PROFESSIONAL THE SOUTH AFRICAN PROPERTY INDUSTRY MAGAZINE
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ESKEL JAWITZ Reflections on five decades of selling
ARE SOUTH AFRICA’S PROPERTY RIGHTS ON THE LINE? PP SepO_Cover.indd 1
101 2015/09/02 11:57 AM
Ever considered a career as a dream-maker?
26771 Property Professional FP Sept Oct FA.indd 1
2015/08/19 11:32 AM
04 Editor’s note Change is inevitable, and handled well, change is good. It’s all change here at Property Professional: a new editor – me – and a fresh look and feel to the pages of the magazine.
e’ve got some excellent new elements for you: our Diary page of must-know events, and Inside Info with feedback from recent buyers. We interview one of property’s elder statesmen, Eskel Jawitz, and run features on pertinent property issues and trends – understanding the threat to property rights is one you shouldn’t miss. We’ve kept some of the aspects you know and love, such as industry news and Tools of the Trade. We have two goals with this magazine: to keep you informed about what’s happening in the South African property industry right now; and to help you sell property more effectively. We want this magazine to be exactly what you want to read, so let us know how we’re doing: email me at email@example.com Look forward to hearing from you! Catherine Davis PUBLISHED BY THE CREATIVE GROUP 6 Beach Road, Old Castle Brewery, Woodstock 7925 087 828 0423 www.facebook.com/PropertyProfessional https://twitter.com/Property_Prof
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SOUTH AFRICA’S PROPERTY RIGHTS ON THE LINE
30 FINANCIAL: what you can learn from great investors
EXPLAINING THE UPSTREAM MODEL
THE CREATIVE GROUP CEO: Shaun Minnie firstname.lastname@example.org EDITORIAL TEAM Acting Editor: Kim Maxwell Content Strategist: Bridget McNulty Chief Copy Editor: Yaron Blecher Designer: Megan Cooper
ESKEL JAWITZ ON THE PHILOSOPHY OF PROPERTY
PROPERTY CROWDFUNDING: a fresh take on investor and developer returns
ADVERTISING SALES: Sales and Marketing Manager: Michèle Jones email@example.com 084 246 8105 Advertising, production & subscriptions: Jackie Maritz firstname.lastname@example.org Printing: Paarl Media | Disclaimer: The publisher of this magazine gives no warranties, guarantees or assurances and makes no representation regarding any goods or services advertised within this edition. © Copyright The Creative Group. All rights reserved. No portion of this publication may be reproduced in any form without prior written consent from the publisher. The publisher is not responsible for any unsolicited material.
2015/09/02 11:24 AM
All you need to know to keep plugged into the property industry in South Africa
10–13 10 11 14 18 18
WHAT: INVESTMENT AND PROPERTY EXPO WHERE: Coca-Cola Dome, Johannesburg TIME: All day
WHAT: SAPOA RESEARCH BREAKFAST: RETAIL TRENDS REPORT WHERE: Hogan Lovells, 22 Fredman Drive, Sandton TIME: 8am to 10.30am CONTACT: email@example.com
WHAT: SAPOA METHOD OF MEASURING FLOOR AREAS WORKSHOP WHERE: DoubleTree by Hilton Cape Town Upper Eastside, Woodstock TIME: 8am to 11.30am CONTACT: firstname.lastname@example.org or 021 447 3356
WHAT: SAPOA ANNUAL GOLF DAY: BUFFALO CITY WHERE: East London Golf Club TIME: 10.30am to 6pm CONTACT: email@example.com
WHAT: SAPOA THE VALUATION OF PROPERTY INVESTMENTS WORKSHOP WHERE: DoubleTree by Hilton Cape Town Upper Eastside, Woodstock TIME: 8.30am to 12.30pm CONTACT: firstname.lastname@example.org or 021 447 3356
WHAT: HIGHEST AND BEST USE IVALUATIONS COURSE WHERE: University of Pretoria CONTACT: email@example.com or 012 434 2500
WHAT: SECTIONAL TITLE WORKSHOP WHERE: Master Builders Conference Centre, 40 Essex Terrace, Durban TIME: 8am to 4pm CONTACT: firstname.lastname@example.org or 031 765 4100
WHAT: SAPOA PROPERTY CASH FLOWS AND TAX WORKSHOP WHERE: DoubleTree by Hilton Cape Town Upper Eastside, Woodstock TIME: 8.30am to 12.30pm CONTACT: email@example.com or 021 447 3356
WHAT: PRINCIPLES OF DISCOUNTED CASH FLOW VALUATIONS COURSE WHERE: Midrand Training Centre, Allandale Junction, Midrand, Johannesburg TIME: 8am to 4pm CONTACT: firstname.lastname@example.org or 011 883 0679
Mark your calendar! THE ANNUAL SAPOA International Convention and Property Exhibition: 21 to 23 June 2016 at the Sandton Convention Centre
WHAT: GREEN BUILDING CONVENTION WHERE: Cape Town International Convention Centre CONTACT: greenbuildingconvention.org.za
WHAT: VALUATION OF PROPERTIES UNDER CONSTRUCTION COURSE
WHAT: SAPOA DEBT FUNDING AND PROPERTY INVESTMENTS WORKSHOP
WHAT: SAPOA PROPERTY CASH FLOWS AND TAX WORKSHOP
WHERE: University of Pretoria CONTACT: email@example.com or 012 434 2500
WHERE: DoubleTree by Hilton Cape Town Upper Eastside, Woodstock TIME: 8.30am to 12.30pm CONTACT: firstname.lastname@example.org or 021 447 3356
WHERE: DoubleTree by Hilton Cape Town Upper Eastside, Woodstock TIME: 8.30am to 12.30pm CONTACT: email@example.com or 021 447 3356
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2015/09/02 11:26 AM
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IN THE INDUSTRY ETHEKWINI ASKS FOR COMMUNITY COLLABORATION
“If the city is to be sustainable, draw investment and grow, it’s crucial that the elements that are handbrakes to progress be identified, resolved or removed,” said Adrian Peters, chief strategy officer for eThekwini municipality. He offered highlights from a “short discussion document” prepared by the new City Planning Commission for Greater Durban at a recent networking breakfast for the South African Property Owners Association (SAPOA). To a packed house of developers, investors and real estate industry representatives, Peters pulled no punches about the state of eThekwini, offering an analysis of why Durban as a city is not moving forward as it should, and acknowledging the failings of both the municipality and the private sector. Peters urged SAPOA members to get involved: “The scale of the challenges facing Durban is beyond the capacity of any single organisation to address. You are all role players with an interest in the city. The plan has to be owned by everybody. Improved communication and trust between the public and private sectors will assist in this.” The aim of the commission document is to stimulate debate and discussion and to get input and opinions from the industry. “Were the questions the right ones?” asked Peters. “Do they adequately capture the key challenges and opportunities facing the metropolitan area?” SAPOA KZN regional chairman Edwin van Niekerk stressed the organisation’s willingness and intention to get involved.
JOBURG’S CONTAINER BOXES CHANGE THE RETAIL LANDSCAPE In late 2012, iti created i ty ne on ountesses in indsor outh ricas rst residential apartment block made from shipping containers. In early 2014, Mill Junction was rolled out as a novel orm o student accommodation in e to n ith our oors o shippin containers ta ed on to oors of grain silos. Umhlanga Junction Extension, a 75-bed student residence built out of shipping containers, launched in ri ton in early . nd in uly outh ricas rst car otecture shoppin centre launched as 27Boxes at Melville’s Faan Smit Park. hese early pro ects led us to elieve that outh ricans are hun ry or somethin different and visually interestin says aul apham o iti a auten ased property investment and mana ement company. he elville retail centre appeals primarily to start ups smaller usinesses and temporary pop-ups, where compact premises mean lower rental overheads. For entrepreneurial business owners it offers a retail space ith shorter leases or testin the mar et. etail spaces at o es ran e rom m2 sin le stores rentin or to m2 dou le stores at priced at a month e cludin . apham says iti departed from traditional shopping mall designs and built 27Boxes from shipping containers ric s and concrete. he roup made use o clever desi n vi rant colours and claddin . repaid electricity meters have een installed inside the stores. here are par in ays too. While not cheaper to uild than conventional uildin s containers need similar nishes , the construction process is aster. o es adds a constantly chan in shoppin e perience to the ohemian atmosphere o elville says apham. onventional shoppin centre stores ran e rom m2 to 1,000m2. he shipping containers used for 27Boxes create smaller stores, with corridors for a traditional market environment. he o es tenant mi includes ood and clothin stores alleries ca e shops and health shops.
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2015/09/02 11:27 AM
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The role of mentorship in the property industry Learning the tricks of the trade is an essential skill in any industry. But how important is it for estate agents? BRIDGET MCNULTY
Steve Jobs famously said, “The only way to do great work is to love what you do.” When it comes to the real estate industry, part of loving what you do seems to be sharing that love – and knowledge – with others. Mentorship has always been an integral part of the property industry, however with the introduction of the new curriculum and the statutory educational requirements, mentorship has become even more entrenched and important. It is, in fact, a requirement for new entrants into the profession: to become an estate agent, one has to undertake a 12-month internship under the guidance of a qualified estate agent. Mentorship is integral to this. “As in many industries, the theory and skills learnt in the classroom need to be supplemented with guidance, advice and knowledge transfer from an experienced person in a practical setting for the lessons to gain their full value,” says Berry Everitt, CEO of Chas Everitt International. Andrew Golding, CEO of Pam Golding Properties, agrees. “Mentorship is significant and important in enabling experience and wisdom gained over many years, to be passed on from mentor to mentee.” This will only become more important as the industry changes in the near future. “We recognise that the local workforce demographics will change dramatically in the next couple of years,” says Samuel Seeff, CEO of Seeff Property Group. “The pool of seasoned agents will become less, due to retirement and more stringent legislation. Younger people and people of different backgrounds will not only join Seeff but the industry as a whole in greater numbers. This will mean that mentorship as a vital aspect of the real estate industry will become even more important.” Of course, what that mentorship looks like will depend on the agency. “We have a very flexible and comprehensive approach to mentorship to suit the needs of different markets and franchisees,” explains Everitt.
MENTORSHIP IS A VITAL COMPONENT OF SUCCESS AS AN AGENT BERRY EVERITT, CEO, CHAS EVERITT INTERNATIONAL
“It can be provided by a principal or a manager. I’m currently mentoring a group of new agents that we have selected to ensure sustainability and who we believe have the potential to become the superstars of tomorrow.” Seeff agrees, “Developing a talent pool is an ongoing challenge for all companies as they strive to remain ahead of the competition and compete in a global market.” So what can be taught? “Both theoretical and practical knowledge as well as nuances that are gained through years of hands-on industry experience. This is all part and parcel of what an experienced estate agent contributes through a mentorship programme to interns,” says Seeff. As for personal mentors, both Everitt and Seeff credit their parents with the role. “My first and most important mentors were my parents, who founded Chas Everitt International and are still involved in the group today. My father, especially, was a firm believer in the saying that if something is worth doing, it is worth doing right’,” explains Berry. “He was very strict when it came to ensuring that our customers’ experience of doing business with us was memorable for all the right reasons. This principle is still very much part of our corporate DNA today, along with a deep understanding of the fact that selling or buying a home is an emotional experience for most people and that the transaction needs to be handled with respect and finesse.”
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2015/09/02 11:28 AM
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CUSTOMERS CAN NOW GET A BOND INDICATION IN LESS THAN 3 MINUTES Existing and potential homebuyers now have an instant indication of the home loan amount that they qualify for.
Less than three minutes. That’s all it takes for customers to get an indication of the home loan amount that they qualify for, using a new online tool called Instant Bond Indicator, launched by Nedbank Home Loans. This tool provides customers with an immediate indication of their credit health check and affordability status. All customers need to do is complete a few short fields upfront and they will instantly get an answer. This tool can be used anytime, anywhere, at their convenience. Unlike the affordability calculators in the market, the Instant Bond Indicator provides customers with vital information about their credit health check – pulled directly from the credit bureau – and their affordability status. The tool takes it a step further by providing customers with the estimated deposit required, expected instalments and other estimated costs associated with the loan, such as transfer duties and attorney fees. Instant Bond Indicator may be used by anyone who is looking to buy property. It provides an indication of what Nedbank is willing to lend them up front, whether they bank with Nedbank or not. Once customers find their dream home, they can move on to complete the full Nedbank home loans online application and get bond approval within hours. Customers will more than likely qualify for the amount provided by the Instant Bond Indicator, as long as their personal information has not changed. “The insight that led to the development of the tool is a direct result of listening to
our clients’ request for a tool that would give them an indication of what they could qualify for before starting the search for their dream home,” says Timothy Akinnusi, head of sales and client management at Nedbank Home Loans. “We are excited about Instant Bond Indicator as it puts the power back in the hands of customers. They will be better equipped for the process of searching for a home, with the confidence of knowing how much Nedbank will finance them for,” says Akinnusi. “Our aim is to ensure that getting finance for a home is an exciting and enjoyable experience from start to finish. All customers need to do is answer a few quick questions using any internet-enabled device (cellphone, tablet, laptop or desktop computer). Once they receive their results, they can find the home they want and proceed with the full online application,” concludes Akinnusi. The Instant Bond Indicator follows on from Nedbank’s award-winning Home Loans Online Application Channel, which offers a simple application process, providing customers with a credit decision within hours, anywhere and any time. It enables customers to upload all their supporting documentation electronically and to save and retrieve their applications online at their convenience. Since inception in 2012, the channel has seen more than 40,000 applications from clients and has significantly improved the home loan application experience. For more information, visit nedbank.co.za/ homeloans, contact us on 0860 911 007 or at your nearest Nedbank branch.
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2015/09/02 11:30 AM
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2015/08/20 10:50 AM
DURBAN’S POINT HAS ROOM FOR LOCAL DEVELOPERS After eight years of stalling, The Point Development, Durban, is on the move. The findings of an open public meeting in late July showed that opportunities exist for local property developers and investors. The Durban Point Development Company (DPDC) has taken a clear stand. Said Soban Bevarah, head of operations: South Africa at UEM Sunrise: “We’re handling the entire development – that is, the land still available and the land under the ownership of DPDC – and not selling off sections to other parties. We have control and we’re investing in our own development.” The thinking is that by selling off sections, the go-ahead for the development could rest in the hands of people who choose not to act, putting the overall development at risk, as happened previously. About half the Point land is either developed or owned by parties other than DPDC. DPDC has about 300,000m2 of bulk to develop and has applied for additional bulk of 135,000m2. Most of the development will be for mixed use – retail malls, hotel, residential and commercial offices. The DPDC is also open to joint ventures. The DPDC is particularly keen for developers to get involved in its A-grade office space – rare in the inner city – to bring back the professionals who relocated. “We’re opening up to local investors. We want great proposals from strong, credible companies with good track records; then we’re happy to form JVs and develop partnerships. We are looking to empower local developers, and we’re being approached constantly by national and international companies with local empowerment companies, or vice versa,” said Bevarah. “What we are saying is, yes, we want to develop it ourselves, but we are open to new investors or developers who are willing to come on board with our concept, and who want to work with us. But we won’t compromise on design or quality.”
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2015/09/02 11:30 AM
CAPE TOWN PARTNERSHIP SUPPORTS GREENMARKET SQUARE LEASE A public process that will guide the granting of the rights to use, control and manage Greenmarket Square and St George’s Mall has been endorsed by the Cape Town Partnership (CTP), which has agreed to the City of Cape Town’s plan to lease Greenmarket Square for ve years. he city elieves its plan or rantin long-term management rights will enhance the management and coordination of the square and t eor e s all and aid in potential up rades. e are very pleased that the City of Cape Town is committed to exploring ways to unlock the potential of this historic space,” says CTP CEO ulel a a alima e ana. he partnership will inform the city on public-space management and act as the mana in a ent or some spaces. “Appreciating the need to create and maintain e cellent pu lic spaces e share the citys vision to realise the potential of not only Greenmarket uare ut o all si ni cant pu lic spaces in the roader city oth rom an economic perspective and to the ene t o all apetonians she added. Greenmarket Square is one of the oldest public spaces in Cape Town, dating to the s. “Greenmarket Square and St George’s Mall are incredibly important economic, social and cultural herita e spaces. nterventions are re uired to revitalise these spaces and to ensure that they remain important and inclusive meetin spaces for all Capetonians, that they unlock investment to drive economic opportunities and ecome nancially sustaina le assets said the city’s mayoral committee member for tourism, events and economic development ouncillor arreth loor. 12
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2015/09/02 11:31 AM
RICH MEDIA IN PROPERTY ADVERTISING
Hey Joburg, what’s the plan? How can Johannesburg’s inner city be made more livable and sustainable for its communities? This was the objective behind What’s the Plan?, a multimedia exhibition launched by the Johannesburg Development Agency (JDA) at the Gauteng Institute for Architecture in the Maboneng Precinct in August
he exhibition showcased a 15-year journey to reshape and re-energise the inner city. “We’re committed to facilitating relevant, thought-provoking public engagements around inner-city development,” said the exhibition’s curator, Maria-Paola McGurk. “We have tussled with the questions of who is the inner city, how do we involve such a diverse community in a meaningful dialogue and where do we start? We decided to prioritise the voices of those who are committed to regenerating the city from within; not the whingers or whiners, but those who are courageously and determinedly shifting the inner-city landscape.” At the exhibition and in the accompanying booklet, the JDA encouraged city o cials investors community mem ers planners consultants and students to re ect on years o inner city en a ement and to share their perspectives on how they see it in the future. What’s the Plan? included aerial and ground photographs, maps, scale plans and architects’ drawings, to capture four distinct phases in the shift from a strategy based on attracting investment to one that focuses holistically on livability, economic sustainability, the urban poor and the needs of inner-city communities.
As the world becomes ever more digital, property advertising has to keep up by offering 3D experiences of prospective neighbourhoods.
Consumers worldwide are expecting more and more content to be published online and those expectations are just as high when it comes to property marketing. RE/MAX USA recently did a survey of what consumers most wanted to see in their property search and the answer was area or community videos. The reasons are clear: video is immersive and puts you right in the action in a way that pictures and text cannot. When it comes to property, rich media such as virtual tours, floor plans and videos offer an authentic view of the property that buyers want to see, often before they even view the property. This immersive experience is one of the reasons Private Property recently launched its Neighbourhoods section, videos included. Finding a property online is no longer just about finding the actual house, but also the neighbourhood – and attached lifestyle – that feels right. Location has always been incredibly important to property browsers, but property portals don’t usually answer the most important question: “What is it like to live here?” These videos help to do just that, and act as showcases of these specifically South African areas. “We felt that too few people were telling the great stories about our South African communities,” says Private Property CEO Simon Bray. “We all love living in our own corner of this beautiful country and since buying property is driven by consumer perception, we want to positively influence that perception with these videos.” The first three videos released – Sandton in Johannesburg, Cape Town’s Southern Suburbs and Durban Central – offer a breathtaking look at the neighbourhoods in question. A local tells you what they love about their area, and footage from aerial drones equipped with 4K UHD cameras gives you the feeling that you’re floating through the neighbourhood. Time lapses and hyper lapses, regular and aerial photography all combine to create a beautiful cinematic experience. It would seem that the bar for rich media in property advertising has just been set a lot higher.
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2015/09/02 11:31 AM
I N T E R N AT I O N A L N E W S
PROPERTY MOVEMENTS AROUND THE WORLD DITCHING LONDON’S BRIGHT LIGHTS Samuel Johnson once famously said: “When you tire of London, you tire of life.” If statistics are anything to go by, then there are an awful lot of people who are fed up with their lot in Britain’s capital. Last year, a record number of Londoners packed up, left the city and moved to other areas of the . i ures released y the ritish ce or ational tatistics indicate that a record number of thirtysomethings have been leaving London for regional cities. It has been estimated that 58,220 people aged between 30 and 39 left the capital in a increase on the ure. The price of property in London appears to be one of the main reasons that people o this a e are choosin to move. o surprises then iven that the city’s house prices rose by a staggering 19% during 2014. The average price of property in the UK is currently around £181,000 (about R3.6m), according to the UK’s Land Registry House Price Index. The picture in London is completely different ith the avera e price close to a out . m . Interestingly, while some are moving to less expensive cities, a large majority are dumping city life for good and moving to the country. Estate agency Hamptons International noted that four out of 10 Londoners who moved home in 2013 left for quieter regions in the southeast and southwest of the country. NEW ZEALAND PROPERTY PRICED OUT OF REACH Salaries are low, but property prices are notoriously high in this beautiful country. The rass may e reener in e ealand and e aren’t talking way of life. An abundant rainfall really makes it greener) but property is expensive. The Demographia International Housing fforda ility urvey released earlier this year indicates that Auckland’s property market is amon the least afforda le across the lo e. As things stand, it’s only slightly less expensive than ondon ut more e pensive than e or Los Angeles and Perth. Latest statistics reveal that the average price o an uc land home is over (approximately R6.7m). A one-bedroom penthouse with a study, measuring 53.4m2, will set buyers back around R4.7m.
Before you retort that it’s relative and that rand values don’t mean much these days, consider that e ealanders themselves are ndin it increasin ly di cult to uy property. alaries are low and aren’t keeping pace with house prices. The government is concerned, implementing a num er o initiatives in an effort to cur prices and boost supply, without much success. One of these includes the government’s Auckland Housing Accord. When launched in 2013, the aim was to build 39,000 new homes over a three-year period. To date, only 20 homes have been built. The lack of available land is the main driving force behind high prices. Given that the country is small, this is probably never going to e resolved. e ealanders ill have to continue to pay top dollar for a place to live.
BORN IN THE USA The number of homeowners in the US has dropped to a 35-year low, with only around 60% owning their own property now. Home ownership was once the mainstay of the American dream. However, perceptions about the importance of owning a property have changed since the mid ’80s, when 79% of Americans placed a great deal of importance on home ownership. These days, only 61% of those polled believe that owning a home forms part of that dream. The situation was undoubtedly aggravated by the 2008 crash, which saw around five million Americans lose their homes. Although there is a fair amount of concern surrounding the ownership trend, experts maintain that the situation will not continue in the long term, arguing that skyrocketing rentals will force tenants into buying their own homes. The other aspect that has already started to impact on sales is the buying power of millennials. This sector made up 32% of the US housing market during 2014, up from 28% recorded in 2012. On the bright side, the Zillow Housing Confidence Index notes that around 5.2 million tenants say they expect to buy a home this year – up from last year when 4.2 million had the same plan. Owning a home in the US might have lost a little shine among those who were badly burnt during the crash. But memories of those trying times are fading and young adults are beginning to understand the importance of home ownership.
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2015/09/02 11:32 AM
I N T E R N AT I O N A L N E W S
Is Australia’s bubble about to pop? Property listings in Sydney and Melbourne are on the rise. Residential property in Australia is now collectively worth a mind-boggling AU$6 trillion
his is thanks, in part, to the double-digit price growth in these two cities. Data released by CoreLogic revealed that Sydney featured the strongest annual growth in the country, recording a year-on-year growth of 18.4%. Property in Melbourne rose by 11.5% during the same period, while Brisbane rose by only 3.9%. In real terms, this means that the median price of property in Sydney is now 72% higher than property in Brisbane. Although some argue the point, most agree that property markets in Sydney and Melbourne have ballooned into a bubble situation. Recent reports have shown that properties are coming onto the market in record numbers. Nationally, these ures increased y . in uly this year up by 4.2% from 2014 stats. In Sydney, listing increased by some 18.5% during the same period, although it has to be said that listings in the capital are lower than levels recorded in Melbourne, Brisbane and Perth. Nevertheless, SQM Research, an independent property advisory and forecasting research house, has noted that the rise in listings in both Sydney and Melbourne were “abnormal” for this time of the year, as listings are generally subdued during this time. The company’s MD Louis Christopher noted that the unseasonal early jump in listings ahead of the traditional spring selling season might be a sign that Australia’s two booming property markets are nearing their peak.
RESIDENTIAL PROPERTY IN AUSTRALIA NOW COLLECTIVELY WORTH A MINDBOGGLING AU$6 TRILLION.
PROPERTY IN NUMBERS
the average price of property in the UK
(APPROX R6.7M) the average price of an Auckland home
5.2 MILLION American tenants who expect to buy a home this year
AU$6 TRILLION the estimated collective value of residential property in Australia
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2015/09/02 11:32 AM
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Key stories recently dominating property news IS A PRIMARY RESIDENCE AN ASSET? If a residential property appreciates in value each year, it’s an asset when it’s sold. But can a home, the day after it’s purchased, be considered an asset if it’s also a primary residence? Industry players say yes. Nationally, residential property values are growing at an average of 8% to 10% a year. This means that even if it’s a geared investment, it can be sold for at least as much, but likely more, than the original price paid. “For a primary residence, a home being an asset is dependent on whether the value of the property is appreciating or depreciating,” says Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa. “This will be determined by several factors, such as the market, growth in the area and demand for property in that area. In terms of a second or investment property, whether or not it is an asset will be based on whether it is generating an income.” “I believe a home is generally an asset from the second you receive the title deed, whether the property is onded or not says e effen chairman o e effen othe ys nternational Realty. He says the only rider to a property’s being an asset from the outset would be having to spend substantial amounts of money on making it structurally sound. The golden rules when buying are: do your homework on the area and look at past performance.
EXPATS LOOK BACK HOME FOR R2M-ANDABOVE PROPERTIES
JOHANNESBURG HOUSE PRICE GROWTH SHOWING STRENGTH
More than 300,000 South African expats have returned home over the past ve years, according to Angel Jones, CEO of the Homecoming Revolution, and the R2m-anda ove property mar et loo s set to ene t. ur o ces in the Southern Suburbs and on the Atlantic Seaboard in Cape Town each receive at least ve to in uiries a month says e effen chairman o Lew effen othe ys nternational ealty. “Golf and security estates are popular in the Southern Suburbs of Cape Town, as are secure freestanding houses. On the Atlantic Seaboard, it depends entirely on the stage of life of the expats returning. Some look for loc up and o type properties such as ats in Clifton, while others want villas in Fresnaye, Camps Bay or Bantry Bay. In Johannesburg, security estates are very popular, as are secure freestanding properties in areas that have good neighbourhood watches and security patrols.” Carol Reynolds, Pam Golding Properties area principal in Durban and surrounds, says he li estyle ene ts o our climate and eaches alon ith the support offered y amily and riends are di cult to replace. nd value for money cannot be compared. A R5m home here is a beautiful, stylish mansion, hereas m uys very little offshore.
ouse price in ation in Johannesburg is showing above-average growth in pockets around the city, from the East Rand to the Northern Suburbs. In the east of the city, sectional title and freehold are performing well, according to Michael van Heerden, mana er o eeff prin s and Brakpan. In these markets, he says, house price in ation is sittin et een and . The picture is etter hen the past ve years is considered. “Springs freehold property has increased by 25,91% and sectional title y an eerden says, “while Brakpan freehold has seen ro th o and sectional title o . he to and is dominating these transactions. The greater Sandton area has witnessed impressive growth in freehold property and above-average sectional title performance. Says Jonathan Davies, manager at Pam Golding roperties yde ar ver the past ve years (2011 to 2015) the freehold average price in the greater Sandton area has risen from m to m or . he sectional title avera e price has risen rom m to R1,258m, or 15%”. Davies attributes the trend to general market dynamics and to the popularity of Sandton as an address.
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TOOLS OF THE TRADE
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YOU’RE TRYING TO: nd a uilder to spruce up a property e ore sho in it. YOU NEED IT BECAUSE: unless you re an lin or uyers ith a love o peelin paint and ro en roo tiles rarely help to move a property. e ore a house oes on the mar et a uic nip and tuc is o ten a ood ay to spruce up a tired home. o nd a relia le contractor to do the o on time rst time and or a reasona le price say hello to ed ish. THE NITTY GRITTY: he site is all a out connectin property o ners and tradesmen e plains co ounder heunis ane om. ed sh saves you time and spares you the orry o not no in the ac round o the contractor youre allo in onto your property. lients post details o the or they need done rom paintin and uildin to plum in intercoms or other services. ocuments and photo raphs can also e attached
to the post. radesmen si ned up to ed ish then su mit their uotes and the client selects the est contractor or the o . X-FACTOR: More than 1,500 contractors have si ned up nation ide includin many carpenters uilders and related service providers. mportantly clients pay no ees or usin the service. nstead contractors pay a mem ership ee or a commission to ed sh. ratin system allo s clients to see a contractor s trac record o past or and read comments rom ormer customers. ompanies vetted y ed ish receive a ron e ratin to start ith. ive client re erences ill ump them up to silver status. hree scores o more than out o ive the contractor a top ran ed old ratin . redfish.co.za
DRONE PHOTOGRAPHY YOU’RE TRYING TO: make a highvalue property stand out. YOU NEED IT BECAUSE: it’s competitive out there and images are the fastest way to stand out in a crowded marketplace. Drone photography companies make attention-grabbing aerial images an affordable option for sellers. THE NITTY GRITTY: Drone photography shows off the elevation, landscaping and surrounding suburb to great effect, providing a wow factor that’ll quickly turn ‘for sale’ into ‘sold’. In Johannesburg, Drone Africa has an impressive portfolio of real-estate and architectural work, while Cape Town’s Drone Photo allows for easy online ordering of hi-resolution imagery. X-FACTOR: Most operators offer discounts for multiple properties. Cape Town: dronephoto.co.za; Joburg: droneafrica.co.za
OOBA’S MOBILE APP YOU’RE TRYING TO: tal prospective uyers throu h the mine eld o applyin or mort a es. YOU NEED IT BECAUSE: hen meetin clients at a property it pays to have in ormation at your n ertips to tal them throu h the cost implications o puttin in an offer. al in speci cs speeds up the process and sho s you mean usiness. THE NITTY GRITTY: he app s po er ul calculators are use ul to oth uyers and a ents. he fforda ility calculator ives prospective uyers an idea o the ond or hich they are li ely to uali y and a bond repayment tool ensures that purchasers no hat they can e pect to pay e ore they put in an offer. ond ees and trans er costs o ten come as a nasty surprise or rst time uyers so a cost calculator lays out additional up ront e penses. X-FACTOR: he calculators are neatly inte rated into a uic access menu here you ll also nd an section as ell as the latest mort a e nance ne s. he ree app is availa le or i and ndroid devices. ooba.co.za 20
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GOOGLE’S REAL-ESTATE TOOLS YOU’RE TRYING TO: use the power of the World Wide Web to your agency’s advantage. YOU NEED IT BECAUSE: just as Google helps you find your way around the internet, it can help other people find their way to your agency and the portfolio of great properties that you’ve listed on your website. THE NITTY GRITTY: Google offers a suite of tools for real estate professionals. Back-end office functions can be driven using the cloud-based Google apps and Gmail, and Google Maps allows you to integrate maps into your website and make them searchable for prospective buyers. Uploading your property listings directly to Google also increases your profile, resulting in a better page ranking when a buyer searches “property for sale in Sandton”, for example. X-FACTOR: Get better results by using Google AdWords, a costeffective way to generate relevant leads from buyers who are actively searching. You pay for AdWords only when a user clicks on the link leading to your site, so your return in terms of connecting with buyers is 100%. The dynamic system also allows you to target users based on location, ensuring that you are talking only to buyers in your area. https://www.google.com/work/apps/business/
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WHAT YOU CAN LEARN FROM GREAT INVESTORS Whether you’re weighing up the pros and cons of investing in a new retail development or driving sales at a small business, it’s worth learning from the best PATRICK CAIRNS
any agencies are looking at ways to grow their property businesses, while developers are assessing potential retail, commercial or residential projects. These are essentially investment decisions and must be examined in terms of risks against possible returns. Successfully gauging these odds is the mark of a good investor. This advice from some of the world’s best investors is as relevant to the property industry as it is anywhere else. WARREN BUFFET: “NEVER INVEST IN A BUSINESS YOU CAN’T UNDERSTAND.”
By following what was ultimately a simple investment philosophy, Warren Buffet became the richest man in the world. He never chased the next big thing, but turned the odds in his favour by making one solid investment after another in businesses within what he calls his “circle of competence”. It is a crucial business lesson because it is easy to be seduced by the idea of turning a fast profit and rushing a decision without properly exploring the risks and opportunities. Every investment, whether it is buying a business or developing a property, should be thoroughly scrutinised and evaluated. If you have to make a decision in a hurry, the best decision will almost always be to walk away. STEVE JOBS: “DECIDING WHAT NOT TO DO IS AS IMPORTANT AS DECIDING WHAT TO DO.” Cofounder of multinational technology company Apple, Steve Jobs was one of the world’s greatest “ideas” men. But he also
knew that when you truly understand your market and your product, you also know your limitations. It is better to do a few things really well than to do many things poorly. This is as true with property as it is with anything else. One agent can’t sell every house and one developer can’t handle every project, so find your area of expertise and specialise in it. Offer excellence no one else can match. BILL GATES: “SUCCESS IS A LOUSY TEACHER. IT SEDUCES SMART PEOPLE INTO THINKING THEY CAN’T LOSE.” Bill Gates has enjoyed more success than any other entrepreneur of the 20th century, but Microsoft is the company it is because it has learnt from its mistakes. A big part of that is making sure you have a contingency plan. Inevitably things will go wrong, but are you prepared for them? Do you have the necessary level of professional liability insurance? Will your balance sheet withstand a hit to your cash flow if payments are delayed? RICHARD BRANSON: “COMPLEXITY IS YOUR ENEMY. ANY FOOL CAN MAKE SOMETHING COMPLICATED. IT’S HARD TO KEEP THINGS SIMPLE.” The Virgin Group empire built by Richard Branson is characterised by a spirit of fun, but also by accessibility. A great enterprise cuts out as much clutter as possible to focus on the few things that are really important. The less effort required from a customer, the more likely they are to buy the property. Offering a full-service package that needs
minimal input will be recognised and rewarded. MARK SHUTTLEWORTH: “A BIG PART OF WILLPOWER IS HAVING SOMETHING TO ASPIRE TO, SOMETHING TO LIVE FOR.” Mark Shuttleworth has achieved big things because he could imagine new possibilities. Not everyone can think on that scale, but we all have something we wish to achieve. Wanting to reach it is what drives us, and the more important it is to us, the harder we’ll work to get there. Every business needs a vision. The more clearly it is communicated, the more everyone within the organisation will relate to it and want to attain it. Don’t expect your enterprise to flourish if it has wishy-washy ideals. ELON MUSK: “STARTING AND GROWING A BUSINESS IS AS MUCH ABOUT THE INNOVATION, DRIVE AND DETERMINATION OF ITS PEOPLE AS IT IS ABOUT THE PRODUCT THEY SELL.” The innovations of Elon Musk in the arenas of electric vehicles, rockets and renewable energy are changing the world. But behind those products are inspired and committed people, and the exuberance of Musk himself. Products don’t build businesses, people do. This is particularly true in a people-centred industry, such as property, where it is the interactions with clients that determine success or failure. Those who put in the most time and effort to serve their clients’ needs will always earn the biggest rewards.
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PayProp lifts the weight of rental admin
PayProp automates repetitive rental management tasks and payments, freeing up your team so they can focus on growing your business. Our average client grows their portfolio by 23% per year. We do the legwork so you can get on with doing what you love! To find out how PayProp can turn you into a rental superhero, go to www.payprop.co.za or email us at firstname.lastname@example.org.
Property rights on the line Legislation under consideration by Parliament could pose a serious threat to South African ownership of property. Dave Steward, executive director of the FW de Klerk Foundation, answers the complicated questions we all should be asking
DAVE STEWARD Executive director of the FW de Klerk Foundation
THE FW DE KLERK FOUNDATION
The Parliamentary portfolio committee is considering a new expropriation bill. How could this have a marked effect on property rights in SA? The new expropriation bill would extend the power to expropriate property – and this is not limited to land – in “the national interest”, to government and to parastatals, at national, provincial and municipal levels. In terms of the proposed ill a municipality mi ht offer you for your home. However, you may be under the impression that the home’s actual value is two or three times more than that. You could challenge the compensation offered in the courts, but would have to vacate your property by a date stipulated by the municipality. Then you might be without the full value of your principal asset for years while your case proceeds through the courts. Because litigation is expensive and the outcome uncertain, you would therefore be under considerable pressure to accept the initial belowmar et value offer o compensation. The FW de Klerk Foundation’s Centre for Constitutional Rights promotes the values, rights and principles of the Constitution. The foundation opposes racism from any quarter. It monitors developments that may affect inter-community relations, participates in national debates on racial and cultural
What would be the knock-on effect of this bill? We have real concerns about the new concept of custodianship in some of the legislation before parliament. The Preservation and Development of Agricultural Land bill declares that the Minister of Agriculture, Forestry and Fisheries is the “custodian” of all agricultural land. This gives him or her extensive power to interfere in landowners’ rights to utilise and develop their land as they see t. Also, the state may be trying to establish a principle that if property owners are deprived of their property in circumstances where the state does not assume ownership of the asset – but merely custodianship – there might be no requirement to pay any compensation. In addition, government has repeatedly stated its intention of proceeding with potentially ruinous proposals for land reform – including the termination of the rights of foreigners to own agricultural land, and the limitation of agricultural land holding to three arbitrary and illogical sizes: small farms of 1,000ha, mediumsized farms of 2,500ha and large farms of 5,000ha. This could have serious implications for food production throughout the country because 70% of South Africa’s fresh food is currently produced on about 100 farms – and nearly all of them are larger than 5,000ha. All of this would go hand in hand with the proposed introduction of the 50/50 scheme. Here, farmers would be required to give half of their farms to their workers without compensation. The idea behind this scheme is that each farm would be managed as a collective between the farmer and the workers. The property rights of farmers have been further undermined by more than 50,000 new land claims that have already been submitted in terms of the 2013 Restitution of Land Rights Amendment Act. issues, and assists people in claiming their constitutional rights. The foundation makes submissions to Parliament and to Chapter Nine bodies, and defends the Constitution in the courts. fwdeklerk.org
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IN TERMS OF THE PROPOSED BILL, A MUNICIPALITY MIGHT OFFER YOU X FOR YOUR HOME. HOWEVER, YOU MAY BE UNDER THE IMPRESSION THAT THE HOME’S ACTUAL VALUE IS TWO OR THREE TIMES MORE THAN THAT. YOU COULD CHALLENGE THE COMPENSATION OFFERED IN THE COURTS, BUT WOULD HAVE TO VACATE YOUR PROPERTY
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When will this come into effect, and what could it do to the South African residential, commercial or agricultural land market? Some of the legislation – like the Restitution of Land Rights Amendment Act – has already come into effect. Other bills are now making their way through Parliament, and there are those like the Regulation of Land Holdings Bill that must still be presented to Parliament. If they are all adopted in their present form, they will have a very negative impact – particularly on the agricultural property market – and create uncertainty for all property owners. Why this legislation now, and why is the government taking action to undermine property rights? This is part of what the government, in virtually every major speech, calls “the radical implementation of the second phase of the National Democratic Revolution”. It has its roots in the 1956 Freedom Charter, which, among others things, calls for “the national wealth of our country to be restored to the people” and for “the mineral wealth beneath the soil, the banks and monopoly industries” to be “transferred to the ownership of the people as a whole”. It states that “all the land shall be redivided among those who work it”. According to the ANC’s Strategy and Tactics documents, “a critical element of the programme for national emancipation is the elimination of apartheid property relations”, which will require “the deracialisation of ownership and control of wealth, including land”. The 2011 Green Paper on Land Reform calls for “agrarian transformation”, which is “a fundamental change in the relations (systems and patterns of ownership and control) of land, livestock, cropping and community”. In July this year, Deputy President Ramaphosa said “the economic transformation we are undertaking is aimed at fundamentally changing the structure of our economy and patterns of ownership”. What could the long-term consequences be? There has never been a successful economy or
a free society that has not recognised property rights. The assault on property rights would have a catastrophic impact on the economy and on all South Africans, particularly the poor. It would accelerate foreign and local disinvestment and South Africa would be downgraded to junk-bond status. This would cause further disinvestment and a further weakening of the rand. It would ma e it very di cult or the overnment to raise the loans it needs to rid e the ud et de cit and to fund infrastructure development. The assault on property rights would also seriously threaten the Constitution and race relations. What action does the FW de Klerk Foundation propose? All South Africans who believe in the Constitution, free-market principles and property rights should support a strategy to oppose antiproperty legislation. The legislation should be opposed at every step of the parliamentary process by opposition parties, NGOs and by companies that feel their interests are threatened. ffected parties should refer to the legislation of the Constitutional Court. Citizens should be informed about the contents and intentions of the legislation and the threat that it poses to their own property rights. They should support the property rights of black South Africans and use all their constitutional freedom to defend their interests. What can property professionals and the public do to prevent this scenario? Property professionals should inform themselves about the nature of the legislative threat to property rights and the ideological context in which it is taking place. They should support and join civil society initiatives to oppose these threats – including organisations such as the FW de Klerk Foundation, the Institute of Race Relations, the Free Market Foundation and the Helen Suzman Foundation. They could work for the extension of property rights to South Africa’s eight-million black home owners by helping them to register title deeds. And they should support fair and workable proposals for land reform, such as those proposed by AgriSA.
Know your bills Understand the legislation that could have a significant impact on property owners. THE REGULATION OF LAND HOLDINGS BILL will prohibit foreigners from owning agricultural land, but will allow them leasehold rights for a minimum period of 30 years. The bill will place a cap on the size of farms: small farms would be capped at 1,500ha; mediumsized farms at 2,500ha and large farms at 5,000ha. Land holding above these limits could be expropriated for redistribution.
THE PRESERVATION AND PROTECTION OF AGRICULTURAL LAND BILL introduces the concept of custodianship into the ownership of agricultural land. The Department of Agriculture, Forestry and Fisheries would become the custodian of all agricultural land. If landowners are deprived of their property in circumstances where the state acts as custodian of the property on behalf of claimants, expropriation will not be deemed to have taken place, so there will be no compensation. This bill also places severe restrictions on the manner in which landowners can make use of agricultural land. THE RESTITUTION OF LAND RIGHTS AMENDMENT ACT 2014 extends the window for restitution claims until 30 June 2019. The claims create more uncertainty for targeted farmers and make it difficult for them to raise working capital. By April 2015, 55,893 new claims had already been submitted. In addition,THE PRIVATE SECURITY INDUSTRY REGULATION AMENDMENT BILL, THE PROMOTION AND PROTECTION OF INVESTMENT BILL and THE MINERAL AND PETROLEUM RESOURCES DEVELOPMENT BILL have far-reaching implications for local and foreign property ownership.
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RISKS WHEN SELLERS AND PURCHASERS DO NOT PLAY OPEN CARDS If A sells her river-fronting property to B, knowing that the existence of water rights is crucial to B as he intends to do small scale farming on the property, and withholds important information regarding water availability, a case can be made out that there was a fraudulent misrepresentation that could, depending on the circumstances, either mean the end of the agreement or allow B to claim a reduced purchase price.
These were some of the issues raised in the March 2015 judgment in Cape Agulhas Hotel CC v Liesbeek Motors (Pty) where the court came to the assistance of the purchaser. The judgment is a valuable guideline as to the evaluation of facts that a court would apply in such circumstances, but also illustrates the difficult burden of proof on parties involved in such disputes. Therefore, when deciding to purchase or sell, it is always advisable to choose an expert property practitioner to assist you from the word ‘go’. Contact our conveyancers at email@example.com or on www.stbb.co.za.
WHEN IT COMES TO HOME OWNERSHIP, LET OUR FAMILY LOOK OUT FOR YOURS
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MORE THAN JUST THE PAPER WORK
THE PHILOSOPHY OF PROPERTY CATHERINE DAVIS
The chairman of one of South Africa’s leading residential property groups has a career in property that spans almost five decades. Eskel Jawitz effortlessly combines his strong family value past with an intuitive business sense for the future
n the late 1960s, a Johannesburg medical rep in his early thirties was looking to buy his first house. He told two “top” agents at the time his maximum budget was R20,000. They showed him a house for R24,000. Why, he asked the agents, when he said his ceiling was R20,000? “Mr Jawitz, is that all you want to spend or is that all you can afford?” came their reply. A young Eskel Jawitz was appalled at the lack of respect the agents showed him. And he was inspired. If those two can make money while treating people like that, he thought, imagine what I could do! So a year later, when a friend asked Jawitz to join him in a small property business, he did.
It’s a story Jawitz, now 80, has told a few times during his 46-year career, but it bears repeating because it encapsulates so perfectly so much of what led to the Jawitz success story. Eskel Jawitz saw a gap, and elieved he could ll it. ut he didnt ust et into the property game to win; he carefully considered how he would play to win. And therein lies the difference. “For many people, a home is the biggest single personal investment o their lives. s such its part and parcel o their lives it si ni es various chapters of their lives. They’re emotionally involved. They’ve cried in that home, they’ve laughed in that home, they’ve had tragedies, they’ve celebrated …. And we’ve got to understand that,” says Jawitz.
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ULTIMATELY, PEOPLE MUST BE MORE IMPORTANT THAN THE TECHNOLOGY THEY USE BECAUSE A SOCIETY THAT VALUES TECHNOLOGY ABOVE PEOPLE WILL, WITH THE PASSAGE OF TIME, LOSE ITS MORAL COMPASS AND VALUES
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IT’S ABOUT PEOPLE Jawitz Property management still do show house visits not to chec up on their a ents ut to nd out what’s going on in their buyers’ minds. “I still do it!” says Jawitz. “Our business – I know, I know, it’s a cliché – is not about property, it’s really about people. We have to recognise that we, as estate agents, are facilitators providing a service that brings people together. We have to listen to what our clients – be they sellers or buyers – tell us. To understand their fears, needs and hopes, and to keep them fully informed during the entire selling or buying process. We have to make them feel as if they are the most important people in our lives.” Another pivotal time in Jawitz’s career, where he saw a gap (this time one that needed bridging rather than llin as hen his sons erschel chief executive, and Damon, franchise director – joined the company. Eskel Jawitz Real Estate was ready for a change. “No business should be dependent on one person,” says Jawitz. The market was shifting and customers were becoming more sophisticated. The Jawitz brand knew it had to meet the customers’ changing needs and expand into new areas of operation, but – and Jawitz stresses the “but” – without losing the focus on client service and the integrity on which the business was founded. NEW BLOOD Is there a battle between the old and the new? Jawitz says no. Damon later left the business and moved overseas, but Jawitz sees the time when ershel as as a convergence of the past and future. “Any business has to look at itself every now and then. It needs to look at where it has come from and decide on future plans,” he says. The Jawitz family knew that if they were going to claim to be a truly national company, Jawitz Properties had to be located in as many major and smaller centres as possible. So they decided to go the franchise route in addition to owning their own o ces in ma or metropolitan areas. As a company, they’ve accommodated all the technolo ical political nancial and demo raphic changes that have taken place, and married those with old-fashioned values that should never be lost – hard work, respect for clients and colleagues, face-to-face communication and integrity. “With regards to the rst thin e ve ot to accept is that transformation is needed and that everybody agrees with the principle of it. It’s 32
di cult. ot ecause the industry doesnt ant to change – the industry accepts that there has to be change. The problem is how do you do it so that every ody can cope and ene t from it? We’re all still working this one out.” LOOKING AHEAD Jawitz recognises that businesses have to continually adapt to changing circumstances, and that we live in a society where the advance of technology is almost outstripping the capacity of the bulk of the population to understand it. “We have to understand and accept that we cannot merely do today what we did yesterday and succeed. It’s a highly competitive world and our survival in the economic sense is determined by how hungry we are for new and better information, and how skilled we’ve become in utilising and exploiting it,” he says. “If I think back to client meetings I had in 1970, buyers and sellers, as well as consultants/agents, raised issues about up-and-coming areas, getting value or being ripped off, interest rates rising, bonds being approved … These same issues were raised in meetings in 1980, 1990, 2000 and so on. Today, clients and agents may be more aware of their rights and better educated about the market because they’ve done some research online, but the principles around property are the same.” “We speak to recorded voices on the phone; we don’t ask other people to take pictures of us – we ta e sel es; we no longer know the bank manager. Ultimately, people must be more important than the technology they use because a society that values technology above people will, with the passage of time, lose its moral compass and values.” Jawitz believes estate agents won’t become obsolete as long as this idea is entrenched now. “That’s how we make sure we have a future.”
Jawitz then and now 1969
1: office in Parkview, Johannesburg 4 to 6: total agents working Fewer than 5: average houses sold in a month (5 sold was cause for celebration)
1: office in Mauritius 48: offices in South Africa Nearly 400: company-owned and franchised office sales consultants R330m: approximate monthly property sales R2.3bn: approximate total sales this year
What makes an estate agent excellent? The ability to ask questions and understand the needs, wants, aspirations and fears of a client Never pushing clients into a corner, even if you’re feeling frustrated Not taking things personally. Any bad behaviour from others is a reflection of themselves, not you Knowing what your purpose is, knowing your “why”: what you believe, what you have to offer, what you can deliver
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BECOMING THE LOCAL NEIGHBOURHOOD EXPERT BEING A SUCCESSFUL ESTATE AGENT ISN’T JUST ABOUT KNOWING THE PROPERTY YOU’RE SELLING. IT’S ALSO ABOUT THE AREA SURROUNDING THAT PROPERTY AND WHAT MAKES IT SPECIAL. WE ASKED PRIVATE PROPERTY FOR TIPS ON HOW TO BECOME A LOCAL NEIGHBOURHOOD EXPERT
FIND YOUR NEIGHBOURHOOD The following neighbourhoods are pro led on privateproperty.co.za/neighbourhoods:
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Why do agents need to be local neighbourhood experts?
Looking for all the info you need to become a local expert?
BUYERS AND SELLERS ant to deal ith an a ent ho has e tensive local no led e. n a ent ho can advise them on property trends uildin and in rastructure or s re onin issues schools amenities entertainment and even crime in the area is much more valua le to a prospective uyer.
Private Property’s new Neighbourhoods section (privateproperty.co.za/neighbourhoods) offers:
THE DETAILS TO OFFER ts a ood idea to have insi ht into
1 . 2 . 3 .
all the relevant market details: sold prices of properties, market trends and so on
practical information: on the best schools in the area, shopping options and traffic constraints, for example the softer, less rational aspects, such as interesting leisure possibilities for the weekend and why people love living there
EASTERN CAPE • DIE MOOT • EAST LONDON • JEFFREYS BAY TO TSITSIKAMMA • PORT ELIZABETH GAUTENG • ALBERTON • BEDFORDVIEW AND SURROUNDS • BENONI • BOKSBURG • CENTURION EAST • CENTURION WEST • EDENVALE • FOURWAYS,
• DATA ON PROPERTY TRENDS in speci c areas
• DATA INSIGHTS includin avera e sales prices or houses apartments and comple es
• PRICING TRENDS or the past e years hich indicate ho much capital ro th has een e perienced in the area
• RENTAL DATA alon side sales data offerin an invalua le tool or uy to let investors chasin hi her yields
SUNNINGHILL AND LONEHILL • GERMISTON • JOHANNESBURG CBD AND BRUMA • JOHANNESBURG SOUTH • KEMPTON PARK • KRUGERSDORP • MEYERTON • MIDRAND • MOOT • NORTHCLIFF • NORTHERN PRETORIA • NORTHRIDING TO LANSERIA • PRETORIA CENTRAL AND OLD EAST
• PRETORIA EAST • PRETORIA EAST (SOUTH) • PRETORIA WEST • RANDBURG • ROODEPOORT • ROSEBANK • SANDTON • SILVERLAKES AND SURROUNDS • SOWETO • SPRINGS • VANDERBIJLPARK KWAZULU-NATAL • BALLITO (SALT ROCK, SHAKA’S ROCK) • DURBAN CENTRAL
What’s the sales advantage? IN TODAY’S INCREASINGLY DIGITAL AGE, everyone can access property listin s on e sites such as rivate roperty ut a ents still offer value throu h local mar et no led e and e pertise. nei h ourhood e pert provides not only property trend data ut also in ormation that is not availa le on the internet such as hat rush hour tra c is li e hich in rastructure pro ects are planned or ho ood the local schools are. n a ent ho can ans er all a clients uestions on the property mar et as ell as hat its li e to actually live there ill stand out rom other a ents in the area. his ill invaria ly lead to more sales and more mandates.
Final tip TO BE REGARDED AS A NEIGHBOURHOOD EXPERT, its essential to e visi ly involved in the local community and its pro ects. his enhances your reputation as a local e pert and allo s you to connect ith the area in hich you or . ts also important to eep a reast o hats oin on in the area y attendin meetin s and spea in to various residents and usiness people. he oal is to ecome an indispensa le part o the community.
• DURBAN NORTH • HILLCREST • PIETERMARITZBURG (HILTON) • MARGATE (SHELLY BEACH, RAMSGATE) • UMHLANGA NORTH WEST • HARTBEESPOORT AND SURROUNDS WESTERN CAPE • ATLANTIC SEABOARD (SEA POINT TO CAMPS BAY) • CAPE TOWN CITY BOWL
• CAPE TOWN SOUTHERN SUBURBS • (FALSE BAY) PENINSULA, SIMON’S TOWN, FISH HOEK, ST JAMES, MUIZENBERG • GEORGE • GORDON’S BAY • KNYSNA • MILNERTON AND SURROUNDS • TABLE VIEW AND BLOUBERG
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Let us help you become a property pro Effective real-estate agents stay abreast of industry developments and legal issues, and know how to use technology to their advantage ANDY MÖLLER
Property Professional is one of South Africa’s most respected realestate media print platforms, offering a definitive guide to news, property business trends, innovation and topical issues. Now the digital platform allows easy access to all these industry-boosting benefits from the comfort of your computer or smartphone
How can Property Professional help you? GET THE LATEST INDUSTRY NEWS From legislative changes to new tips on selling, reading our Industry News will keep you in the loop at all times. We interview specialists from industry giants such as RE/ has veritt eeff arcourts and Leapfrog Property Group – to name a few – providing comprehensive input on issues and trends that are current. KNOW ABOUT NEW DEVELOPMENTS Whether your bread and butter lies in industrial, commercial or residential property, it all comes down to available stock. If there is no stock, there is no sale. Property Professional’s Development News section provides all you need to stay on top of new property developments launched in South Africa. 36
STAY UPDATED ON INDUSTRY STATISTICS Your sales will e affected y the likes of interest rates, nearby amenities, neighbourhood communities and security. It ene ts you to e on top o the latest acts and ures ith re ard to the eo raphical area that you cover. Besides using reliable data sources such as Lightstone and Private Property, we regularly post industry-related polls for users to vote on, and share the results in each magazine issue. FIND TECHNOLOGIES TO MAKE YOUR JOB A BREEZE Selling houses can be tiring, especially with so many potential clients to please. elp is at hand: many applications and gadgets can minimise the workload; the trick is in knowing which ones can be trusted and are worth investing in. That’s where the Property Professional Tech Toolkit will assist you. GAIN PUBLICITY AS A NEW OR TOP-PERFORMING ESTATE AGENT Whether you’re breaking into the industry or being acknowledged for years of great service, spreading the word shouldn’t be
a hassle. Each month, we announce the latest new and top-performing agents throughout South Africa. Estate agencies are invited to submit their candidates for this space and we will be in touch to set up an interview. ADVERTISE YOUR TRAINING COURSES OR WORK OPPORTUNITIES TO OTHER AGENTS In addition to learning about the latest industry secrets from Property Professional, through us you can share useful information about agency training courses and workshops. Let us know what’s happening.
THE BEST IS YET TO COME Property Professional is on a massive rebranding mission to improve the user experience and content of both the magazine and website. We’ll be launching a new bi-weekly newsletter to all subscribers, delivering need-to-know information to your email inbox. Be sure to sign up for our online newsletter.
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Move on Move up
I N T E R N AT I O N A L
IS UPSTREAM THE ANSWER? ANNE SCHAUFFER
Recently, the board of America’s largest trade association, the National Association of Realtors, approved up to $12m in funding for a project known as RPR-Upstream. What is it and why is it relevant to South Africa’s real-estate industry?
he South African real-estate market and its counterpart in the USA are poles apart in many respects. Take market size, for starters. But, in this instance, size doesn’t really count. The issues that are at the heart of why the RPR (Realtors Property Resource)-Upstream concept has, like the proverbial bubble, burst on to the American property landscape, have struck a resounding chord with the local industry. For the techno-challenged among us, Private Property CEO Simon Bray breaks down the RPR-Upstream model: “Picture a single
warehouse. You have a number of suppliers who all drop off their stock there. It goes into the front door, gets stored there, and when it goes out to the various distribution shops, it goes out the back door and is delivered to the shop. It’s effectively one warehouse that consolidates – and aggregates – all the stock from various people/brands. It’s a single database – or one warehouse – to which the real-estate industry sends listings/properties, and a single database from which anyone can retrieve properties. It’s a consistent offering for everyone.”
WIDESPREAD SUPPORT It took about a year of behind-the-scenes discussions, negotiations and alliances for the RPR-Upstream initiative to be announced, and it has the support of the American real-estate industry majority. Ostensibly, brokers had lost faith in the way the industry was set up and were prepared to do something about it. American Brad Inman is a successful entrepreneur and innovator who started and still owns the leading real-estate trade online news source, Inman News. He founded and sold venture-backed HomeGain, an online real estate
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I N T E R N AT I O N A L
IT’S A SINGLE DATABASE – OR ONE WAREHOUSE – TO WHICH THE REAL-ESTATE INDUSTRY SENDS LISTINGS/PROPERTIES, AND A SINGLE DATABASE FROM WHICH ANYONE CAN RETRIEVE PROPERTIES SIMON BRAY, CEO OF PRIVATE PROPERTY
service. He believes that if RPR-Upstream is executed well, it’s a great industry move: “Brokers are ‘biting back’ at the machine of technology that wrested control away from them decades ago. The industry is nally uildin an accessi le national listing database that it can license to anyone who wants it – big boys like Move and Zillow, or a small app developer who is eager to add value to property listings.” The National Association of Realtors (NAR) and brokers can now create a smart grid to control the o o po er to any vendor ultiple istin ervice or portal that is dependent upon broker data for viability. “This isn’t only about taking back our data. It won’t just allow brokers to decide where their data goes. It will actually de ne ho hen and here much o that data is displayed and used at any end point.” DATA CONTROL The RPR-Upstream concept hinges on control of data. Craig Cheatham, secretary of the pstream oard, says, “Upstream has always been about making practitioners much more e cient in the handlin o their data thus
lo erin the cost time and effort they spend. nd brokers will be able to gain much better control of that data, for which they ultimately are held responsible.” Under the current system, by handing over data, agents lose control to third parties. “The intention is not to replace the system. The key is that the constraints around the data are not one-sided and that access is given to almost anyone.” CEO of Pam Golding Properties Andrew Golding unbundles some of the background, synergies and separations: “In America, the various key dynamics and drivers in the market are all on a much bigger scale than in South Africa – because it’s such a huge industry, it has so many very different movin parts. “In South Africa, our market is so much smaller. The number of portals is certainly less, but more importantly, the access to information is very different. In America, the access to almost all relevant property-related information is readily available to anybody who really wants to go and get it. There i ant to nd all the mar et in o, down to individual suburbs and streets, I can access this relatively easily.
“It’s much harder in South Africa. I either have to engage with an organisation that can access the in o rom the eeds ce or o to the eeds ce mysel e ust dont have the same level of information accessibility.” So how is it that control of the listings has slipped away from the originator? Golding says with property portals, in many instances, ownership of those portals doesn’t vest with the real-estate industries, but instead with the digital media houses. “As a consequence, the real-estate agencies are effectively ivin them content in the orm o the listings. Depending on the arrangement, the portals are rstly a le to display those listin s to the public, then utilise that information – either in the form of consolidating that listing info or as a consequence of buyers coming on to the portal consolidating the buyer information – and can either sell that back to the public or to the residential real-estate industry (or utilise it in some way). “The upshot – and it’s pretty much played itself out everywhere worldwide – is that the residential industries wanted to consolidate their position,
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I N T E R N AT I O N A L
and have gone with the RPR-Upstream initiative. ffectively, they ant to ta e ac some control o the in ormation o hich they are essentially the source. PORTAL WAR learly theres een a portal ar playin itsel out in the . iants such as ealtor.com illo and rulia have massive clout. ts hu e usiness ith a reat deal at sta e. nli e in merica our smaller mar et means that even the countrys i est estate a ency roup ouldnt e a le to independently e ert an in uence says oldin . e have to than oodness act as a collective in order to effect hatever outcome ere loo in or. ray descri es the current outh rican modus operandi or an online presence and its pit alls eal estate companies ta e all their property listin s and syndicate them to various end points. you ant to mar et them online you ll enerally post on your o n e site on property e sites such as rivate roperty roperty and and perhaps other eneral classi ed e sites. he intention is to mar et the properties roadly across different plat orms. encies also share property listin s ith one another so there are sharin relationships that have een set up contractually. ut to do all this its necessary to trans er data among one another, and et een your a ency and rivate roperty and so on so youre repeatin the effort many times. ach time you send it out its re uired to e in a different ormat data transmission et een each other and et een mar etin plat orms ecomes uite costly and ra mented. he ene ts o an pstream model o eyond the issue o control. here s a massive time savin too ecause it avoids repetition. ne su mission o a listin thats it.
hat happens at rivate roperty is that e a re ate listin s rom many di erent estate a encies hich means every a ency their system has to eed listin s into us says ray. e have a speci c e service or (application pro rammin inter ace) that allo s that to happen and so have others. The standardisation of listin s is another ene t he says ll the a encies can decide precisely hich data or each listin oes into that s itch or arehouse or e ample photo raphs a map and so on. LOCAL BENEFITS ould an pstream type concept e ene cial to the outh rican mar et oldin elieves so. ependin on hat the de nition o pstream in ormation is and rom my point of view, its e tremely road theres no dou t this ould e o ene t to residential practitioners. thin its inevita le. hether its an pstream residential industry pro ect or a portal in ormation pro ect its comin . ould e very surprised i hat plays out in merica doesnt play out here. ray is more cautious thin it s hi hly comple perhaps too comple . t s technically di cult to do e ve een doin it or a lon time so e understand hats involved. echnically its uite scary to consider one system to rule them all. ut can see the need or it in a outh rican conte t. ou have a num er o different real estate rands many ith very similar mar et positions and they share a lot o the same concerns around hat the di ital uture loo s li e or outh rican real estate they ant to e more involved in that conversation. ray adds or a usiness li e ours already in the usiness o a re ation or a lon time it doesn t really chan e our orld. ltimately
the ene t o the portal is the interaction ith consumers. e or very hard on the consumer e perience in or in directly ith property shoppers so dont thin thats oin to o a ay re ardless o the s itch or pstream ein in place. ur at rivate roperty is to or closely ith our real estate partners so e intend to support their efforts in this re ard. an e ou o is ully ehind the pstream concept y creatin a data arehouse or repository li e pstream a ents are in a position to ta e ac control o their o n data. hey ill then e in a position to determine uality availa ility and, most importantly cannot e dis intermediated in the process. e ou elieves thats a crucial actor. e adds ve seen a comment rom a car dealership in the statin somethin li e e paid portals to advertise our vehicles or sale. o they are eneratin uyers and e have to pay them or the uyers that ere enerated y advertisin our vehicles . nou h said. WHAT IS RPR-UPSTREAM? In a nutshell, the National Association of Realtors (NAR) â€“ via its wholly owned Realtors Property Resource (RPR) subsidiary â€“ partnered with UpStream RE, LLC. This is a company formed by a coalition of brokerages, networks and national ranchises. pstream in consultation ith ill develop a sin le online system or all listin data posted y all real estate ro era es creatin a sin le ac end entry point or distri utin listin s to other sites. n other words, this new middleman data plat orm ill e the holdin house et een real-estate rms and s and others.
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ASOUTH AFRICAN FIRST!
In association with
HOUZZ-ITSHOWSYOU HOWTOMAKEITBIG INPROPERTY
CROWDFUNDING: A FRESH TAKE ON PROPERTY INVESTOR AND DEVELOPER RETURNS GEORGINA GUEDES
Property crowdfunding, in which developers attempt to cash in on the potential of “the crowd” to raise money for developments, is garnering global attention. It hasn’t made great strides into Africa yet, but some companies are taking the first tentative steps
roperty crowdfunding is one way for smaller developers and investors to access the tough property development market. Their individual investments are modest, but the total sum is large, and they then enjoy a split of the revenue generated through rental or sale. For developers, it presents a great opportunity to market a property on a new platform, and to obtain sufficient capital for the development to proceed. The potential investor “crowd” differs widely. Some crowdfunding platforms in the UK target young people who can’t raise the funds for a deposit on their own home, but who still want to invest in fractional ownership of buy-to-let properties. At the other end of the scale is the more typical developer model, where investors put money into a development and then enjoy the returns.
CROWDFUNDING IN SOUTHERN AFRICA Realty Africa is the second type of crowdfunding platform, providing investors with investment opportunities in property developments in Southern Africa, and providing developers with a platform to showcase their plans and attract investment. t is elieved to e the rst plat orm o its ind in the re ion. “We see it as part of our mission to spread the word on property
crowdfunding and how this can be a tool for business owners to develop their pro ect as ell as a tool or them to mar et themselves lo ally and uild a trac record says ri van eten co ounder and o ealty rica. t the same time, it can be a tool for people globally to see that Southern Africa holds many opportunities for investment, and that investing in this beautiful continent doesnt have to e as scary as some mi ht thin . Most people have heard of crowdfunding as applied to creative endeavours, such as music artists ho und their al ums throu h plat orms li e ic starter. roperty cro d undin differs sli htly. here are different types donation ased re ards ased lendin ased and e uity ased. n re ards ased cro d undin plat orms you are not allo ed to offer monetary re ards. Property crowdfunding, on the other hand, is all about investors investing directly into projects for developing property or other types of infrastructure developments and ettin a monetary return says an eten. Realty Africa ran a campaign on crowdfunding website Indiegogo to build lo al a areness and to attract some undin or its start up company. t didnt reach its tar et ut an eten elieves that rom a mar etin perspective they ere success ul. e ne in advance that e ouldnt reach our undin tar et ecause ndie o o ould not allo us to offer shares in the company as a per . e chose ndie o o ecause o its lo al reach not many SEPTEMBER/OCTOBER 2015
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platforms out there have a global reach yet. In parallel, we used alternative ways to attract funding for our company.” FACILITATING CROWDFUNDING With its crowdfunding projects now up and running, Realty Africa facilitates the investment process in numerous ways. A thorough checklist means investors have the opportunity to invest in projects that passed a rigorous due diligence process. “Investors are not investing in Realty Africa as a company, or in an investment fund. They are investing directly into a project. They can choose from any of the projects available on the website at any time,” says Van Eeten. The timeframes of Realty Africa investment projects vary, spanning one year for a build-andsell project to 10 years for a hotel or ecolodge
Realty Africa is currently looking for projects in three countries: Zimbabwe, Botswana and South Africa, and it intends taking the concept into other Southern African countries. Breaking into this new market with a new investment proposition is challenging because, as Van Eeten puts it, “the road is unpaved”. AFRICANS INVESTING ELSEWHERE While external investors are turning to Africa for its great growth potential as an emerging market, at the same time, many local investors are keen to access real-estate investment opportunities in leading stable markets around the world. An organisation called Wealth Migrate now has o ces in outh rica and offers cro d unded real-estate transactions with proven local operators in foreign countries. Members can gain access to
HENRY FORD’S MODEL T REVOLUTIONISED TRANSPORTATION, BRINGING THE CAR TO THE MASSES. SIMILARLY, REAL ESTATE CROWDFUNDING WILL CHANGE THE PROPERTY INVESTMENT LANDSCAPE, ALLOWING MORE PEOPLE TO GAIN ACCESS TO GREAT INVESTMENT OPPORTUNITIES SCOTT PICKEN, CEO OF WEALTH MIGRATE
development, and will then operate for a number of years. Realty Africa is also attempting to source projects for investors looking for impact investments such as social housing. Patrick Chella, cofounder and CEO of Realty Africa, says many people are hoping to participate in an investment class that helps local communities to advance. These could include social housing projects, where they get a return but also help a local community to develop. “We’re looking at not only properties in the strictest sense of how you would define a property, but also at renewable energy plants, ecolodges or those types of sustainable developments.” The question that might be on everybody’s lips is a out the inds o returns offered. here is no standard rule of thumb. Returns vary depending on the location, duration and complexity of the project. Investments start at $1,000. 44
details of every investment, review due diligence reports prior to investing, and manage their own real-estate portfolio online. The platform will also assist with the conversion of South African currencies to and from the currency of the country of investment. Says Wealth Migrate CEO Scott Picken: “Henry Ford’s Model T revolutionised transportation, bringing the car to the masses. Similarly, real estate crowdfunding will change the property investment landscape, allowing more people to gain access to great investment opportunities.” While crowdfunded property development is still in its early stages globally, and especially in outhern rica it loo s set to ta e off oth as a property development tool and as an investment platform. Once the foundations of this kind of enterprise have been laid, the sky is the limit for its participants.
How property crowdfunding works 1. CREATE AN ACCOUNT with a property crowdfunding platform. 2. BROWSE the available investment opportunities and select one you like, based on projected timeframes and returns.
3. VERIFY your identity and make your investment – if the target is not met within the timeframe, your funds will be returned.
4. MANAGE YOUR PORTFOLIO of investments online.
5. WHEN each investment matures, receive your returns.
Top platforms The leading global property crowdfunding platforms, according to crowdcrux.com are
• FUNDRISE • REALTY MOGUL • REALTYSHARES • CROWDSTREET • COLLAPERTY • GROUNDBREAKER • CROWDBARON • IFUNDING • PRODIGY NETWORK • PATCH OF LAND
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Realty Africa facilitates crowdfunding investments by • CHECKING INVESTORS by using a full KYC (know your customer) process to make sure no terrorist financing or money laundering is involved
• CHECKING PROJECTS for validity with the help of Deloitte
• SECURING THE PROJECT for the investor with a mortgage bond and securing the money on escrow accounts
• USING A FIDUCIARY AGENT (or similar) to represent the investor in the local market as many investors are offshore.
Plans for one of Realty Africa’s crowdfunded projects
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Have your say In this issue’s poll we focus on expanding our reach within South Africa’s property industry. We want to know what you are looking for. Go online now and vote in our poll to answer these 3 questions
WHAT IS THE MOST IMPORTANT ELEMENT OF A HOUSE, FROM A BUYER’S PERSPECTIVE?
WHAT KIND OF CONTENT WOULD YOU LIKE TO SEE ONLINE?
DO YOU USE APPS AND NEW TECHNOLOGY TO MAKE YOUR JOB EASIER?
The question in our next issue: How has 2015 compared with 2014, in terms of sales? 46
Poll analysis powered by opinionstage.com All data correct at time of print
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Top Regional Winner Western Cape MortgageMax City Property Finance George Benade
MortgageMax Champions celebrate in the Pearl of the South The Pearl of the South or Phuket, as it is most commonly known, is Thailand’s largest island, abundant in white powdery beaches, clear blue waters and tropial in-land forests. In June, the Amari Spa and Resort Hotel located, in Phuket, welcomed the MortgageMax Top Achievers, to celebrate their past year’s successes. The winners were treated to all Phuket has to offer - vibrant night life, breath-taking scenery and exhilarating sporting and cultural experiences. The trip kicked off with a prestigious gala dinner at the Sala Bua Restaurant where the main sponsor, Standard Bank, together with MortgageMax management, recognised business partners’ achievements, in what proved to be a memorable and inspiring awards evening. Top Regional Winner Greater PTA | MortgageMax Centurion Elmarie Bouwer
“Congratulations, to all our winning business partners! We thank you for your continuous support in making MortgageMax the No.1 independent origination company in South Africa. Also a special word of thanks to our sponsor, Standard Bank, for enabling this hugely successful trip”, says Jors 10 year Achievement Award | Bond Logic Sanet van der Walt from Western Cape
van Niekerk, CEO of MortgageMax.
Top Regional Winner Greater JHB | MortgageMax Exclusive Home Loans Graham Moodie (Also received a 10 year Achievement Award)
Top Regional Winner KZN | MortgageMax Direct Bond Yolanda Cornelius
Top National Winners: End User Finance (Coenraad Laggasick), IBO (Etienne Roodt), BondExcel (Geoff Els) With Jors van Niekerk CEO MortgageMax and Rosa Liddiard, Standard Bank, Head: Channel Propositions
TO P T I P S MEYER DE WAAL
Five things conveyancers wish all estate agents knew TIME IS MONEY
Or so they say. In today’s technology-driven world, there are myriad ways to increase productivity and, ultimately, sales. If 28 years of conveyancing has taught me one thing, it is to put the needs of the client before your bottom line, and often this works in your favour anyway.
WORK SMART, NOT HARD
The simplest, easiest way to avoid disappointment is to ensure your clients are preuali ed and to no ho much they uali y for. As much as we would like to sell every buyer a dream home, sometimes it’s just not possible. Too many agents spend hours and hours of valuable time showing houses to potential uyers ho either cant afford the properties they’re looking at or who don’t qualify for a loan at all. To avoid “selling” the same house four or ve times loo to the ne online pre uali yin services available and make sure your potential home buyers are credible.
KNOW YOUR STUFF
Look out for the multiple initiatives, products and government subsidies being launched that can save your clients money, and can be the edge that guarantees your sale. For example, the Finance Linked Individual Subsidy Plan (FLISP) is largely ignored because of a lack of knowledge about ho uali es and ho to o a out obtaining the subsidy. As well as constituting savings upfront, they could end up saving the home owner hundreds of thousands of rands over the course of their home loan.
Try an education-based sales approach where you can inform buyers of the various financial responsibilities and pitfalls that could occur during and after a sale AN INFORMED BUYER IS A SAFE BUYER
More than 50% of home buyers are entering the mar et or the rst time. ten these ne clients are extremely daunted by the property market and lack the basic know-how for buying a house. This becomes even more apparent on the nancial side hen transaction costs he ty deposits and home-loan repayments can leave buyers dazed and confused. Try an education-based sales approach where you can in orm uyers o the various nancial responsibilities and pitfalls that could occur during and after a sale. This will give your client peace of mind and it will generate a relationship of trust that could lead to further sales or wordof-mouth referrals.
Meyer de Waal is a practising conveyancing attorney at Oosthuizen & Co Meyer de Waal. With 35 years of experience in realestate matters and estate law, he has been involved in various innovative housing solutions and educational programmes on the market. oostco.co.za
LAY THE GROUNDWORK
Property sales are often complicated, protracted affairs so ma in sure that the proper groundwork is in place helps in the long run. Ensure the correct checks have been made: many times, a sales agreement is not 100% complete, property descriptions are incorrect, exclusive-use areas are left out or properties are sold without a distinction between “occupation with tenants” and “vacant” occupation. Sometimes important information for the execution of a legal notice is omitted, such as the addresses of buyers and sellers. Every detail that you ve si ned off ready to o is one step closer to closing a deal. Your seller will be happy with a quick sale and your longterm reputation will be enhanced.
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WHAT BUYERS WISH AGENTS KNEW LISA DEWBERRY
THE QUESTION TO FOUR RECENT RESIDENTIAL BUYERS:
What do you wish estate agents knew about the properties you viewed that could have smoothed the process and sealed the deal
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THEIR ANSWERS: MOHAMED FAREED BALLIM | NEW HOUSE IN EMMARENTIA, JOHANNESBURG I bought a three-bedroom, two-bathroom house on 31 December 2014, when everyone was on holiday, and I am happy with my purchase. But I reached a stage in the house-hunting cycle when it became a chore – I went from falling in love with houses to getting into a bidding war for properties. I was even asked if I would consider an auction on a property two other buyers were keen on. Estate agents tend to think that buyers are wasting their time if they view various show houses and are not interested. However, the property I view needs to “talk” to me. Every seller comes with a history and it would be wonderful for an estate agent to take time to get to know those requirements. The usual questionnaire of re uirements lled in at a vie in doesnt help. Also, estate agents often promise to keep you posted a out ne listin s hich usually doesnt happen. The service from a few estate agents has een superior ut ith others didnt ant to o to the show house because the estate agent had been rude to my family at past viewings. A family that oes alon to vie sho houses ont do that unless they are seriously interested in ndin a house. In a nutshell, many agents can become better by simply building a relationship with each potential buyer. LAUREN SPROUT | NEW HOUSE IN BRENTWOOD PARK, BENONI I bought a two-bedroom, one-bathroom house off plan hich as completed in cto er . In the beginning stages of the buying process, the estate a ent didnt have a sho house to vie advising me that it was not standard practice. After complaining that I wanted to see the quality of workmanship before buying, the agent arranged a viewing of a recently built home in the complex. I was provided with spec sheets and photographs only after I asked. Answers to questions such as whether towel rails and toilet roll holders were installed, or whether the interior walls would be smooth or textured, were not volunteered.
Estate agents need to be informed of exactly hat they are sellin off plan. ther aspects ere not mentioned, such as having to pay for and plant my own grass, and install a garage motor and plug for it, an extractor fan and plug for that. A buyer needs this information because cutting into a wall to add features after building can cause cracking. Estate agents need to point out small things that may affect the uyers ud et later. had added extra items to the contract before building commenced, huge commissions were added and it was more expensive than if I had added items during building. Later on site, I met the suppliers ttin items to my home and ound it as cheaper to go directly to the suppliers. Agents should also know their measurements – I asked for a second bedroom to be made larger by 1,5m, but on the contract, the agent wrote that the main bedroom was to be made larger by a brick and a half.
THE PROPERTY I VIEW NEEDS TO ‘TALK’ TO ME. EVERY SELLER COMES WITH A HISTORY AND IT WOULD BE WONDERFUL FOR AN ESTATE AGENT TO TAKE TIME TO GET TO KNOW THOSE REQUIREMENTS
SHAUN VERMEULEN | NEW HOUSE IN MEYERSDAL, ALBERTON I bought a house in a security estate in June 2015. The most important thing I want estate agents to know is that not all clients are the same. In my experience, most agents tend to think that women are only interested in the kitchen, while men are only interested in the entertainment area. In our case, this couldnt e urther rom the truth, because, although we had a few ideas of what we were looking for, we had no blueprint of exactly what we wanted. Estate agents should al ays nd out e actly hat the client is loo in for, or at least get an idea, before proposing any vie in s to clients. you can nd an estate a ent that is there to partner with you in purchasing a new house, instead of one trying to sell what they have in stoc the relationship ill e ene cial to both parties. GIDEON JACOBS | NEW SEMI-DETACHED HOUSE IN VREDEHOEK, CAPE TOWN I searched for a few years, and for three months intensively, and I found my two-bedroom, twobathroom semi-detached home in March 2015. Many properties listed on property websites, especially the decent ones, are sold extremely quickly. In Cape Town, you cant e too chee y ith your offer as demand or ood properties is hi h so offered the ull price or mine. ound there were a few plumbing issues with my new property and the estate agent did assist, but only in raising the issue rather than resolving it. The transfer of the property usually takes a few months, but went through before the plumbing issues were resolved. I would have appreciated it if the agent had voiced the plumbing issues to me upfront, and offered to arran e or the previous o ner to pay or it as ell as arran ed the plum ers appointments. I ended up becoming the middle person between the plumber and the estate agent, so would have preferred it if the agent had handled those issues.
MOHAMED FAREED BALLIM
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M O T I VAT I O N ERIK VERMEULEN
The power of choice T
here is a relatively new science called behavioural economics that should become prescribed studying for anyone doing business with people. It’s about explaining, or trying to explain, the irrationality behind the decisions we make – particularly when it comes to saving or spending money, honesty and numerous other everyday choices that we might take for granted. One of the major issues potential buyers in the housing market face today is choice: there’s too much of it. So, in an attempt to get prospective homeowners to buy from us, we may fail to understand the impact of choice on decision-making. In a controlled experiment (by psychologists Sheena Iyengar and Mark Lepper), shoppers walked past a display of six jams and another of 24 jams. While 40% of shoppers stopped at the small display and 60% at the larger one, their purchasing behaviour differed remarkably. A mere 3% of shoppers purchased jams from the 24-jar display, despite being offered a discount. But 30% of people purchased jam from the smaller display.
YOU SEE, OFFERING A LOT OF CHOICE IS GREAT FOR ATTRACTING ATTENTION. BUT IT’S NOT GREAT FOR GETTING PEOPLE TO BUY. Generally, people don’t like making choices so when there’s too much to choose from they end up abdicating the choice and taking no action at all. Choice paralysis often results as people tend to become confused by all the options.
People hate losing more than they like winning, thus the choice becomes fairly straightforward. They tend to go for the middle one as it represents the ‘best’ in terms of this bias
AN OFTEN-IGNORED EFFECT OF TOO MUCH CHOICE IS REGRET OR SATISFACTION ONCE A CHOICE HAS BEEN MADE.
eople hate losin . here ore they o ten re ect on the choices they’ve made post-purchase or after the fact. This is what led to the inclusion o coolin off clauses in many purchasin contracts for bigger purchases such as houses and cars. Findings show that when people have too much choice, and feel that they were pressured in any way to make a choice, they tend to experience more regret than at times when they were given fewer choices.
I saw this happen with my wife when we were looking at purchasing a new home a few years ago. We decided on the area, the price range and then – knowing what I do from my line of work – I narrowed our search to four homes. At every potential home, she told me what she liked about it but then did her own online search. Then we looked at several other homes and made the inevitable comparisons afterwards. “I like the kitchen in house one, but not the bathrooms. I prefer the bathrooms in house three she d say. e ended up spendin entire days ein chauffeured around y estate agents who showed us far too many houses. ventually called off the search and we stopped looking for a few months. There was simply too much choice.
BEHAVIOURAL RESEARCH SUGGESTS THAT THE BEST WAY TO
NUDGE PEOPLE TOWARDS MAKING A DECISION IS BY CAREFULLY MANAGING THEIR AVAILABLE CHOICES. When people have two choices, say, between medium and large, they’ll choose medium (the smaller or cheaper option) the majority of the time. How can we get them to buy the larger, more expensive option? Simple: give them a third option – an even bigger, more expensive choice.
What happens now is that people start weighing up the decision in terms of what they can gain or lose by taking each one of the three. People hate losing more than they like winning, thus the choice becomes fairly straightforward. They tend to go for the middle one as it represents the est in terms o this bias. They don’t feel they’re losing by choosing the smallest one; at the same time they feel they are ainin y not uyin the e pensive one. By managing our clients’ choices, through understanding these three principles, we make it easier for them to make decisions they feel happier about once they’ve made the choice.
Erik Vermeulen is a behavioural economics strategist who helps companies better understand the behaviour of their customers and employees, in order to be more effective and profitable. erikvermeulen.com
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LIFE HACKS TRACEY FOULKES
An organised life O
ne of the biggest fallacies about productivity is that to be a great employee, you always need to be available
In today’s workplace, it’s no longer enough to just show up. While that might ell e true there is a vast difference between showing up and being actively engaged. So, before unpacking this myth of 24/7 availability, let’s take a quick look at some ures on en a ement. According to the worldwide study Gallup’s State of the Global Workplace, spanning 180 million employees in more than 142 countries, only 13% of employees are “actively engaged” at work. This leaves a staggering 63% who are “not engaged” (lacking motivation) and therefore less likely to drive company goals and outcomes, and 24% “actively disen a ed that is unhappy ineffective or possibly even breeding negativity like ild re throu hout your or anisation. you pre er to loo at it differently there were approximately 900 million workers “not engaged” and 340 million “actively disengaged” around the world between 2011 and 2012 (when the study was curated). You are, in all likelihood – as currently shrinking department sizes cause an escalated
But being available at any time isn’t the answer to being more engaged. It’s like showing up without an outcome, and that’s worth diddly-squat to your efficiency and your company’s financial wellbeing
workload – busier than ever before. With South African unemployment levels staggeringly high (around 25% in June this year), changing technology and a whole new generation entering the workplace, it’s fair to say that what you ere doin ve years a o to et y read not engaged) isn’t enough today. And there you were, thinking you were adding value ...
This picture could well be the reason many people fall prey to believing that they always need to be available. But being available at any time isn’t the answer to being more engaged. It’s like showing up without an outcome, and that s orth diddly s uat to your e ciency and your company s nancial ell ein . Fortunately, there are alternatives that you can easily apply to be more amazing. Here’s how. What productivity lies are you telling yourself? To be a great employee, you always need to be available. Wrong. The “always on” mentality breeds a “seldom on” performance level. Counterintuitive as it may sound, taking a break is the most valuable thing you can do. It’s similar to working on a slow computer. The prefrontal cortex of the brain is responsible for conscious thinking,
According to the worldwide study Gallup’s State of the Global Workplace, spanning 180 million employees over 142 countries, only 13% of employees are ‘actively engaged’ at work 54
reasoning and processing. Without breaking your day, this part of the brain slows down, just like the computer. It becomes di cult to remem er detail creativity is sti ed and actions ecome slu ish. If you are merely showing up at work like the vast majority, as the Gallup study suggests, you might want to reconsider your belief system ri ht no and ma e a shi t or three SET BOUNDARIES AND COMMUNICATE THEM
Start by deciding what will work well for you, while bearing in mind that you coexist as part of a team working towards the good of your company. You’ll need to take your employment contract into consideration when setting these de ned availa ility parameters. o have a ene ts driven conversation ith your oss. Especially if working after business hours is a standard part of your job, they need to understand that taking time out from work daily is key to delivering your best work, so you can make a contribution to the company or team. Lastly, communicate with your colleagues. If your new work habits change, you can expect resentment. e mind ul o sharin the ene ts of implementing this change with the team, and get them on board to try it out. Better still, if they are feeling edgy about always having to be available or assisting with the admin while you appear to e collectin the re ards nd a collective voice on what system can work best for your department and how to achieve that. Determine your team’s roles and agree on acceptable communication platforms and times outside of standard work times.
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CREATE A ROUTINE AND PROTOCOL
Now it’s time for implementation. Think of it as putting together a contract or protocol to which your team can adhere. While you’re at it, list expectations to help everyone stay engaged without having to be available 24/7. If someone has to be available in the case of emergency de ne hat an emer ency is create a roster and rotate shifts. Let everyone know who is on duty when, and resist taking a call when it’s not your turn. APPOINT AN ACCOUNTABILITY BUDDY
Change can be challenging without selfdiscipline and, if you feel you might falter, enlist the help of a buddy (a colleague or your personal partner to help you stay on trac . Periodic check-ins via text message or email might be what helps you implement (and maintain your ne routine provided youre not checking for updates 24/7. Removing the
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expectation of being constantly on call (and the uilt and resentment it uilds ill rin a sense of self-liberation and boost your engagement. P.S. In case you’re wondering how South Africa fared in the Gallup study’s results: engaged: 9%; not engaged: 46%; actively disengaged: 45%. Ouch!
Tracey Foulkes is cofounder and CEO of multinational company This is Productivity. She uses her understanding of how people function optimally to inspire teams to redefine their work. This is done through a twist on traditional time management and team productivity, so they can reclaim at least 28% of their working day. thisisproductivity.com
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I HAVE LEARNED THAT EVEN THE SMALLEST HOUSE CAN BE A HOME HENRY DAVID THOREAU
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Published on Sep 1, 2015
In the Sep/Oct issue of Property Professional we take a look at property crowdfunding, the accuracy of SA property rights, and we chat with...