Property Professional July/August 2017 by Property Professional

JULY/AUGUST 2017

THE SOUTH AFRICAN PROPERTY INDUSTRY MAGAZINE

INDUSTRY START-UPS:

MOVERS SHAKING UP THE VIRTUAL SPACE I N T E RV IE W

JUST PROPERTY’S

PAUL STEVENS ON GROWING A PROPERTY BUSINESS

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PROPOSED CHANGES TO THE PROPERTY PRACTITIONERS BILL

IT COULD AFFECT YOUR JOB

SO YOUR CL I E NTS C AN’T AFFORD TOP S U B U RB S

GOOD-VALUE GAUTENG ALTERNATIVES

20/06/2017 09:05

INDUSTRY NEWS

here is never a dull moment in the South African political or financial world. A state of flux is now the norm. If nothing else, savvy property investors – your potential clients – will be kept on their toes looking for opportunities. The hot tip of the moment is that Joburg’s residential market is due for an upswing and good offers can be found (page 26). Following on from that, if your clients can’t justify paying a premium for a top suburb, Sungula Nkabinde suggests more affordable Gauteng alternatives (page 34). In our cover story, Just Property Group’s Paul Stevens tells Georgina Guedes about the importance of diversification even in leaner times. The company now deals with much more than rentals and has taken a franchise model to new levels. That brings us to property and technology, a recurring theme in our local news section. It is also explored in depth in Vanessa Clark’s feature (page 15) – read about some enterprising tech start-ups and how innovation should be part of your traditional agency model. As always, we value your input in the online debate at propertyprofessional.co.za or sign up to our e-newsletter by clicking on the newsletter tab.

TOOLS OF THE TRADE

Catherine Davis PUBLISHED BY THE CREATIVE GROUP 6 Beach Road, Old Castle Brewery, Woodstock 7925 087 828 0423 facebook.com/PropertyProfessional twitter.com/Property_Prof

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WHAT PROPERTY START-UPS SEEM TO BE DOING RIGHT IS AUSTRALIA’S PRICING BUBBLE LIKELY TO POP?

24 32 Just Property’s

PAUL STEVENS on starting small

Why Joburg could be tipped for a residential upswing

Personal branding can make all the difference

THE CREATIVE GROUP MANAGING DIRECTOR Terence Hewitt terence.hewitt@thecreativegroup.info Editor Kim Maxwell Content business manager Catherine Davis Creative director Leah de Jager Copy editor Kirsty Wilkins Group digital editor Lauren Joubert

ADVERTISING Sales and marketing manager Michèle Jones michele.jones@thecreativegroup.info | 084 246 8105 Advertising, production and subscriptions Jackie Maritz jackie.maritz@thecreativegoup.info Printing Paarl Media | Disclaimer: the publisher of this magazine gives no warranties, guarantees or assurances and makes no representation regarding goods or services advertised within. Information correct at time of printing. © 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 unsolicited material.

19/06/2017 15:25

LOCAL NEWS

LOCAL INDUSTRY NEWS HIGHEST VALUED PROPERTY SOLD IN HOUT BAY

things you should know about proposed changes to the Property Practitioners Bill 6 FIDELITY FUND

1 DEFINITIONS

The Bill would extend the definition of an estate agent to a property practitioner, which could include bank employees, bond originators and building caretakers. This wider definition will mean the EAAB (the authority in future) will be inundated.

2 OMBUDSMAN

R35m

the listing price of a Riverside Terrace home sold in June, within 10% of the seller’s asking price. A foreign buyer closed the deal.

heme

rties‚

The introduction of an ombudsman, who in turn can appoint a mediator. There could be a faster resolution of conflicts but it also leads to vast powers with overlapping and unclear jurisdictions.

3 COMPOSITION

OF THE BOARD

The number of board members would be reduced to a maximum of 12. The Minister can and will appoint at least one person with knowledge of the industry.

Foreign interest in our luxury market is not dwindling, despite the recent political and economic shifts in the country

Inspectors would have vast powers of inspection and the ability to seize documents and records.

Stephan Cross, sales manager, Seeﬀ Properties in Hout Bay and Llandudno

The Bill proposes that consumers only be protected against the theft of trust funds from the trust account of a regular estate agent.

4 INSPECTIONS

5 FIDELITY FUND

CERTIFICATES

The current Act stipulates that an estate agent must be “issued” with a Fidelity Fund Certificate to earn commission. The new Bill refers to “possession”.

7 TRUST ACCOUNTS Currently all estate agencies must have trust accounts. The Bill alleviates this somewhat by giving the Minister the authority to grant exemptions – but it does not go far enough.

8 REGISTRATION All directors of companies and members of closed corporations will have to be registered as principals and thereby be qualified to be principals. Currently the EAAB allows nonexecutive directors to apply for exemption from qualification as principals.

9 TAX CLEARANCE The Bill requires that all agents (not just agencies) submit tax clearance certificates annually. This could burden SARS and agents in dispute could be refused registration.

10 BEE CERTIFICATES All agents – not just agencies – will be obligated to submit BEE certificates. The problem: no conditions have been stipulated.

Source: Jan le Roux, CEO of Rebosa

PROPERTYPROFESSIONAL.CO.ZA

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19/06/2017 13:56

“How can you help us realise our vision?” “We’re geared for it.”

In the real estate sector you need a partner with fortitude, experience and know-how to see you through. With our capabilities and deep local sector insights we have innovative solutions to meet your needs. Let us be your partner for wherever your ambition takes you. standardbank.co.za/business

Authorised financial services and registered credit provider (NCRCP15). The Standard Bank of South Africa Limited (Reg. No. 1962/000738/06). Moving Forward is a trademark of The Standard Bank of South Africa Limited. SBSA 230709 – 1/16

LOCAL NEWS

The Property Professional newsletter offers

DYNAMIC REAL ESTATE DUO

usiness success is based on hard work, sound marketing and good follow-up, whereby clients cannot fleetingly pass through the door, forgotten after the paperwork is signed. This approach has served Realty1 Lynnwood principal and franchisees Willem and Letsie Coetzee for more than 20 years, earning them professional and personal accolades. Says Willem: “Marketing is critical but taking care of clients, such as calling them for their birthdays, is the personal touch that keeps a business relevant in tough economic times.” Thanks to this philosophy, the couple walked away with IEASA’s awards for Top Realtor and Top Principal for the Northern Region several times. Willem has been Realty1’s top national agent for a decade. Says Willem: “Selling older properties (Lynnwood is a long-established suburb with homes of 40 years to 55 years old) requires different skills to selling the newer ones. It demands showing clients the potential an older home can have and how the house can be modernised to today’s lifestyles, expanding minds to a new vision.”

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INDUSTRY INSIGHTS,

expert commentary, video interviews and news

BALANCED ANALYSIS

of market trends and industry affairs

EXPERT ADVICE and

useful how-tos to streamline your company

A COMMUNITY of

20,000 estate agents

• Sign up at propertyprofessional.co.za • Click on the NEWSLETTER tab

24/7 SHOW HOUSES Creative software development studio Sozo Labs says virtual reality and augmented reality is on the verge of revolutionising the South African real estate industry. Virtual walkthroughs allow their prospective buyers and tenants to view multiple properties in the residential, commercial or industrial sectors in a real-life, interactive way. Says Gerrit Kruger, managing director of Sozo Labs: “Buyers have the opportunity to view a property and its surroundings before they see it in person; this lessens the chances of buyers wasting time on a property that isn’t suitable for them.” Kruger says real estate agencies are realising that they have to provide something that will allow them to stand out and secure more sole mandates while making the buyers’ experience smoother. “Hotels, venues and highend property have been using the technology for a while, but it has not penetrated the general property market yet, which we feel will change soon. Once consumers get used to 3D scans, we feel demand will keep going up.”

SOZO LABS’ PROPERTY SERVICES

Three-dimensional scans

using a Matterport camera (3D representation of a real-world location). The link from Matterport can be embedded into a client’s website and linked to their marketing material via a QR code. Mobile property app listing the scans. Custom mobile app development. 3D virtual reality tours of new, not yet built property developments using 3D computer models.

19/06/2017 13:56

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2017/06/23

4:23 PM

Variety is the Spice for life... At Chas Everitt, we have developed a truly South African Franchise recipe for success. The latest products, information systems and service ensure the 37 years of experience gained in the South African property industry coupled with international affiliations will deliver solid and enduring benefits for you.

Franchises

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Contact Barry Davies 082 441 3601 or Berry Everitt 083 644 0001 to find out about more available opportunities.

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LOCAL NEWS

Building blocks Property is one of the biggest expenses for most businesses. If managed with the right partner, it can unlock more value and long-term returns, and allow a company to align more closely with a B-BBEE scorecard. New majority black-owned property company Izandla Property is powered by Investec Property – supporting with skills, expertise and knowledge – and Investec Property Fund (IPF) – the capital partner of Izandla Property. Izandla Property’s majority shareholding is held by the Entrepreneurship Development Trust (EDT), a broad-based charitable trust that facilitates broader societal benefits through educational and entrepreneurial initiatives. Izandla Property aims to become a self-sustaining entity. Says Fani Titi, chairman of the EDT and Investec Limited: “The property sector has been notoriously difficult for many to access due to its large capital requirements. Through the EDT, we can provide the necessary bridge between a powerful business sector and the people in our communities.”

NEW ONLINE SPACE MARKETPLACE

ahi Space Share has gone live. At this peer-to-peer online marketplace, technology connects owners of storage space or parking with potential renters. Founded in 2016 by Cape Town entrepreneurs Michael Hodgson and Daniel Bailey, wahi.co.za offers both commercial and residential rental space. Wahi means “get” in Swahili and “space” in Maori. The founders say the start-up aims to change the accepted status quo of the country's self-storage industry, giving South Africans the opportunity to become earners. “We give property owners the opportunity to generate bonus annuity income from their spare space and also allow renters to achieve cost efficiency and convenience by converging online,” says Hodgson. “You could see it as the Airbnb of spare space, where the commodity is something many of us own without even knowing it and many others – often our neighbours – also need.”

PROPERTYPROFESSIONAL.CO.ZA

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1 10 IN

South Africans choose a gated estate when buying residential property

South Africa has close to

7,000 355,000 R800bn

freehold and sectional scheme estates with about

active residential properties‚ valued at

Source: Lightstone Property

19/06/2017 13:56

The home is where special bonds are formed.

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WHAT’S ON

All you need to know to stay plugged in to the property industry in South Africa

JULY

16-28 31-3

WHAT SAPOA PROPERTY DEVELOPMENT PROGRAMME WHERE G raduate School of Business, University of Cape Town CONTACT bit.ly/2qHwSQT

WHAT IEASA PROPERTY INDUCTION WORKSHOP WHERE HB Forum Building, Val de Grace, Pretoria CONTACT bit.ly/2qzw2bp

BRIDGET MCNULTY

PROPERTY TREND: SURBAN HOMES

Where suburban meets urban: that’s where you’ll find surban, an increasingly popular trend both locally and internationally

AUGUST

10 23-24

WHAT SACSC RETAIL IMMERSION PROGRAMME (WORKSHOP FOUR) WHERE Gateway Hotel, Umhlanga CONTACT bit.ly/2iSDwj5

WHAT CAPE CONSTRUCTION TRADE EXPO WHERE CTICC, Cape Town CONTACT bit.ly/1K9tmoS

SEPTEMBER

4-6 13-15

WHAT NAMA INDABA WHERE Emperors Palace, Joburg CONTACT bit.ly/2kHauq4

WHAT SACSC ANNUAL CONGRESS WHERE CTICC, Cape Town CONTACT bit.ly/2q6eGTT

Add to your diary now THE SAIBPP ANNUAL CONVENTION AND PROPERTY INDABA will be held this year on 2 and 3 August

at Houghton Golf Club, Johannesburg. The South African Institute of Black Practitioners (SAIBPP) focuses on transformation in real estate and the built environment, with “possibilities” the theme for this year’s gathering. Industry experts will be able to network, listen to talks by economists and business leaders, learn more about property and investment trends, as well as attend an awards dinner. saibppconvention.co.za 08

PROPERTYPROFESSIONAL.CO.ZA

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he concept of suburban homes and city living as two distinct elements is long past. But it seems that even mixed-use neighbourhoods – with residential and work amenities in one place – needs an upgrade. Enter the rise of the surban community: denser communities where various housing arrangements – townhouses, apartments, houses – are mixed with urban amenities that offer the chance to live, work and play outside of the city's core. International real estate consultants John Burns Real Estate Consulting anticipates suburban communities to account for nearly 80% of residential growth over the next 10 years compared to just 15% for urban areas. Private Property CEO Simon Bray says they’re noticing the trend in South Africa, too: “The move to surban areas is becoming more prevalent across the country. Existing suburban areas such as Fourways and Menlyn have been developed to the extent that they could be described as mini Sandtons. What’s noticeable is the number of new ‘towns’ being developed from scratch that incorporate commercial, retail, residential and lifestyle aspects.” In Durban, this can be seen adjacent to the successful Gateway surban area, where an entire decentralised residential and commercial town centre, Bridge City, is being developed. In Gauteng, Waterfall City and Modderfontein New City are multibillion-rand projects that will combine work, live and play opportunities. And in Cape Town, Century City could be considered another success story. While these surban areas are not always gated communities, many are. Says Bray, “Security definitely plays a big part in this trend in South Africa. Residents are able to work, shop and socialise within a secure area without having to venture to other less safe parts of the city.” The reasons behind this trend are simple: “Safety, shorter or no commute and lifestyle,” says Bray.

19/06/2017 13:57

Technology boost in retail centres

outh African retailers and centres are embracing technology. At Menlyn Park, a super-regional mall in Pretoria, tech advancements in the pipeline include dedicated charging stations for electric and hybrid vehicles, licence-plate recognition and the development of an analytical parking app for mobile devices that will allow users to locate their vehicles. The centre does head counts, which also tag an individual with a unique number to prevent double counting. Menlyn Park has installed smart-metering systems that ensure accurate on-time billings for shops. Menlyn Park GM Olive Ndebele says the centre’s tenants are also embracing the change. “Most of our tenants oﬀer online shopping platforms for customers and this motivates others to follow suit. Energy eﬃciency is also important so we have improved our technology with regards to air-conditioning, lifts and escalators. We are in the process of partnering up with

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Google for further technological advancements,” she says. Amanda Dilima, retail leasing consultant for the V&A Waterfont in Cape Town, says the centre is embracing technology. “We recently embarked on an exciting project that involves voice-guided location screens in the centre, which are supplemented by the mobile app. This voice guides the customer to where they wish to go in the mall in real time,” Dilima says. The app provides information to users about their current location while they navigate. Bedford Centre in Bedfordview, Germiston, launched Johannesburg’s ﬁrst virtual reality arcade in October 2016. Says South African Council of Shopping Centres CEO Amanda Stops: “It is not a matter of technology or online stores replacing the physical counterparts but rather how the two can complement each other in a harmonious way.”

19/06/2017 13:57

LOCAL NEWS

Ask the expert: C screeding trends

ement screed can be used to modernise almost any area, including floors, walls and countertops. It’s also durable, nontoxic and warmer than tiles and stones. Cemcrete marketing and sales director Joanne Sykes outlines some screed pointers to share with your clients.

EXPECT CRACKING TO OCCUR

Cement is inflexible by nature so hairline cracks are normal, adding to the look of the product. To avoid larger, more linear cracks, ensure that expansion joints are cut into the screed before applying the cement-based finish. LOOK AT EXISTING FLOORING

USE THE SERVICES OF A PROFESSIONAL

Cemcrete has a skim-on floor coating that can be used on top of tiles or floor slabs. Seal it with a matt or gloss finish and polish it for further protection and shine.

CHOOSE THE CORRECT COATING

There are products that can be applied to wet screed to strengthen it for outdoor use, creating a seamless flow between inside and out. This is also suitable for swimming pool surrounds.

Cement coatings are applied by hand and are only as good as the contractor applying them, so use someone experienced. If application errors do occur, the contractor needs to rectify them.

CREATE AN INDOOR-OUTDOOR SPACE

There are a wide range of decorative cement coatings available. To select the correct option, consider, for example, your desired finish.

4 REAL ESTATE VIDEOS TO WORK FOR YOU As a real estate professional, let The Creative Group help you market your business, brand and listings with video A walk-through of a property mimics the experience of virtual reality. The viewer has a true sense of the property and its layout. Or consider an alternative: an upmarket, high-production video gives the viewer a feel for the home while showcasing the best aspects of the property. It includes drone footage.

SELL YOUR AREA Our suburb videos show off an area and its best amenities, exploring positive aspects

of a community and highlighting good schools. Ideal for marketing your stock to its best potential, these videos will position you as the local expert and instil a sense of trust with your buyers and sellers.

PROPERTYPROFESSIONAL.CO.ZA

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Custom video uses considered editing with development marketing in mind. It includes an interview on the property with a development representative and drone footage.

TELL YOUR BRAND STORY A profile video is a professionally edited interview with a real estate professional. It could be the company CEO, a principal or an agent, and it includes a branch profile. Use it to create strong brand awareness to result in more leads.

THE CREATIVE GROUP can help you to create high-impact, consistent messaging and brand awareness for the right media platforms, with cost efficiencies in mind. All our videos are crafted towards increasing our clients’ sales and bottom line. Chat to us about your requirements: e-mail michele.jones@thecreativegroup.info

MARKET YOUR DEVELOPMENTS

Watch this showreel of some of the work we’ve produced for our clients bit.ly/2op4Dnj

IMAGES: SUPPLIED

PROMOTE YOUR PROPERTY

19/06/2017 13:57

ADVERTORIAL

HOW WILL RATINGS DOWNGRADES IMPACT THE PROPERTY MARKET

Downgrades by international ratings agencies and the knock-on effect could take its toll on residential property. Nedbank experts explain what your clients should know about market changes so they can weather the storm

nternational rating agencies assess a country’s ability to repay its debt, make interest payments on time and repay capital. The lower the credit rating, the higher the risk of default. The direct effect of being downgraded is increased cost of borrowing. So how do these recent downgrades affect the country’s property market? The economic implications depend on how the ratings downgrade impacts the rand, inflation and interest rates. Interest rates are determined by what the South African Reserve Bank (SARB) thinks is likely to happen to inflation. It is the bank’s mandate to retain annual inflation between 3-6%. And inflation’s main drivers are the exchange rate (affecting import prices), food and oil prices, and domestic demand. Other influencing factors are global investor sentiment, the country’s drought (affecting food inflation) and of course, domestic politics.

Looking ahead At this stage, the SARB is likely to keep interest rates unchanged at current levels, mainly because the rand has held relatively well since the cabinet reshuffle and ratings downgrades. However, the SARB may also opt to hike, by another 25 basis points, if

the rand comes under renewed pressure. Possible triggers are an adverse turn in global dynamics, renewed domestic political turmoil or further ratings downgrades. Nedbank believes that rate cuts will be off the table in 2017. The company also doesn’t expect any interest rate cuts this year; the first cuts should happen only in the first half of 2018. In the meantime, it will be a case of weathering the storm. Hiked interest rate levels will hurt households. Many of us are still struggling with high debt burdens. Household income has been under pressure for the past three years – partly due to higher unemployment, higher taxes and rising inflation. Household confidence has also been affected – in an uncertain political environment, consumers are more conservative in their spending patterns, avoiding credit and big ticket purchases.

The likely effect on residential property Demand for mortgages and housing could drop in 2017. The South African property market may only experience some recovery in volumes and prices later in 2018 as interest rates ease and household confidence and spending starts to accelerate. It will be a case of waiting it out.

The economic implications depend on how the ratings downgrade impacts the rand, inflation and interest rates

Help your clients understand affordability The Nedbank Instant Bond Indicator can help customers who are not yet ready to purchase a property but have started looking for a home. They don’t have an Offer to Purchase in hand, but they’re seeking a good understanding of what Nedbank will be able to give them as far as a loan is concerned. The Instant Bond Indicator is designed to give your clients a real-time scoring on their credit and affordability. Only then can they start to make a meaningful search for a home.

JULY/AUGUST 2017

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19/06/2017 13:59

TOOLS OF THE TRADE

GOODIES AND GADGETS FOR WHEN YOU’RE ON THE GO HELEN GRANGE

You’ve got marketing collateral galore – flyers, lists of potential renters and buyers, property magazines and newspaper ads. But you need a convenient place to keep them. Ideas? Try these proudly South African storage solutions

CANON LIDE 220 FLATBED SCANNER

2DO STACKABLE STORAGE

YOU NEED IT BECAUSE Contracts and documents often need to be scanned and saved to the cloud. This compact scanner offers advanced features, such as “send to cloud” functionality. THE NITTY GRITTY Expect 300dpi A4 colour in just 16 seconds and technology to enhance documents, graphics and images. You can also power and connect the scanner with a single USB cable to minimise desk clutter. THE X-FACTOR Scan a document easily before sending it to cloud-based services to access wherever you happen to be. R1,699; incredibleconnection.co.za

YOU NEED IT BECAUSE All that filing piled up on your desk? This collection of stackable storage boxes is the solution. THE NITTY GRITTY The 2DO is produced from sustainable birch plywood, printed with bold African patterns and finished by hand. It can be custom-made in different shapes, sizes and designs. THE X-FACTOR It’s unmistakably African – and it’s on wheels, so you can move it to the boardroom if you need to. R3,800; desteyl.co.za

PROPERTYPROFESSIONAL.CO.ZA

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19/06/2017 14:33

SOFA SADDLE BY MATBLAC YOU NEED IT BECAUSE This handy “saddle” folds over the arm of your couch and is exactly the right size for storing A4 or smaller magazines and leaflets. THE NITTY GRITTY The Sofa Saddle is produced by Cape Town-based leather crafters working for Matblac Studios, part of the Konnect design network established by property developers BLOK. It is available in black or brown. THE X-FACTOR Made from quality leather, the Sofa Saddle is the work of a team of artisans led by craftsman Matthew Neilson. To clean, simply wipe with a damp cloth. R1,250; blok.co.za/design/konnect

IMAGES: SUPPLIED

CARROL BOYES MAGAZINE RACK

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YOU NEED IT BECAUSE Now you can keep your property and lifestyle magazines on display in style with this chic Carrol Boyes holder. THE NITTY GRITTY It’s sizable (480 x 280 x 400), is made of quality leather and can hold at least 10 magazines. It’s perfectly stable thanks to the aluminium figurines acting as legs. THE X-FACTOR The unmistakable Carrol Boyes brand is wonderfully irreverent yet elegant. This magazine holder is yet another inspiring piece of functional art. R4,995; carrolboyes.com

19/06/2017 14:23

Qualify as an Estate Agent in just 15 months for only R3,750 Leapfrog offers a comprehensive 1 year internship program to both facilitate the completion of the logbook as well as a complete learning process about the real estate environment. Complete EAAB logbook Attend monthly in-house logbook training sessions Submit logbook to EAAB (12 months) Cost - Free Enrol with an accredited academy to complete the NQF4 59097 Real estate qualification via RPL (Recognition of Prior Learning) Time to complete - 3 months Cost R3,750 (Excl VAT)

Get in touch with us today to join a real estate company that puts their agents first. Bruce Swain 082 783 7198 bruce.swain@leapfrog.co.za

Move on Move up

PROPERTY TECH

The local online property space is expanding fast. What are these start-ups doing better or just differently?

DIGITAL PROPERTY PIE SHAKING UP THE

VANESSA CLARK

t is easy to dismiss low-commission, online estate agencies as corner cutters with unsustainable business models. They are alright for some, but surely the discerning property seller will pay for excellent service and the novice realises it would be foolish to go it alone when negotiating possibly the biggest deal of their lives? That dismissive view would be a mistake. Low commission rates, and talk of a R65,000 saving for every R1m of the selling price, might make some headline news. But property start-ups’ improved customer service, professionalism and access to advice make for compelling subheadings.

Ron Newman sold his Bryanston East house via PropertyFox, an online estate agency, in April 2017. Previously the traditional valuation process and a lack of market insights and accurate sales data on the suburb had frustrated him. “PropertyFox’s technical ability and knowledge solved this,” he says. As well as a lower cost than a traditional agency, it was the fixed fee that appealed to Newman. “There’s no dispute over negotiating with the customer, with an agent pushing for a faster sale or waiting it out for something better. With PropertyFox I never felt there was a conflicting agenda.” PropertyFox has since settled on a 1.5% commission and no fixed fee option.

JULY/AUGUST 2017

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19/06/2017 14:03

PROPERTY TECH

GAINING TRACTION

Clearly if there is a traditional industry ripe for disruption, it’s property. A determined vanguard of property technology start-ups are harnessing new digital business models, tools and technology such as mobile, cloud computing, online marketing and big data analytics to do things better than traditional estate agencies. And they are gaining traction. Property platform eazi.com launched in early 2017 with a focus on improving the seller and buyer experience. The goal is more transparent, easier, cost-effective buying and selling, plus tech support – including submitting and accepting offers online 24/7. The system verifies potential buyers before viewings, and offers a full service for a fixed fee of R29,500 – payable only on a successful sale. Although the company has operated in beta since launch, they have averaged one to two property sales a week, saving sellers about R80,000 in commission per sale. PropertyFox also screens potential buyers, and assists sellers with marketing and post-sales administration, with owners typically conducting viewings themselves. Since its April 2016 launch the company claims it has saved South Africans about R5.5m in agent commissions. This is based on 1.5% commission charged on 60 sales valued at R96m – compared with a typical industry average of 6.5%. Likewise, HomeBid charges 1.95% commission and receives 85 exclusive mandates a month. The company anticipates 100 monthly sales by the end of 2017. “By 2022 we expect to have 15% market share of the 200,000 homes sold a year for between R300,000 and R10m,” says HomeBid GM Cavan Sheahan. Leadhome,

a hybrid between a traditional and online agency, charges a ﬂat fee of R29,995, and says it has sold “hundreds” of properties since its launch in 2015. ONLINE RENTALS TOO

Digital disruption is not exclusive to property sales though, with new entrants such as HouseME and Ekaya shaking up the rental space. In the seven months since launching in September 2016, HouseME – a rental management platform that allows tenants to bid on rental property auctions – has listed more than 1,000 independent landlords and 1,300 tenants. Tenant placement and management is 2.5% of monthly rentals, and 25% of any amount achieved over the landlord’s reserve rental price for the duration of the lease. Ekaya, a rental payment platform that is currently emerging from stealth development mode, has already facilitated the payment and collection of R1.2bn in rental fees. TECHNOLOGY FIRST?

So how are these new entrants able to lower prices, oﬀer better customer service and still run sustainable businesses? Just like disruptors in other industries, they are tapping into the power of new technology. Take the smartphone: the iPhone is only a decade old, yet many of us can’t imagine life without it. “HouseME is a technology company focused on the property industry,” says HouseME CEO Ben Shaw. “And further, we have no incentive to maintain the status quo, which gives us licence to try things that ultimately eat into the historically high proﬁts service providers have enjoyed.”

Shaun Minnie, eazi.com CEO, concurs. “We are continually testing and learning. Initially we deconstructed the process of buying and selling a home into the various elements that make up the transaction – including the role of the estate agent. We then designed optimal solutions for each part of the transaction. In most instances, this looks like a combination of the right people in the right roles, eﬃcient processes and technology.” Says Leadhome’s CEO Marcel du Toit: “We try to automate as much of the process as possible. For example, enabling bookings to view properties online, which saves both time and resources. We are able to process higher volumes of monthly sales than the average one property per agent every two months.” Te c h n o l o g y a l s o e n a b l e s b e t t e r communication between sellers, buyers and agents, and is eroding the need for branches in multiple locations, reducing overheads. Leadhome’s new self-service platform Simpli keeps sellers informed about each stage, right up to the handover to a conveyancing attorney. Harry Hattingh, Leadhome’s principal agent, says that property professionals remain crucial to the future of real estate and to the Simpli model. “By pairing the best agents with cutting-edge technology, the Simpli platform allows Leadhome agents to sell property more eﬃciently than traditional agents but with the guidance, advice and support sellers would not get from online-only agents,” says Hattingh. HomeBid emphasises savings. “Today property portals attract most of the buyers in the market and the cost is minimal in comparison to costly print adverts,” says Sheahan.

By 2022 we expect to have 15% market share of the 200,000 homes sold a year for between R300,000 and R10m Cavan Sheahan, GM, HomeBid

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PROPERTY TECH

Get your house in order

We try to automate as much of the process as possible – for example, enabling bookings to view properties online, which saves both time and resources Marcel du Toit, CEO, Leadhome

IMAGES: iSTOCK BY GETTY IMAGES

Aside from sexy customer-facing apps, traditional agencies should upgrade their internal processes. “If you don’t get it right internally first, then the external ‘glamorous’ digital channels have no solid base for success,” says Mimi Nicklin, head of marketing for the Pam Golding Property group. The company’s IT and digital marketing teams collaborate to ensure internal systems such as databases support improved seller/buyer service.

What sellers want It’s all very well launching a digital solution, but it has to meet consumer needs. Eazi.com CEO Shaun Minnie says surveys of “thousands of home owners” by eazi.com showed these insights:

CLICKS AND BRICKS

Savvy traditional players can learn from these new entrants. “Advancing technology will look to enable and enhance the traditional mode of transacting, as opposed to replacing or disrupting it. Most sellers and buyers would prefer to involve a trusted and credible third party agent to facilitate the process,” says Seeﬀ Properties’ national marketing manager Ted Fraser. But he agrees that new technologies will assist in streamlining the process. Some start-ups are open to collaborative relationships. Ekaya is equally suited to landlords as to rental agents and investors. Says Ekaya CEO Justin Melville: “Our goal has always been to service the entire rental market. The traditional view is that there is a professional agency and private landlord divide. Few entities even consider the tenant worth serving.” It’s tempting to paint a picture where the rise of technology-driven, disruptive new entrants spells the demise of traditional players. But traditional taxi services still exist despite the shakeup by Uber. Hotels still welcome guests despite AirBnB. Consumers shop in stores, even with the convenience of e-commerce. Internationally a “clicks and bricks” hybrid real estate model is emerging to oﬀer the best of both worlds, and South Africa will probably follow suit. What is for sure is that increasingly digital and savvy customers will no longer settle for the status quo.

of sellers want active assistance when selling a home

Most sellers want a local specialist to visit their home

of buyers and sellers feel commission is not justified, preferring a fixed fee

Most buyers find their homes on major portals and then contact an agent

JULY/AUGUST 2017

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AGENT DEVELOPMENT

Find more useful training and industry advice on propertyprofessional.co.za – click on Tools of the Trade in the top navbar

HOW TO

GROW YOUR NETWORK

A HEALTHY NETWORK IS ESSENTIAL AS AN AGENT BUT IT’S ALSO A LONGTERM STRATEGY THAT REQUIRES CONSTANT WORK. PRIVATE PROPERTY PROVIDES POINTERS FOR EFFECTIVE NETWORKING

1 Events Attend local events to establish relationships with community members.

Building referrals Referrals can play a vital role in expanding your reach. Client referrals are the most valuable as potential buyers or sellers are more likely to trust the recommendation of someone they know. But there are other ways to build referrals, too.

Effective methods for keeping in contact • Ask clients to complete a customer satisfaction survey. • Send them useful information such as local community and property news. • Connect with buyers and sellers on social media or professional networks. • Ask for a Facebook testimonial or review. • Send a card or gift on special occasions such as Christmas or birthdays.

Other businesses

Agree on a mutually beneficial relationship with other companies such as mortgage brokers, plumbers and conveyancers to crosspromote businesses.

Other agencies

An estate agent’s relationship with other agencies doesn’t have to be antagonistic. Agencies can partner to refer clients to one another.

Social media

Spend time engaging with your online community every day and providing them with useful information about their area. This ensures you are front of mind when someone is looking to buy or sell.

PROPERTYPROFESSIONAL.CO.ZA

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Just Property CEO Paul Stevens explains that by focusing on rentals, the business sidestepped challenges faced by other sales agencies

RIDING

THE

RENTAL WAVE GEORGINA GUEDES

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COVER STORY

ust Property recently rebranded as one business. The move was designed to reflect the company’s evolution from a specialist letting agency – Just Letting – to a business providing a complete property solution. Since 2016 its offerings include residential, commercial and industrial property for rentals, sales and investment. The home-grown company now has more than 100 franchises across South Africa and Namibia. “Just Property has built its rental property business the opposite way to most real estate companies in that we dug our teeth into the hard work of property rentals, while many other agencies were not prepared to do this,” Stevens says. With this focus, they built Just Property, the biggest rental business in South Africa. It provided a solid foundation from which to springboard into other real estate services such as sales. “Despite the competitive market, we also view it as a time for opportunity when your typical salesonly brands start to feel the pinch of the weakening economy.” Stevens predicts that the rental market will never lose momentum in South Africa because of the large influx of people from rural areas into the more populated parts of the country in search of work. At the same time, those from disadvantaged areas are moving into affluent suburbs as the middle class grows. “These factors allow for a growing rental market along with the fact that fewer people are able to raise the finance to own their own homes.” REGIONAL DIFFERENCES

“South Africa tends to paint a picture for the rental market that varies for different regional areas,” says Stevens. For instance, he says rentals have been under strain in Gauteng with large amounts of rental stock coming onto the market because developers have either not been able to sell units that have been built or because institutions have bought large portfolios of residential units to diversify from commercial or industrial portfolios. In addition, as many as 50% of prospective renters do not qualify because of affordability issues or poor credit records, which reduces 24

THE JUST PROPERTY TIMELINE

2000 Just Letting Property rental and management

2005 Just Commercial Leasing, sales and management

2010 Just Residential Property sales

2016 Just Property

the tenant pool – a key factor in the success of the rental game. “On a positive note, last year’s rental growth in Gauteng was less than 5%, while for this year, we are seeing a remarkable improvement in this figure to just less than 10%,” Stevens says. RELOCATION AND RENTALS

The Cape – particularly Cape Town – paints a different picture indeed. “There is a large movement of people relocating to this area, which naturally has a positive influence on the rental market,” says Stevens. “The market here has seen higher growth than most other

parts of South Africa, with rental growth of just more than 10% so far this year. This can be expected to sustain itself for some time to come.” He says that most other provinces are seeing slow growth in rentals under the 4% mark – below the rate of inflation – which is a concern for property investors. “As the political picture in South Africa remains uncertain – and with the recent news of further downgrades by rating agency Moody’s – there is a reservation in the market for home buyers and investors. They are waiting to see what the future holds for the confidence in our country and in property.”

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KEEP TABS ON

“We have received a draft of the proposed Property Practitioners Bill and have been asked to comment as an industry. We were given very little time to provide feedback.”

With this focus, they built Just Property, the biggest rental business in South Africa Stevens says the scope of the Bill is “far beyond” the capabilities of the industry to manage. “We are working closely with industry partners and others aﬀected by the proposed Bill to lodge the objections that are a result of poorly considered and badly constructed policies.” The Property Charter will be yet another hurdle to overcome when it is released, possibly later this year. “As with many industries, the feeling is that regulation and legislation are good things but the industry that it is going to impact on needs to be addressed prior to drafting these policies. We need to be wide awake to possible changes that challenge us. “We need to work together with government and industry partners such as REBOSA to ﬁnd constructive ways to achieve transformation goals within the landscape that we operate. I would encourage all agents to support REBOSA. The organisation is there to address and represent the needs of the industry at large.” DIGITAL DISRUPTION IS KNOCKING

“Disruption is the ﬂavour of conversation at the moment and our industry is one that is high on the list of industries that could face disruption,” says Stevens. Many of the emerging “hybrid” or “smart” agencies have not yet gained traction, but they could certainly make their mark as millennials continue to come into the property market. “I do however believe that if an agent can add exceptional value through the service that they oﬀer, they

PP JulAug_Cover_Interview_final.indd 25

will always have their place. But I also think that the fee being charged for commission on sales is going to be something that starts to decline and become more in line with fees charged in other parts of the world.” Many agents have started to utilise the social media space as an extremely eﬀective marketing medium – and it’s cost-eﬀective. “The great thing with social media is the audience reach and targeted approach through the right parameters. The latter is something that most agents still get wrong,” says Stevens. CRAFT THE MESSAGE

“Millennials engage hugely with social media but the message they receive needs to be carefully crafted. Buying property is a major milestone and they still prefer to deal with a real person, someone that they trust. The social media messages must be personal; they need to tell an agent’s life story and stand out on a personal level if a millennial is going to take the time to engage.” Stevens warns that the possible Property24 purchase of Private Property poses a realistic threat. He says that when a media house has a monopoly and can start to dictate prices, this could be dangerous. “I’m hopeful, though, that the industry will be able to prevent this deal from taking place and that as an industry we take ownership of our own portal.” However the online space is the next big challenge to manage so agents need to remain mindful of providing solutions to their clients that make their oﬀerings easier, at a fair price, with lots of value. Stevens concludes: “We are working hard internally to build resilience and optimism in our teams so that we emerge stronger in the long run.”

I do however believe that if an agent can add exceptional value through the service that they offer, they will always have their place

20/06/2017 12:42

FINANCE

GOLD RUSH? L

ocal estate agents remain optimistic of property price growth in Johannesburg despite concerns about South Africa’s recent downgrade to sub-investment grade, or junk status, by major ratings agencies. Says Ronald Ennik, founder and principal of Ennik Estates: “The Johannesburg residential property market is set for an upturn after a long period of uncertainty and flat-lining prices. Fundamentally, Johannesburg home prices at present are the most undervalued they have been in the past 20 years. There are opportunities galore to buy at discount.” He says this is because, unlike Cape Town, the Johannesburg residential property market is nowhere near topping out from a boom period – as was the case in 2007. At the same time, while the cabinet reshuffle and dismissal of Pravin Gordhan and Mcebisi Jonas as finance and deputy finance ministers respectively have caused the country to slide into junk status, Ennik says at least buyers now know what they are dealing with. “These unfortunate developments … have lifted the mantle of uncertainty that has been hanging 26

There is risk involved but now might be a good time to invest in Johannesburg

over the property market for some time,” he says. “Buyers and sellers can at least see the lie of the land – albeit a pretty daunting picture right now.” FILTERING DOWN

Chairman of Seeff Properties Samuel Seeff says the markets had already factored in some of these events. “The credit downgrades were expected to some extent, given that the threat has been with us for about 18 months and the effects have in many respects been factored into trading conditions.” While there will no doubt be financial consequences, these effects will only filter through much later, he says. “For now, it remains business as usual for the property market.” Candice Andrews, head office branch manager for Adrienne Hersch Properties, says that while the “boom market” of years gone by is a thing of the past, even in the current “slow market” there is an enormous amount of investment and development taking place in and around Johannesburg’s northern suburbs. “As with any market, high demand is directly linked to price growth, and with weakened

consumer conﬁdence, we are ﬁnding that in most cases, sellers are having to align their expectations to current market prices,” she says. “The cold reality that sellers are having to accept is that in a buyers’ market, there is no fear of loss on the side of the buyer. If sellers don’t come to the party on their price, buyers will simply go next door.” Andrews says that for those able to obtain finance, there is a considerable number of bargain buys on the market. “All in all, if you have the means, it is a good time to invest in property in Johannesburg.” DECLINING SALES?

Justine Roux, area specialist for Lew Geffen Sotheby’s International Realty, points out that house sales volumes have slowed notably in upmarket Johannesburg suburbs such as Inanda. According to Lightstone, only 10 properties with a combined value of R79.8m changed hands in Inanda in the 12 months ending 30 April, with Atholl’s 24 sales realising R146.5m. But Roux attributes the slowdown to “many more potential sales” that fell through and a lack of urgency from

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IMAGE: iSTOCK BY GETTY IMAGES

GEORGINA GUEDES

If sellers don’t come to the party on their price, buyers will simply go next door Candice Andrews, head oﬃce branch manager, Adrienne Hersch Properties

these sellers, as well as prices not dropping in the past two years. “One of the main reasons homes aren’t selling is that sellers simply won’t budge from their listing prices despite the notable decline in investor numbers that has precipitated a shift to a buyers’ market,” says Roux. “Many sellers in suburbs such as Inanda, Illovo and Atholl have high expectations and low ﬁnancial stress, which means they can often aﬀord to sit out the tight economic conditions and wait for the market to improve – however long that takes.”

able to ﬁnd excellent value across the market. The banks are also still lending, so it remains a good time to buy and sell – if you are a serious seller.” For these reasons, Ennik says buyers in Joburg who ﬁnd the home that suits their needs and lifestyle should climb aboard now, while interest rates are still relatively low. “However, they must be aware that the rates will inevitably rise in the future.” CAUTION PLEASE

In light of this, Seeff says all property buyers anywhere in South Africa should buy below their means and build in some room to absorb potential interest rate rises and cost increases. For sellers, market-related pricing will become increasingly important across the country. “In terms of the bulk of activity, the middle to lower sector of the market, predominantly in the R1.1m-R1.2m price band and bonds in the R900,000 to R1m range, seem to be least affected by the economic slow-down, with activity continuing,” Seeff says. “In contrast, the R5m-plus range is seeing a dip in activity, with buyers and investors more hesitant.” Timothy Akinnusi, executive head of home loan sales and client value management at Nedbank, says that because Gauteng is the most economically active metro in South Africa, the demand for residential property in the price range of R600,000 to R1.5m will be much stronger as the population of younger people migrate to the region for employment opportunities. “This, in turn, drives demand for new entrants into the housing market,” he says. “In the Western Cape, the demand for housing in the R4m to R8m bracket is likely to be more attractive than in Gauteng, given the demographic of holiday makers and investment property opportunities.” Ennik says the market opportunity in Johannesburg will benefit first-time buyers the most because they do not need to sell a home to buy one. “Be courageous and take the plunge because nothing ventured is nothing gained.”

IMAGE: iSTOCK BY GETTY IMAGES

CAPE VULNERABILITY

While Johannesburg certainly presents opportunities, Ennik says the same cannot be said for Cape Town. “Cape Town is in a far more vulnerable situation than Johannesburg. It has been in an opposite cycle and is now ripe to come off its boom. By contrast, there is no fat in the undervalued Johannesburg market – and there is therefore less risk and more potential.” Seeff agrees that Johannesburg offers great potential. “In terms of the Joburg property market, there is most certainly still excellent value to be had. Property prices have grown at fairly conservative rates and buyers are

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The Johannesburg residential property market is set for an upturn after a long period of uncertainty and flatlining prices Ronald Ennik, founder and principal, Ennik Estates

19/06/2017 14:35

1% of shoppers start their

property search with newspapers.*

90% start their search online. FOR SALE

TO RENT

COMMERCIAL

ADVICE

SERVICES

* According to the Private Property customer survey of February 2017

Where do you spend your marketing budget? A home for everyone www.pr i va tepro pert y.c o. z a

I N D U S T R Y U P D AT E

INDUSTRY ISSUES

YOU SHOULD KNOW ABOUT

REBOSA CEO Jan le Roux outlines some big issues that the property industry is keeping an eye on

1 PROPERTY PRACTITIONERS BILL

The importance of the new Bill cannot be overestimated as it will dictate how the property industry operates for decades to come. REBOSA has been gearing up to comment on this Bill for some time. We have now submitted detailed comments to the Minister of Human Settlements – in total 108 points of positive criticism. We will continue in this vein; we have requested a meeting with the Minister and for the right to address the Parliamentary Portfolio Committee on Human Settlements on this issue. REBOSA also intends interacting with ANC and opposition parliamentarians as much as possible. The existing Act has been in operation since 1976. We have published the Bill and our comments on our website and started a Q&A column. We invite all agents to submit questions. REBOSA has hosted a number of countrywide road shows to communicate the challenges of the Bill to members of the industry to ensure that everyone is informed. As an organisation, we are disappointed with the Bill, considering that the process of revamping the legislation started in 2008. Nine years in the making, we hoped that a more dynamic version of the current Bill would have been put on the table.

2 REALIGNMENT OF REAL ESTATE QUALIFICATIONS

The following real estate qualifications are currently registered on the National Qualifications Framework (NQF). They are a core part of the ongoing education, training and professionalisation process of the real estate sector. • National FET Certificate in Real Estate – SAQA ID 59097 | NQF level 4 | Credits 150 • National Certificate in Real Estate – SAQA ID 20188 | NQF level 5 | Credits 135 Both fall under the occupational qualifications sub-framework. The Quality Council for Trades and Occupations (QCTO) Delegated QA Functionary is the Services Sector Education and Training Authority (SSETA). The registration end date for both qualifications is June 30 2018. The last date for enrolment is June 30 2019. The South African Qualifications Authority (SAQA) says these qualifications come from previous qualification development models that are still active and therefore need to be taken through a “conversion process”. Following a meeting to discuss this realignment of qualifications with SSETA and QCTO, REBOSA is now forming a steering committee comprising industry leaders and education professionals to offer input on alternative or new occupational qualifications to replace the current NQF 4 and 5 legacy qualifications within the real estate sector. JULY/AUGUST 2017

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I N D U S T R Y U P D AT E

3 PROPERTY PORTALS

4 CONSUMER AWARENESS CAMPAIGN

In light of all the disintermediation threats from various start-up companies and the unfortunate situation of so many consumers dealing with unregistered (sometimes unscrupulous) agents, REBOSA has launched a consumer awareness campaign. It extolls the beneﬁts and necessity of dealing with registered estate agents. These advertisements will be carried in various consumer property publications including Sunday Times Neighbourhood, Neighbourhood Listings and Business Day HomeFront. As the Property Practitioners Bill currently reads, consumers will not be protected from the theft of trust funds should they deal with unregistered agents. As much as REBOSA proposes that this be changed so consumers can be protected, the importance of dealing with registered agents only should be widely communicated.

For more industry updates and news visit rebosa.co.za. Sign up to the Property Professional newsletter, out every second Tuesday, at propertyprofessional.co.za.

IMAGES: iSTOCK BY GETTY IMAGES, SUPPLIED

Zillow is a US media company that says it “sell ads, not houses”. But the company has just waded into the complicated process of selling a home by launching a new product called Instant Offers. The initiative is billed as a way for home owners to avoid traditional hassles and sell quickly. However Zillow might downplay this move as a “test”. Whatever US law says about its role, the company is sitting in the middle of the transaction and acting, in effect, as a broker. (Find out how Instant Offers works by visiting propertyprofessional.co.za.) Zillow found some agents willing to support them in the test and the results are being called “positive”. Inman.com reports: “Instant Offers resonates with prospective sellers and it could put agents on their trail.” But US estate agents immediately exerted huge pressure on the National Association of Realtors (NAR) to take a stance against the initiative. Zillow chief business officer Greg Schwartz went to great lengths to explain that Zillow is in support of estate agents, as 70% of their revenue is derived from agents. But since the test results are positive it would be fair to assume that Zillow is unlikely to discard Instant Offers. If a portal as big as Zillow can succeed in replacing estate agents and thereby acquire a share of commissions, they are likely to do so. In South Africa it can be argued that leading portals Property24 and Private Property are even more dominant than Zillow in the US. They should be interested in the results of the test, no doubt. Property portals are business ventures that have estate agents as their clients, but the temptation to earn at least part of the commissions must be there. Estate agents agree that 80-90% of their leads (buyers) are derived from property portals. Agents’ recent fears of disintermediation by portals reached new heights with the current attempt by Property24 to acquire Private Property. Reportedly this is subject to legal issues and will eventually have to be approved by the Competition Commission. Agents’ fears in this regard are well founded. South African estate agents managed to gain control of their own print advertising, which one may argue saved the industry over the past decade or so. Unfortunately an opportunity to do the same where property portals are concerned did not come to pass. But it’s not too late to take steps to establish an industry-owned portal. It would be irresponsible of estate agents to allow unrelated business interests to end up in a dominant position and thereby dictate terms to the property industry.

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I N T E R N AT I O N A L

outh Africans seeking international buy-to-let properties may be tempted by promising vacancies for housing in Australia’s two largest cities, Sydney and Melbourne, but opportunities are tempered by exponentially rising prices. Australian Bureau of Statistics (ABS) data recorded for Q4 2016 has triggered speculation that the market may heat up further, as well as fears for ﬁrst-time property owners and potential investors wanting a step on the ladder. Released in March, the ABS figures showed Sydney and Melbourne property prices increased 5.2% and 5.3% respectively for the three months to December. Brisbane real estate prices increased by 2.2% and Perth only 0.3%, while across Australia’s six capital cities, the 4.1% growth was the strongest quarter since June 2015. RIPPLE EFFECT

INVESTING IN

AUSTRALIA NICOLA JENVEY

Does demand for property, in Sydney and Melbourne in particular, mean that home owners and investors are experiencing a pricing bubble? And is that likely to change in 2017?

The Knight Frank Australian Residential Review May 2017 report, compiled by Michelle Ciesielski and based on the ABS data, indicates that Sydney experienced the strongest growth in median house prices at 54.6% over five years to December 2016. The city ranked highest among Australia’s capital cities at A$907,200. This has caused a ripple effect into satellite cities such as Gosford, Wollongong and Newcastle. Ciesielski says the value of housing finance commitments in New South Wales in the three months to February 2017 decreased 3.6% on the previous year to A$21.7 billion, while Sydney building approvals in Q1 2017 increased to 3,995 houses and 8,405 apartments. House sale volumes decreased 4.2% and apartments 0.9%. Apartment rentals increased 1.8% over the year to achieve a A$565 weekly median, while houses remained constant at A$645. Vacancies for the city were only 1.7%. Ciesielski says the value of housing finance commitments in Victoria in the three months to February dropped 2% on the previous year to A$17.2bn. Melbourne experienced a 1.8% decrease in house building approvals in the three months ending March, but a 4.3% increase for apartments over the same period in 2016. House and apartment sales volumes increased

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1.3% and 2% respectively, while March house values increased 2.2% to a median of A$825,500. Apartment values increased by 1.2% to a record median of A$521,000. Weekly apartment rentals increased 3.7% to A$420 and houses 2.2% to A$455. March vacancies were 2.3%. Gross rental yields across greater Melbourne decreased to 2.89% for houses and to 4.24% for apartments over the year. RISING PRICES

Shane Oliver, chief economist of global investment management company AMP Capital, says the ABS results are “a clear sign the threats in Sydney and Melbourne are steadily rising”. He expects the “ridiculous prices” to slow during 2017 – and if that does not happen, he believes regulators will step in to cool activities. Cameron Kusher, CareLogic’s head of research for Australia, told ABC News Online that home prices in Sydney and Australia are “seeing more strength.” This upward trend, he says, is based on owners upgrading their homes as well as local and overseas investment. “It’s pretty clear it’s not coming from ﬁrst-time owners at the moment. We’ve pretty much got record low levels of ﬁrst-time buyer activity,” he says. According to Kusher, Australian Prudential Regulation Authority and the Reserve Bank of Australia will need to step in to slow the growth rate in Sydney and Melbourne for investors and foreign buyers. Says Kusher: “Over the year you will start to see that rate of growth slow, but it’s going to take a lot more intervention from a regulatory perspective to try and slow down this speeding market.”

IMAGES: SUPPLIED

AND THE RISK?

According to Oliver, authorities, including the Reserve Bank of Australia, are concerned about overheating house prices after Australian Securities and Investment Commission chairman Greg Medcraft described the Melbourne and Sydney housing markets as “a bubble” and Australian Prudential Regulation Authority chairman Wayne Byres warned of “a heightened risk”. Ratings agency Moody’s concurs, having found borrowers are increasingly falling behind on repayments. As vice president and senior analyst Alena Chen told The Guardian: “Weaker economic conditions in states reliant on the

THE “TYPICAL AUSTRALIAN”

mining industry, rising underemployment, weak wages growth and less favourable housing market conditions will drive delinquencies higher.” RETAIL AND OFFICES

is a 38-year-old woman

lives in a three-bedroom mortgaged house

has two vehicles

both her parents were born in Australia

has completed her Year 12 (South Africa’s matriculation equivalent)

is married with two children

speaks English at home

Source: Knight Frank Australian Residential Review May 2017 report

Earnings in the Australian property market are in line with expectations Adriaan Pask, PSG Wealth chief investment oﬃcer

PSG Wealth chief investment officer Adriaan Pask says earnings in the Australian property market are in line with expectations. The company’s Investment Research and Strategy Report Autumn 2017 indicates returns for that market – and in this case PSG is primarily referring to property stocks and commercial property over housing bricks and mortar – are driven by a steady demand for and low supply of office space in Sydney. Australian property monitor firm Domain Group’s chief economist Andrew Wilson believes December 2015 figures reflected falling Sydney property prices for the first time in three years, and soft growth in Melbourne. Au s t ra l i a n re a l e s t a te co m p a ny PRDnationwide’s national research manager Diaswati Mardiasmo says that while Sydney, Melbourne and Brisbane have experienced strong growth in the past year, there is also an “air of cautiousness” with buyers and sellers concerned about how far prices can rise before the market makes a correction. Mardiasmo believes Sydney and Melbourne will experience growth, but not at the speed sustained for the past two years. Meanwhile, UK-based global advisory BIS Oxford Economics MD Robert Mellor told a building industry prospects conference in Sydney this year that he expects the city’s house prices to drop about 5% over the next two years. South African companies are equally cautious. IP Global director for Africa George Radford says the property investment firm continues to have a high degree of confidence in the overall direction of Australia’s eastern cities, given the data reflecting rising prices. However, increases in foreign buyer s t a m p d u t y i n N e w S o u t h Wa l e s , V i c to r i a a n d Q u e e n s l a n d , a l o n gs i d e significantly reduced mortgage availability f o r f o re i g n b o r rowe rs , s u g ge s t s t h a t Australia is “a less attractive investment destination” than other tier one property markets globally.

JULY/AUGUST 2017

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If your clients can’t justify paying a premium to live in a top suburb, which Gauteng alternatives offer solid homes with growth potential?

RARE FIND SUNGULA NKABINDE

JOHANNESBURG’S POPULAR SUBURBS

Says Luthuli: “If you’re after an apartment in Ferndale, you’re looking at a range of about R500,000 for a one-bedroom apartment. In Bryanston, the cheapest 34

PROPERTYPROFESSIONAL.CO.ZA

you would get for the same size, which is about 50m2, would be about R700,000, if not more. Douglasdale would be cheaper but still more expensive at about R580,000.” The same is true for vacant land for sale, she says: “Right now, the cheapest plot costs R1.5m for a 900m2 piece of land while in Ferndale, the cheapest vacant plot is R400,000 for an 800m2 piece.” Brackendowns, followed by Bryanston, are the most-moved-into suburbs in Johannesburg since the beginning of 2016, according to property information provider Lightstone. This is for homes valued between R1m and R2m. The popularity of Brackendowns is consistent with the rise of the property market in Johannesburg South. Deseree Hauser, principal of Pam Golding Properties for Johannesburg South, says it is because there are many communities moving out of townships to what they feel are more affluent areas. With about 40% of the population of greater Johannesburg living in Soweto, this translates into a huge number of people looking for housing. DEMAND FOR AMENITIES

Says Hauser: “A lot of people in Soweto are moving into Naturena in Mondeor. Those in Lenasia are also moving to the south. There is a lot of development in these areas, where there are decent houses going for about R800,000. It’s being driven primarily by demand for schools as well a big rental market this side of Johannesburg.” Gerhard Kotzé, MD of estate agency group RealNet, says Westdene, Edenvale and Rivonia are the best-value areas in Johannesburg for those looking for alternatives to more well-known or affluent areas. He says the average house price in Westdene, for example, is just more than R1.2m compared with R1.55m in neighbouring Melville, which is better known and more sought after. “What is more, there are still some excellent finds in Westdene for under R1m for buyers keen on older homes that are worth renovating,” says Kotzé. “And living in Westdene gives you virtually the same access to all the benefits of living in Melville – proximity to the University of Johannesburg and Wits campuses, the good schools in the area, public transport, workplaces in Auckland Park, Parktown, Braamfontein and the city, and excellent shopping facilities in Melville and at Cresta.”

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IMAGE: LEAH DE JAGER

ith the South African economy as sluggish as ever, finding an affordable residential property is becoming more of a challenge. Interest rates remain high and banks are sticking to their strict lending criteria. It is particularly tough for firsttime buyers looking to invest in a property in a reputable area with potential for high growth in value. But existing home owners whose families are growing are also finding it challenging to find bigger spaces without overextending themselves financially. There are, however, good value suburbs in Johannesburg and Pretoria that offer affordable alternatives to the more sought-after neighbourhoods. Trish Luthuli, deputy branch manager for Pam Golding Properties Northcliff, says Ferndale stands out as one of the more affordable locations, which is appealing because it is equidistant to Sandton and Fourways. It is a cheaper alternative to Bryanston and Douglasdale for buyers looking to be close to these more affluent areas. Ferndale is prime for first-time property owners, with 55% of buyers between the ages of 18 and 35. It is also close to Randburg, a central transport node in Johannesburg, allowing for easier access to public transport.

NEWSWORTHY

PRETORIA (2016-17)

SUBURBS MOST MOVED FROM

Faerie Glen Garsfontein Moreleta Park Rooihuiskraal Waverley Wonderboom

PRETORIA

JOHANNESBURG

(2016-17)

SUBURBS MOST MOVED TO

SUBURBS MOST MOVED FROM

Brackendowns Bryanston Farrarmere Helderkruin Randhart Rynfield Wilro Park

Lonehill Northmead North Riding Sunninghill Sunward Park Weltevreden Park

Menlo Park has been a popular choice for many buyers because it is welllocated with regard to schools and the university campus, and is part of the sought-after ‘Old East’ of Pretoria Gerhard Kotzé, MD, RealNet

JOHANNESBURG

to schools and the university campus, and is (2016-17) part of the sought-after ‘Old East’ of Pretoria.” Similarly, Edenvale is a good choice SUBURBS MOST However, the average price in Menlo Park for those who would like to live in MOVED TO is about R2.65m compared with R1.65m in Bedfordview but cannot afford it. He Garsfontein, the suburb just on the other says the average price in Edenvale is side of Menlyn Maine, a vibrant new city just less than R1.7m at the moment, centre burgeoning with new developments compared with almost R3.5m in Bedfordview. such as the five-star hotel and casino being built Edenvale is also close to the excellent by Sun International. schools in Bedfordview, as well as OR Tambo International Airport, Eastgate Shopping Centre and the freeway system linking all corners of greater Johannesburg. SUSTAINABLE DEVELOPMENT Says Kotzé: “For those who are keen on apartment living close Menlyn Maine has been touted as Africa’s first green city. The mega to the financial heart of the city, Rivonia is a much more affordable development will include commercial and retail space, a gym, flats, option than Sandhurst, the suburb closest to the Sandton business an entertainment complex and scenic parklands. Living in Garsfontein centre. The average apartment price in Rivonia is about R1.25m, gives residents access to all this, as well as close proximity to excellent while that in Sandhurst is currently around R2m. Rivonia is also on schools. In general, it has more modern homes than Menlo Park. a Gautrain bus route and there has been major new development in This is supported by data from Lightstone, which show Faerie recent years, not only of new apartment blocks but of shopping and Glen and Moreleta Park, alongside Garsfontein, as the most-movedentertainment facilities right on the doorstep of new residents.” into surburbs in 2016 and 2017 for homes in the R1m to R2m range. “[Pretoria East] has always been a nice area. But with all the new developments, it’s easier to sell and the rental market is picking up SPOTLIGHT ON PRETORIA quite well,” says RE/MAX estate agent Burnedette Durr. “These In Pretoria, Menlyn is a major new development node. Menlyn Park areas are popular because they are close to all sorts of amenities, Shopping Centre has undergone a multibillion-rand redevelopment whether schools, hospitals or small shopping complexes.” and work on Menlyn Maine precinct is underway. This includes a new Kotzé says buyers looking for character homes with wooden casino and hotel, as well as a new retail centre and several new highfloors, pressed-steel ceilings and stained-glass windows would do rise office blocks. well to focus on Rietondale, which is about the same distance from Says Kotzé: “There is thus rapidly rising demand for all sorts of the Pretoria city centre as the better-known Brooklyn, but a lot accommodation in the surrounding suburbs. Menlo Park has been more affordable. a popular choice for many buyers because it is well-located with regard ALTERNATIVE OPTIONS

IMAGE: LEAH DE JAGER

Amberfield Clubview Die Wilgers Equestria Pierre van Ryneveld Rietfontein

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SUBDIVISION: THINGS YOU MAY NOT KNOW BUT NEED TO KNOW Owners often consider subdivision in order to benefit financially from selling off these subdivided portions of their land. Subdivision refers to the process to subdivide an existing piece of land into two or more portions. There are quite a few “must do” steps in the process. Let us explain: 1. You need to instruct a land surveyor to draw a diagram of the subdivided portion. 2. Depending on the complexity of the subdivision, the services of an engineering firm may also be required to perform a site inspection and provide a services report. 3. The land surveyor diagram is then sent to the Surveyor General’s office for approval. 4. Before the subdivision can be formally entered into the Deeds Office’s records, it is crucial to obtain: (i) municipal consent if the property is situated in the boundaries of a municipality. Approval will only be granted if the relevant provincial and local authority laws and bylaws have been complied with, including zoning provisions. Therefore the location of the land is an important consideration as well as the minimum size of a subdivided portion, the number of portions, availability of services, access to roads and the like. It may involve an application for re-zoning if the intended new use of the property is not aligned with current zoning. A town planner or architect can assist further in this process. Your conveyancer will also play a

crucial role and will, in addition, attend to notifications to neighbours and the like, as may be required. (ii) consent of the Minister of Agriculture and Land Affairs, if it is agricultural land, must be obtained. 5.Once the consents are in place and the diagram has been approved by the Surveyor General, the conveyancer will lodge an application in the deeds office for the “registration of the subdivision”. This will ensure that the formal deeds office records pertaining to that property are updated to reflect that the relevant land no longer exists as a single piece of immovable property, but as separate, smaller parts with different erf numbers and descriptions. 6. If the property is bonded, the holder of the mortgage bond must be approached for consent to the subdivision. This consent must be lodged in the deeds office when the application for the registration of the subdivision is made. Contact the property law experts for assistance on www.stbb.co.za.

WHEN IT COMES TO HOME OWNERSHIP, LET OUR FAMILY LOOK OUT FOR YOURS

MORE THAN JUST THE PAPER WORK

LIFE HACKS MARINA CONSTAS

Keeping pets in a sectional title

id you know that keeping animals, reptiles and birds is the first conduct rule in the Sectional Title Schemes Management Act 8 of 2011, which came into effect in October 2016? My reasoning is that this is justified by the number of pet-related disputes in the industry and the amount of time, energy and legal fees that owners and body corporates are prepared to spend fighting cases involving either keeping or removing a pet.

IMAGE: SUPPLIED

IS THAT DOG ALLOWED?

If your clients live in a sectional title scheme, they will have to abide by certain rules along with those set out in the Act mentioned above. If their sectional title scheme falls under the new Annexure 2 Model Conduct Rules, then owners or occupiers must have trustees’ written permission to keep a pet. Trustees are not allowed to withhold consent unreasonably, which means they need to consider the best interests of the scheme compared to the interests of the prospective pet owner. Should a quiet bulldog be removed from his 11-year-old companion, for example, if the child’s parents provided a psychiatrist’s report stating that the dog helped the child deal with anxiety? Or consider the case of an elderly Great Dane, whose owners assured the trustees that their pet hardly ever moved

during the day and had forgotten how to bark. These are the type of issues with which trustees must grapple. If trustees decide to allow a pet into the scheme, they can impose conditions such as walking dogs on a leash or enforcing use of a poop scoop. The trustees can withdraw their permission should any condition be breached. Trustees’ consent is considered a given should any owner require a guide, hearing or assistance dog. Interestingly, there has been an increase in diabetic alert dogs, pets trained to warn their owners of low or high blood sugar levels before they become dangerous.

The policy on whether or not property owners can keep their dog or cat in a sectional title scheme is an emotive one. What are the rules?

The trustees can withdraw their permission should any condition be breached

WITHIN THE BOUNDARIES

Once somebody has permission to keep a pet, they must understand their reciprocal obligation. The Act stipulates that pets should not cause any inconvenience to other owners. If an owner breaches the rules and the Act by either keeping a pet without permission or allowing their pet to be a nuisance to others, the body corporate can obtain a court interdict, enter a private arbitration or refer the dispute to the Community Schemes Ombud Service. If owners want a pet-free complex, it is perfectly possible to draft a no-pets clause, provided three-quarters of those present at a quorum vote for the rule amendment.

Marina Constas is a specialist sectional title attorney and a director at BBM Attorneys. She co-authored the book Demystifying Sectional Title, a guide to living in, buying or leasing property in a sectional title complex.

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TO P T I P S

GRANT GAVIN

things agents can learn about branding

1 GARNER SUPPORT

FROM BIG BRANDS

Eklund values the training, infrastructure and support that assisted him in building his business. He recently launched his own Eklund Property brand in Europe, but then pulled back to focus on sales and marketing. So here is a related point: always concentrate on your strengths.

2 MANAGE TIME EFFECTIVELY

Working from 5am to 10pm will take its toll. Prioritise your income-producing activities. Include personal time such as ﬁtness, family and rest in your schedule. Eklund rarely takes business lunches, as he values this time alone to gather his thoughts and replenish his energy.

3 BUILD YOUR BRAND

Put yourself out there and invest in your personal brand to diﬀerentiate yourself from competitors. Eklund is not on TV by accident. He knew he needed to elevate his personal brand and invested $10,000 in creating his own pilot reality TV show, which he sent to various producers.

Don’t aspire to be something you are not. Brand yourself

people, establish your personal brand and diﬀerentiate yourself. Eklund uses social media eﬀectively by engaging with his followers and attracting developers and sellers who want their properties exposed to his audience.

4 ATTRACT THE RIGHT TEAM

Nobody can achieve success without great support. A top personal assistant is a massive asset in sales. Nobody works harder than Eklund’s PA, Jordan Shea. Shea is a top agent in his own right and knows everything about Eklund’s business. This is important to ensure a team runs smoothly.

5 OWN SOCIAL

MEDIA CHANNELS

Build a following on social media to provide a platform from which to inﬂuence

Grant Gavin is a property entrepreneur and public speaker from Durban, with business interests in real estate (RE/MAX Panache) and property investment. In 2015 Grant founded the Durban Entrepreneurs Club, where he speaks on entrepreneurship and leadership.

IMAGE: SUPPLIED

f you think the competition is ﬁerce in South Africa, Swedish-born New York realtor Fredrik Eklund competes in a city with more than 27,000 agents. Then there’s the pressure he puts on himself: every year, he aims to double his turnover, despite being worth more than $5.62m already. He believes that wherever you are based as a realtor, creating your own brand in that market is crucial. “Don’t aspire to be something you are not. Brand yourself,” is what he says. I believe his success is due to outstanding branding and passion. Arguably the most famous real estate agent in NYC, Eklund is also host of reality show Million Dollar Listing New York, author of The Sell: The Secrets of Selling Anything to Anyone, MD at Prudential Douglas Elliman and the founder of high-end residential real estate brokerage Eklund Stockholm New York. Here are ﬁve lessons agents can learn from this realtor:

New York realtor Fredrik Ekland has closed more than $5.62bn in real estate since arriving from Sweden in 2003. Grant Gavin picked up these tips from him

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2017/06/21 11:28 AM

M O T I VA T I O N JO-ANNE STRYDOM

he real estate industry in South Africa is slowly but surely conforming to international standards. Our academic qualifications are now on par with those in countries such as New Zealand and Australia, according to the South African Qualification Authority. The new Property Practitioners Bill will, by 2018, replace the outdated Estate Agents Affairs Act of 1976. A move towards professionalism is imminent. Regulatory body the EAAB and the Financial Intelligence Centre will also review their expectations of property practitioners and estate agencies more frequently.

HOW CAN YOU BECOME A TOP AGENT?

I often get enquiries from agents and principals asking about the highest real estate qualiﬁcation. My answer: comply with what is expected currently. Keep a logbook and study the FETC Real Estate NQF 4, PDE 4 or NC Real Estate NQF 5, and PDE 5. Also comply with the Continuous Professional Development (CPD), register with PrivySeal (via eaab.org.za) and keep attending training sessions. Real estate is all about people, their needs and emotions, and understanding why they are moving, selling or renting. No app, drone or qualiﬁcation can replace human interaction.

More than ever, skill and expertise should be a given for any serious property practitioner

STAY ON TRACK WITH THESE POINTERS

• The EAAB website is user-friendly and updated regularly, so check it often. You can create and access your own portal to send or upload information. • Understand the industry, not just your area. Read as much as possible, including EAAB circulars and property magazines. • Capture your non-verifiable points according to your Professional Development Plan, which count towards your CPD cycle. • Understand how the economy/financial climate affects transactions and banks’ lending criteria. • Take responsibility for your career. Don’t wait for your principal or franchise group to generate leads. • Learn the value of self-motivation. • Focus on your personal goals. Adjust these if necessary and don’t become despondent in difficult times. • Real estate goes through seven- to 10-year cycles but people need a roof over their heads – there will always be opportunities.

THE IMPORTANCE OF PROFESSIONALISM

As a trainer, I often ﬁnd agents acting unprofessionally during sessions – they book or arrive late, don’t show up or cancel without

letting anybody know. Some use their phones during sessions. How can an agent deal with our competitive industry if this is normal behaviour? Treat clients as you would like to be treated, take responsibility and show respect. Real estate is a professional career where an agent earns a professional fee – clients will certainly expect you to be professional. Most of all, have fun. Real estate is an amazing, unpredictable industry. Each transaction is diﬀerent. Be the best you can with every deal, work hard and you will reap the beneﬁts.

Real estate is all about people, their needs and emotions, and understanding why they are moving, selling or renting Jo-Anne Strydom has 22 years of real estate experience, initially as a sales agent before moving into training. She studied Real Estate Advanced Practices in Miami and is an accredited real estate assessor and moderator in South Africa.

IMAGE: SUPPLIED

How to be more professional

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