Private property Estate agents — the new gatekeepers
But property industry optimistic over Cyril Ramaphosa’s victory
When property doyenne Pam Golding began her business in the 1970s she had no capital and found herself in an industry largely dominated by men.
The phenomenal rise of her real estate business, which has expanded into an international operation, has been hailed as an inspirational story of a woman succeeding against the odds.
But Xoliswa Tini, the founder of Xoliswa Tini Properties in East London, has found it hard to break into the industry — partly because she is not only a woman, but a black one. When she started out in 2003, she found the real estate industry still dominated by men — mainly white men. It had little room for new players, especially black entrepreneurs.
Tini said generally it was difficult for black people to get into the industry without financial support.
Difficult to break in
“When I started, none of the existing franchisees would ever take me, because I did not have experience,” she told Business Times.
“The real estate market is closed and you are sat down in the corner. The more established agencies don’t give you the depth to grow in the industry.”
Tini was inspired by Golding, who died last month aged 90. She wants to be a role model for black women and to be “their own Pam Golding”.
She said: “I wondered in 1999 why there weren’t any black estate agency owners; we were in the new South Africa, but there was not even one black owner.
“I thought to myself, Pam Golding is a woman and she did it in a male-dominated industry. So I decided to be the Pam Golding for our black people.”
Tini has grand plans for the future, including franchises later this year in Port Elizabeth, Pretoria and Johannesburg.
Views differ on why the industry has been slow to transform racially.
Herschel Jawitz, CEO of Jawitz Properties, said the slow pace of change was due to volatile market cycles that made life difficult for new entrants.
“I think that this challenge is amplified because the industry is dominated by small family businesses and not the large brands. These businesses typically don’t have the resources to implement a transformation plan,” said Jawitz.
Where’s next meal coming from?
Ted Frazer, the national marketing manager at Seeff Properties, acknowledged that transformation had been relatively slow but said this was due to the industry’s unpredictable nature as an income stream rather than to bad intent.
“Because it is a performance- and commission-based profession, monthly income is not guaranteed. For many people this is a challenge, especially when the property market is not performing well, as has been the case over the past few years,” Frazer said.
He said many agents had left the profession after the 2007-08 recession to look for more stable employment.
Another issue in the industry is the prevalence of dodgy operators.
Nikita Sigaba, acting CEO of the Estate Agency Affairs Board, said that in the past financial year the board had prosecuted more than 120 estate agents for contraventions.
“Of this number more than half were prosecuted for illegal trading, although this number is not a complete reflection of the problem of illegal practitioners we believe are out there,” Sigaba said.
According to the EAAB’s 2016-17 annual report, the number of registered estate agents in South Africa in March last year was 41 241, up from 38 503 the previous year. Whites outnumbered people of other race groups by more than four to one.
The board’s latest report said there had been “acts of racism, discrimination and intolerance committed by estate agents which were, unfortunately, prevalent . . . Such reprehensible acts . . . bring the estate agency profession as a whole into disrepute.”
Working to end bias
Jawitz said: “I think the industry is moving forward in trying to ensure that racial bias is removed both within the industry and in the market.
“These initiatives extend beyond racial bias to include religious, gender, culture or any other bias.”
After the economic slowdown of the past year, industry experts hope that Jacob Zuma’s replacement by President Cyril Ramaphosa will breathe new life into the market.
Jan le Roux, CEO of Real Estate Business Owners of South Africa, said despite the challenge of transformation, which was further slowed by stricter regulations and new education and registration requirements, the outlook was positive.
Poised for growth
“The property industry is poised for growth, but we may face a period of relative uncertainty until the election. The projected growth figures look better and the interest rate may well come down, all of which is good,” Le Roux said.
“The whole debate around expropriation of land without compensation is, however, creating uncertainty and I don’t believe the uncertainty will be resolved any time soon.
“Until then buyers’ confidence in the property market may remain inhibited. Sporadic land-grab initiatives are not helping,” he said.
So I decided to be the Pam Golding for our black people
These initiatives extend beyond racial bias Herschel Jawitz Jawitz Properties CEO
Land reform warning
Neil Gopal, CEO of the South African Property Owners Association, which represents the commercial property sector, also expressed optimism but said caution was needed in dealing with land reform.
“Investors require certainty and this matter should not be used as a political football to appease voters ahead of the 2019 elections,” he said.
Parcels of land that were being prepared for development, which would create job opportunities, were being “invaded”, he said. “We are of the view that these so-called invasions are orchestrated . . . to the detriment of the people who deserve better.”
After a prolonged lean period, the real estate industry sees hope for the market in the election of Cyril Ramaphosa, but there are concerns over the impact of land expropriation.