Es­tate agents not wealthy – study

Weekend Argus (Saturday Edition) - - PROPERTY -

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.

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