

The Gauteng Saturday School has produced a number of success stories