Estate agents not wealthy – study
ESTATE agents can’t buy much property themselves, a recent survey shows.
Even some hard-working and very experienced South African estate agents cannot themselves afford to buy the homes they market.
That’s the finding of a new survey of the South African property industry, which shows that although the average price of the properties sold by estate agents in the past year is just over R1 million, more than half (54 percent) of the agents polled earn R13 000 a month or less – which means that at most they could buy a home costing around R400 000.
Another 28 percent of agents earn between R13 000 and R26 000 a month, which would only qualify them to buy a home priced at around R800 000 at most, even at the current low home loan interest rates, and would certainly preclude them in most cases from investing in second or third properties.
“Indeed,” says Dr Willie Marais, national president of the Institute of Estate Agents (IEASA), “not even one agent in five is earning the kind of income that would enable them to buy a home costing R1m or more – despite the fact that the typical agent works full-time (an average of 42.5 hours a week) and that 90 per- cent have received specialised real estate training.
“What is more, the situation was just the same five years ago, at the height of the property boom, when a similar survey showed that only 20 percent of agents then earned more than R20 000 a month. So it is
‘It is really time to put to bed the image of the high-flying estate agent earning millions of rands a year’
really time to put to bed the image of the high-flying estate agent earning millions of rands a year for doing very little.
“The huge majority of agents in fact work long and irregular hours for uncertain and irregular rewards.”
This is no doubt an important reason why the industry is still failing to attract very many young people, he says, with the survey showing that only 8 percent of agents currently operating are under 35 – compared with 8 percent who were under 30 five years ago.
“On the other hand, there is positive news in the survey for consumers, with the results showing that 67 percent of the agents currently operating have at least five years’ experience – and that 37 percent have actually been in the industry for more than 10 years.
“In other words, the dramatic drop in agent numbers over the past two years appears thankfully to have been due mostly to the exit of those people who jumped on the real estate bandwagon when the property market was booming.”
The just-released 2009 survey of the industry, conducted by an independent researcher with the backing of IEASA and Property24 as well as the Estate Agency Affairs Board, is the second such poll ever conducted in South Africa, the first having been done in 2004.
Distributed to 42 000 agents registered with the EAAB, it probed a wide range of characteristics of agents and agencies and although participation was entirely voluntary, it drew a strong response.