JULY/AUGUST 2016
THE SOUTH AFRICAN PROPERTY INDUSTRY MAGAZINE
WHY YOU NEED THE RIGHT MARKETING MIX IN T E R V IEW
LEW GEFFEN
ON FRANCHISING AND HOW BUSINESSES ARE BUILT ON CLIENTS AND AGENTS
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ECONOMISTS AND AGENTS WEIGH IN ON BUY TO LET
ARE ONLINE REAL ESTATE REBELS SHAKING UP THE INDUSTRY? 2016/07/01 10:06 AM
GOL
LUB 2016
GoldClub status is awarded to those agents who have achieved service excellence and exceptional property sales, whilst exhibiting the highest level of professionalism. Pam Golding Properties' top performers gathered beneath the starry African bushveld skies for a memorable gala banquet at The Palace in Sun City on 25 May, to recognise each other's achievements and celebrate the legacy that began 40 years ago.
National finalists in alphabetical order: Angie Bloom, Annette Hepburn, Arie Kade, Barbara Rogers, Brenda Courtney, Brenda Gilbert, Byron Thomas, Carol Truter, Christiaan Steytler, Clarence Collins, Deanne Kriel, Doug Gurr, Erika Odendaal, Farrel Kelman, James Warne, Jeanine Allen, Kayte Denham, Kimberly Dods, Lambert Bezuidenhout, Leanne Jamieson, Linda Nunes, Lorraine Campbell, Louise Yeats, Lynette Kannemeyer, Mandy Mitoulis, Marcelle Conradie, Mariel Burger, Melanie Truss, Minette Munitz, Mridula Sembhoo, Myrna Duveen, Nili Dodhia, Paul Levy, Pearl Sparks, Robin Midgley, Sansi Dietz, Sascha Bausch, Sharon van Rooyen, Shirley Finnemore, Sue Ralph, Tiaan Schutte.
I am guidance, wisdom and understanding. I am hearifelt reassurance. I am your corifzdence earned. I am at your service. I am your GoldClub agent.
NATIONAL AGENT OF THE YEAR WINNER Barbara Rogers, Camps Bay
NATIONAL BRANCH MANAGER OF THE YEAR & BRANCH OF THE YEAR Basil Moraitis, Atlantic Seaboard
NATIONAL BRANCH OF THE YEAR- MEDIUM Stellenbosch, Louise Varga
NATIONAL BRANCH OF THE YEAR- SMALL
NATIONAL AGENTS OF THE YEARDEVELOPMENTS
NATIONAL FRANCHISE OFFICE OF THE YEAR LARGE
Leanne Jamieson & Lambert Bezuidenhout, Steyn City
Blouberg, Emmie Campbell
NATIONAL LETTING AGENT OF THE YEAR & NATIONAL REFERRAL AGENT OF THE YEAR LETTING - VALUE Sharon van Rooyen, Southern Suburbs Letting
NATIONAL REFERRAL AGENTS OF THE YEAR RESIDENTIAL - UNITS
Wellington, Surina Du Toit
NATIONAL AGENTS OF THE YEAR BRANCH CATEGORY B
Doug Gurr & Jeanine Allen, Franschhoek / Winelands
INTERNATIONAL
PROPERTY
AWARDS
2014 -2015
***** Best Real Estate
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Agency Africa Best Website Africa
Heather Turner & V ickie Francis, Newlands
opp AWARDS
FOR EXCELLENCE Best Estate Agency Africa pamgolding.co.za
02
INDUSTRY NEWS
31
W
e’ve weathered a few economic and political bumps in the road of late, and some of us may be feeling a little bruised. But the majority are standing tall: South Africans have that resilience and entrepreneurial ability to see opportunities in less-than-perfect conditions. And property seems to be standing its ground – certainly in the seemingly recession-proof Western Cape market. But currency fluctuations can always create a different set of potential buyers. One crowd starting an industry conversation is online start-ups such as Property Fox and Quoin Online. Are they cutting out the middleman or is there still space for agents? Read more on page 31, then join the debate on Property Professional’s Facebook page. This issue includes research to help you know your buyer profile better (page 22), as well as an exploration of the buy-to-let market (page 42). In our cover interview, Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty, confesses he wasn’t passionate about selling houses in the beginning. But 34 years on, there’s no doubting his staying power. Turn to page 24. If you haven’t already, sign up for the Property Professional e-newsletter – more on page 21!
GEAR TO GET YOU AHEAD
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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39 24
18
LEW GEFFEN ON FRANCHISING AND NURTURING STAFF
22
KNOW THE PROFILES OF YOUR BUYERS It’s not as clear-cut as you may think
FUTUREPROOF YOUR MARKETING MIX
47
GENERATION RENT Building for the private rental sector
THE CREATIVE GROUP CEO Shaun Minnie shaun.minnie@thecreativegroup.info Editor Kim Maxwell Content Business Manager Catherine Davis Content Strategist Bridget McNulty Art Directors Mark Peddle and Leah de Jager Copy Editor Kirsty Wilkins Online Editor Andy Möller
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.
COVER PHOTOGRAPHY: STEVE MARAIS
Editor’s note
ARE PROPERTY SITES CREATING AN INDUSTRY SHAKE-UP?
2016/07/01 8:53 AM
Be seen on real estate's favourite website
SKY BLIIE REALTY
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Estate Agent at Sky Blue Realty
Estate Agencies across South Africa
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My Rental Listings
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LOCAL NEWS
LOCAL INDUSTRY NEWS
7% Average increase in residential property sales in Q1 2016
10.65% Increase in residential property prices in the Western Cape in Q4 2015
CAN YOUR BUYER AFFORD THAT BEACH HOUSE? What do you need to be earning to purchase property in South Africa? Lightstone Property has taken into account gross salary per month, the median value of properties, a 20-year mortgage at a fixed prime rate (10.5%) and 100% financing with no deposit. Transfer and other related costs are excluded, and no more than 30% of a buyer’s gross monthly salary would be allocated for mortgage repayments each month (this is based on mortgage lender standard assumptions). The median value for a property in the Western Cape is R680,000, the highest out of all of the provinces, and would require a monthly salary of R22,600. The Eastern Cape has the lowest median value (at R380,000), requiring a salary of R12,600. To buy property in Gauteng, where the median value is R620,000, you’d typically need to earn R20,600 per month. To afford a luxury beach house with a median value range of R11.7m in Llandudno, you’d need a monthly salary of R389,400. A property of R7.2m within the coastal estate of Zimbali would require a salary of at least R239,600 and a property of about R8.35m in De Zalze Golf Estate would require a salary of R277,900.
04
10.1% House price inflation in the lower bracket, the top-performing sector since mid-2015
Source: May 2016 Pam Golding Residential Property Index
PROPERTY PROFESSIONAL
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LOCAL NEWS
The changing way property is viewed
PROPERTY CHANGING CAPE TOWN’S CCID
In 2016, seven new developments or redevelopments have been confirmed for the Cape Town CBD, with at least three having a combined value of about R270m. Property values in the CBD have increased substantially, too. Says Cape Town Central City Improvement District (CCID) chairperson Rob Kane: “In 2006, the City’s official valuation of the downtown area was just more than R6.1bn. By the 2014/15 financial year, this official valuation had risen to close to R24bn. “By the end of 2015, we estimated conservatively that another R8.2bn would be added to this figure over the next five years, with a total valuation of close to R32bn by 2020 across 26 projects. But since January 2016, we’ve heard of at least
another seven development projects coming on board. We do not yet know what they will add to the R32bn, but it does illustrate how intensively the CBD is changing.” Another large transformer of the CBD’s economic landscape is the rollout of the City’s fibre optic broadband network. With R1.7bn spent by the City throughout the metro to connect its own buildings alongside those of the Western Cape Government, the network is now extensive enough to install cables to private buildings. A pilot project introduced by the City’s telecommunications branch in the CBD has resulted in 50 private buildings being connected. Says Tasso Evangelinos, CCID chief operating officer: “It is estimated that by June 2021, about 1,000 CBD buildings will be connected with fibre.”
Using augmented (or virtual) reality, PropScan’s app – available for Android and Apple – allows buyers to search for their new home in an easy-to-use format. Potential homeowners and tenants have access to property information 24/7, with agents’ contact details one touch away via a direct calling/messaging function. Users can narrow down their search to specific areas and price brackets, making it that much simpler to find what they want. All this means increased leads, real-time updates and instantaneous engagement with buyers. Combine it with a higher return on investment (you can list your property for less than R1 a day) and PropScan is a worthy advocate.
By Q4 2015 commercial vacancies decreased dramatically to 10% on average. Retail also fared well, with a 95% overall occupancy rate during 2015. Residential property values increased on average from R1.4m in 2013 to just more than R2m by the end of 2015.
JULY/AUGUST 2016
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LOCAL NEWS
Educational requirements scrapped for property non-excutives The Estate Agency Affairs Board has announced that non-executive directors of estate agencies need no longer comply with the educational requirements applicable to estate agents. Until now, all directors of limited companies trading as estate agents had to comply with stringent requirements, including an internship and NQF qualifications. To many directors, especially those who have nothing to do with the practice of being an agent, these prerequisites were unnecessarily problematic. It also inhibited investors: business people inclined to invest in real estate companies could do so as shareholders but not serve on boards of their own companies. Transformation was also subdued; black entrepreneurs/investors had to find other opportunities or comply with all the educational requirements if they wanted to invest in real estate companies and hold directors' positions. According to the Real Estate Business Owners of South Africa (REBOSA), this move is a breakthrough for business and transformation. There is still an application and paperwork involved: directors have to apply and pay R2,500 to have the application evaluated. Says Jan le Roux, chief executive of REBOSA: “This should apply to any directors not involved in selling real estate or supervising agents doing so. Abolition of this requirement could open the door for highly qualified individuals to become involved in the industry."
LAST YEAR'S RESIDENTIAL RENTAL INFLATION AVERAGES Data compiled by economists at Rode & Associates
NATIONAL
6% THE REAL ESTATE SECTOR IS A VALUABLE CONTRIBUTOR TO OUR ECONOMY
CAPE TOWN
9.6% Property touches the life of every South African. It is a unique sector. It is also a complex and multidisciplinary industry. It has its own set of dynamics and sometimes, even its own language. The real estate sector is a dynamic and valuable contributor to our economy Nomzamo Radebe, newly elected president of the South African Property Owners Association (SAPOA)
JULY/AUGUST 2016
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FASTER.
LOCAL NEWS
How to advise clients on flooring options 43 YEARS IN PROPERTY AND IEASA HONORARY LIFE MEMBER
A
fter 43 years in property, Anne Porter, owner of Knight Frank Residential South Africa, is as excited about the business as she was as a freshfaced newcomer. Her career began after she spotted an ad for a part-time job as a real estate agent in 1973. She never expected to make it a lifetime career. After 10 years, she opened the doors to Anne Porter Properties in Cape Town’s Southern Suburbs. Having garnered a reputation as an estate agency of integrity, Knight Frank UK approached Anne Porter in 2004 to be their partner in South Africa. It seemed the logical next step – Porter saw in Knight Frank the opportunity for her company and agents to grow under the banner of an internationally recognised brand. This resulted in Anne Porter Properties fully rebranding in 2013 to Knight Frank Residential South Africa. Apart from nurturing her own career and business, Porter has been actively involved with the Institute of Estate Agents of South Africa (IEASA) since 1979 and she was made an honorary life member in 2010. In addition, she represented the institute at the National Association of Realtors convention in the USA in 2001.
Good flooring is an essential (albeit pricey) part of a home. Be an informed agent by knowing the basics about wooden flooring options, as explained by Graeme Solomon from Bamboo Warehouse. ACTUAL WOOD
Originally, if you wanted wooden flooring, timber was your only option (typically pine, oak, merbau and teak in South Africa). While these floors can be sanded and resealed a number of times, generally last for years and can be stained if colour preferences change, they are also expensive. In addition, the cost increases with installation, sanding and sealing, plus they take a long time to install. And then there’s the environmental impact of real wood to consider. Cost: from R900m2 to R1,500m2
WOOD-LOOK LAMINATES
From the need to offer a better-priced alternative came laminate flooring that imitates timber. Although the cost is in your favour, it can be damaged far more easily by water, heat, scratches, cuts and flame, which means durability is compromised and resurfacing is virtually impossible. Cost: from R120m2 to R500m2 BAMBOO FLOORING
Then there’s the middle ground: bamboo. It’s ecofriendly, hypoallergenic and firmer than both wood and laminates. It’s also prefinished, so there’s no need for sanding and sealing postinstallation, it looks just as good as traditional wood and it comes in a variety of options. It can be sanded and refinished every 20 years if necessary. Cost: from R350m2 to R700m2
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LOCAL NEWS
New commercial sales and rentals platform
HOUSING MARKET STILL LOOKS WELLBALANCED
The ‘slightly less weak’ economic environment may just have been enough to cause a mild ‘bump up’ to average house price inflation, with the FNB House Price Index yearon-year growth rate accelerating from 7% in the prior month to 7.4% in May John Loos, FNB household and property sector strategist
10
BRIDGET MCNULTY
PROPERTY TREND: THE RISE OF GREEN
Ecofriendly adjustments are increasingly beginning to affect property sales in alignment with overseas trends
O
ver the last two to three years, South Africans have caught onto the ecofriendly property trend particularly prominent in the US. Explains Simon Bray, CEO of Private Property: “We don’t yet have data to show that ‘green’ property is more popular as it’s not being measured anywhere locally, but anecdotal evidence from estate agents certainly supports this view.” While there is a lag behind the US market, a quick look at their statistics could give us an idea of the market potential locally. • Apart from a safe neighbourhood, a home’s energy efficiency influenced home-buying decisions the most, according to a survey recently conducted by the National Association of Home Builders. • As many as 70% of buyers in the Generation X group indicated that they would be willing to pay more for houses that incorporate green technology in the design. • About 25% of new homes sold in the US are now green. In South Africa there are unique factors when it comes to the rise in popularity of ecofriendly property. Last year’s unpredictable load shedding and the significant increase in electricity costs have certainly played a part, as have this year’s water shortages and a growing awareness of making responsible environmental choices. The commercial sector in South Africa was the first to embrace green alternatives for the economic benefits. “The commercial sector is driven to a large degree by the need to maximise return on investment,” explains Bray. “IPD South Africa’s annual green property indicators showed that green buildings outperformed less energy-efficient buildings by about 30% in terms of yields returned.” And more residential developments are being built with environmental sustainability in mind, such as Val de Vie Estate in the Winelands and Menlyn Maine in Waterkloof, Pretoria. It may have taken us some time to catch up to the overseas trend, but South Africa is now well on its way to green being the new gold.
IMAGES: CAPE TOWN CENTRAL CITY IMPROVEMENT DISTRICT, SUPPLIED
The South African real estate market has waited a long time for an effective online platform to showcase their commercial sales and rental listings. Until now, advertising listings has been difficult with various platforms available, but none of them substantial enough to allow for an effective, content-rich experience. Private Property has spent time, in consultation with the industry, to make sure that they understand your market needs. They have built a platform that will effectively allow showcasing of your listings. What you can expect: • Commercial sales and rental listings • Ability to load rich content such as property photos and videos • National coverage • Multiple listing types including industrial, retail, agricultural, office, hospitality and plots
PROPERTY PROFESSIONAL
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When the going gets tough, the tough get stronger. With the support and structure of Chas Everitt International, you can be sure you’ll have everything you need to succeed, no matter how tough the market is. Our franchisees have all the best technology and tools to achieve revolutionary results. Regardless of what the market is doing. To take your business to the next level, contact Gerhard Kotze on gerhard.kotze@everitt.co.za
WWW.CHASEVERITT.CO.ZA
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EVENTS
WHAT’S ON AUGUST
JULY
21
WHAT IEASA OFFER TO PURCHASE AND LEGAL IMPLICATIONS INFO SESSION WHERE Val de Grace, Pretoria CONTACT bit.ly/1U3IV3U
23 26
WHAT 2016 PROPERTY INVESTMENT MASTERCLASS WHERE The Hilton, Durban CONTACT bit.ly/1TRrfWN
18-19 24
WHAT AFRICA PROPERTY INVESTMENT SUMMIT 2016
SEPTEMBER
6
WHERE Sandton Convention Centre, Johannesburg CONTACT apisummit.co.za
WHAT IEASA RENTALS AND EVICTIONS WORKSHOP (CHAPTER FOUR) WHERE IEASA Training Centre, Pinelands, Cape Town CONTACT bit.ly/1UtowSM
WHERE Radisson Blu Hotel, Sandton, Johannesburg CONTACT bit.ly/24t9H8t
WHAT GBCSA ACCREDITED PROFESSIONALS NEW BUILDINGS WORKSHOP WHERE Johannesburg CONTACT bit.ly/1tXxxcF
8
WHAT GBCSA ACCREDITED PROFESSIONALS EXISTING BUILDING PERFORMANCE WORKSHOP WHERE Johannesburg CONTACT bit.ly/1UttuPs
WHAT 2016 PROPERTY INVESTMENT MASTERCLASS
Add to your diary now! 12
All you need to know to stay plugged in to the property industry in South Africa
13
WHAT 2016 ENERGY EFFICIENCY SITE TOUR WHERE The French School, Sea Point, Cape Town CONTACT bit.ly/1U9csKJ
GBCSA GREEN BUILDING CONVENTION 2016 The Green Building Council South Africa (GBCSA) has become a leading authority on environmentally sustainable property in the country. This year’s GBCSA Green Building Convention, held from 26-28 July at the Sandton Convention Centre in Johannesburg, encourages discussions on how best to minimise climatic impact when it comes to the built environment. Expect workshops, networking opportunities and presentations from industry leaders, with the convention’s focus on building a better world now. This is an ideal platform to discuss and share green ideas with others in the business. gbcsaconvention.org.za
PROPERTY PROFESSIONAL
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Don’t work harder, work smarter. We know that as a business owner you’re used to running everything yourself. Which is why we’ve developed a range of superb tools to make your job easier.
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2016/07/01 9:11 AM
INTERNATIONAL NEWS
Europe’s wealth exodus may continue KIM MAXWELL
“EASTERN EUROPEAN COUNTRIES SUCH AS POLAND ARE EXPECTED TO GROW THEIR WEALTH”
Find more international property news at propertyprofessional.co.za
14
I
n 2016, the average European citizen is worth about $86,000. But according to New World Wealth’s Europe 2016 Wealth Report, people living in Europe are not getting wealthier – between 2005 and 2015 their wealth decreased by 5%. The Europe 2016 Wealth Report examined wealth creation in Europe over the past 10 years. The term “wealth” refers to somebody’s net assets (property, cash, equity and business interests) less any liabilities. Europe’s current growth compares poorly to other developed markets, says Andrew Amoils, head of research at New World Wealth. By comparison, the average worth of somebody living in Australia increased by more than 100% over the same 10year period, in Canada by more than 50% and in emerging markets including China, India and Vietnam, by more than 400%. Factors hampering wealth creation in Europe since 2005 include: the migration of wealthy people from Europe, the 2008 global financial crisis and its related housing crisis (impacting heavily on most European citizens’ wealth), increasing income tax rates, loss of jobs to Asia, particularly in manufacturing and the inability of countries such as Greece to handle large pension obligations. Prosperous residents of Europe migrated mainly to
the US, Canada, New Zealand, the Caribbean and Australia. New World Wealth’s recent migration study cited religious tensions, increasing rates of rape and assault, financial concerns, an inability to deal with changing religious dynamics and concern for their children’s futures as reasons. EUROPE’S WEALTH FUTURE?
New World Wealth predicts that the exodus of Europe’s well-off will continue with the loss of primary sector jobs to Asia, especially emerging countries including China, India, Sri Lanka, the Philippines and Vietnam. Eastern European countries such as Poland are expected to grow their wealth. But minimal growth is predicted for western and southern Europe – large European economies such as Germany, the UK, France, Italy and Spain will likely struggle. Europe’s wealth future will depend largely on its ability to cope with changing religious dynamics. By 2050 it is estimated that several European countries (including Belgium, the UK, Germany and France) will have a Muslim majority – assuming all countries stay in the European Union (EU) zone and there is continued freedom of movement within the EU and migration from the Middle East and West Africa.
PROPERTY PROFESSIONAL
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INTERNATIONAL NEWS
LONDON
$42,300 per m2
Overseas secondhome hot spots for
NEW YORK
$30,600 per m2
GENEVA
$29,000 per m2
PARIS
$24,600 per m2
IMAGES: ISTOCK BY GETTY IMAGES
SYDNEY
$22,100 per m2
MELBOURNE $13,200 per m2
MAURITIUS
$5,500 per m2
South Africa’s dollar millionaires in 2015. These figures refer to the price of a 200m2 apartment, villa or house in a prime part of the city. Source: New World Wealth
CHINESE DOUBLE THEIR GRIP ON AUSTRALIAN REAL ESTATE The Chinese are the biggest foreign buyers of Australian real estate. In April 2016 Bloomberg reported that Chinese buyers had received approvals to double their investment in Australia’s residential properties and commercial spaces in 2015 for a second year. According to Australia’s Foreign Investment Review Board’s (FIRB) annual report, Chinese approvals to spend on Australian residential and commercial real estate increased to A$24.3bn in the 12 months through June 2015, up from only A$12.4bn in June 2014. In the 2013-14 financial year, China surpassed the US as Australia’s biggest foreign investor. Bloomberg says purchases by foreigners – many who have a connection to China – helped drive an almost 55% increase in home prices across Australia’s capital cities in the past seven years. This was while mortgage rates dropped to five-decade lows. According to the FIRB, total foreign investment into Australia climbed to A$194.6bn in 2014-15, with an “overwhelming majority” of such deals relating to real estate. Australian law largely limits overseas buyers to purchasing new homes. These foreigners need government approval from the FIRB. Temporary residents can buy new or existing properties with the board’s approval, but must sell when they leave the country. China’s property inflows to Australia are unsurprising, comments John Platter, global PR and communications director for Juwai Chinese international property portal on domain.com.au. “We expect Chinese investment overseas to more than double or triple by 2020, and that is not just in Australia – we mean globally,” he says. JULY/AUGUST 2016
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TOOLS OF THE TRADE
4
GOODIES AND GADGETS FOR WHEN YOU’RE ON THE GO RYAN SCOTT
Chilly winter weather calls for a bit of warmth – these ideas will get you there
RUSSELL HOBBS PTC TOWER FAN YOU NEED IT BECAUSE A 2,000w fan is more efficient at warming up a space than an element heater. A tower such as this one from Russell Hobbs is also easier to move around should you need to – think prevention against potential show day chills! THE NITTY GRITTY You can use the adjustable thermostat to select your preferred temperature or you can fine-tune it with the microcomputer control. It also includes protection from overheating and three settings: fan, low and high. X-FACTOR The Russell Hobbs name: you know you’re buying into a well-known brand, which includes a constantly expanding range of stylish products. R1,050; dionwired.co.za
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HUNTER BOOTS YOU NEED THEM BECAUSE When you’re heading out to meet clients, a pair of Hunter boots such as this strong ‘Original Tall Gloss’ pair in military red provides protection against the elements and gives you a stylish edge. THE NITTY GRITTY They are tailored to fit your lower legs, feet and ankles comfortably, and are constructed from lightweight rubber. The legs fold down easily to make them simple to store. X-FACTOR Hunter boots are iconic: the British brand originated in 1856. But that doesn’t hold back design progression. In 2013, the then newly appointed creative director, Alasdhair Willis, introduced Hunter Original and Hunter Field. The former found its way to the London Fashion Week catwalk. The latter: perfect for weathering the outdoors. R2,449; superbalist.com
PROPERTY PROFESSIONAL
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NESPRESSO INISSIA YOU NEED IT BECAUSE Creating a good cup of coffee is an art and so needs the right machine – Nespresso is it. THE NITTY GRITTY Need that morning cuppa fast? One press of a button and 25 seconds later, this compact, 2.4kg machine will brew it for you. There are two options for cup sizes and it features a 0.7L water capacity. Bonus: the choice of colours, including this sleek white option. X-FACTOR It has to be the sophisticated style and clean lines, making it a perfect addition to any kitchen space. Also, George Clooney is the face of the brand. Need we say more? R1,649.95; boardmans.co.za
IMAGES: SUPPLIED
GSI 1L VACUUM FLASK
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YOU NEED IT BECAUSE You never know when you may need your next caffeine fix. That means having a hot cup of coffee with you while driving between meetings to keep your energy levels at their optimum. THE NITTY GRITTY This 1L vacuum-sealed bottle can keep your drink hot (or cold) for up to 15 hours. The stainless-steel liner and insulating plastic exterior protect your lips and hands from the heat, as well as preserve the drink’s taste. X-FACTOR We like the slip-proof base to make sure the flask doesn’t topple over. The lid doesn’t need to be removed completely to pour your drink, either, which keeps heat loss to a minimum and also reduces potential spillage. R849; rammountain.co.za
2016/07/01 7:09 AM
“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
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2016/07/01 7:10 AM
SOUTH AFRICAN
Know your buyers
DID YOU KNOW
To get the most out of your marketing spend and to be taken seriously as a knowledgeable professional, understanding your buyer profiles is a good place to start
hances are that you don’t. That is because despite the size of South Africa’s real estate sector, which generates about R236bn worth of property transfers a year, there isn’t a definitive set of regularly updated statistics. This makes it tricky to work out who is buying what sort of real estate in various parts of the country, what they are paying and how much they are borrowing from banks to do so.
PERCENTAGE OF HOME LOAN APPROVALS PER PRICE BRACKET June 2015 to May 2016
Source: BetterLife Home Loans (may not total 100% due to rounding)
Gauteng
KZN
that it takes an average of 21 years for homebuyers in Gauteng to pay off a home loan but 23 years in the Western Cape?
C
MEG WILSON
Purchase price
ARE YOU AWARE
Western National Cape
that the Western Cape has a much smaller home loan application decline ratio (16.5%) than KwaZulu-Natal (KZN) at 23%?
DO YOU HAVE an idea of the ratio of male to female buyers in the various regions: single to married, young to old, first-time to repeat buyers?
However, the kind of buyer profiling undertaken by the National Association of Realtors (NAR) in the US has proved to be extremely useful for individual estate agents and agencies. It’s also a good tool for other stakeholders in the sector, such as banks, originators, attorneys, developers and building contractors. It’s with this in mind that we have started to build a picture of real estate consumption in South Africa’s top three property sales regions (see the accompanying tables).
BUYER AND PRICE BREAKDOWN BY REGION June 2015 to May 2016 Source: BetterLife Home Loans (may not total 100% due to rounding)
Regional % of total home loan approvals
% of home loans approved in region
Average property Absa small, medium Average % Average gross monthly purchase price in rand and large homes in rand deposit paid income in rand
GAUTENG (40%) R0-250k R250k-500k
1.4
1.6
4.6
19.6
19.2
16.1
23.1
R500k-750k
23.8
25.2
19.9
22.9
R750k-1m
16.9
18
16.2
16.4
R1m-1.25m R1.25m-1.5m
22
5
8.4 7.7
8.6 8.7
9 9.3
856,765
(S) 851,931
10.5
32,482
Buyer age 18-35
54%
Buyer age 36-55
43%
1,159,596
(M) 1,224,174
18.6
55,169
3%
1,431,599
(L) 2,007,120
33.8
63,632
33,206
Buyer age 56+ KZN (11%)
8.1
Buyer age 18-35
45%
877,005
(S) 702,577
14.4
7.4
Buyer age 36-55
49%
1,152,348
(M) 1,218,240
21.7
47,787
6%
1,291,650
(L) 1,925,363
31.7
56,930
R1.5m-1.75m
5.8
6
8.1
5.5
Buyer age 56+
R1.75m-2m
3.8
3.5
5.2
3.4
WESTERN CAPE (21%)
R2m-2.25m
2.2
2.5
3.4
2.1
Buyer age 18-35
47%
1,165,514
(S) 1,174,277
27.2
33,271
R2.25m-2.5m
1.7
1.6
2.7
1.6
Buyer age 36-55
46%
1,600,573
(M) 1,568,317
36.2
54,795
>R2.5m
5
5.3
8.3
4.8
Buyer age 56+
7%
1,538,527
(L) 2,327,522
35.6
64,515
PROPERTY PROFESSIONAL
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SOUTH AFRICAN
WHAT WE KNOW
These tables can tell you, for example, that Gauteng has a far bigger percentage of buyers (65.3% of home loan approvals) in the less than R1m price bracket compared with the Western Cape, where 53.8% of buyers fall into this category (see first table opposite). Looked at another way, the Western Cape has more upmarket buyers than Gauteng or KZN. There is further evidence in the second table, which shows that Western Cape buyers in all three age categories are purchasing higher-priced properties than their counterparts in the other two regions. The research shows that Western Cape buyers don’t necessarily earn much more than those in the other provinces. This accords with recent research by data company Lightstone Property, which found that the monthly gross salary required by a buyer in the Western Cape is R22,600 – just R2,000 more a month
Gauteng has the largest percentage of buyers in the 18-35 age group (this usually includes the most first-time buyers) and the lowest average home purchase price in this category
DISTILLING THE STATS It’s interesting to note that the averages we calculated for the first two age groups in each province stack up relatively well with the most recent Absa breakdown of prices for small and medium homes. But the averages for our 56-plus buyer groups are much lower than the Absa averages for large homes in all cases and regions. This tends to support increasing anecdotal evidence that a large percentage of 50-plus buyers are downsizing to reduce their expenditure on home maintenance and operating costs as well as home loan repayments. The stats on the breakdown of buyers (see below) suggests that joint purchases by couples or friends no longer account for the majority of home sales in all regions. Single men and women (never married, separated, divorced or widowed) are increasingly buying on their own. But, as noted in the recent FNB Property Barometer, they are waiting much longer to become homeowners. The percentage of buyers who are less than 40 years old has declined to 44%, from a high of 53% shortly before the 2009 market crash.
NATIONAL AVERAGES SUPPLIED
BUYER BREAKDOWN BY GENDER AND STATUS June 2015 to May 2016
April 2016
Source: BetterLife Home Loans
National Average % average price deposit paid in rand
Absa
IMAGES: iSTOCK BY GETTY IMAGES
than a buyer in Gauteng – on the purchase of a median-value property using a 20year home loan at a 10.5% interest rate. But buyers in the Western Cape are paying much bigger deposits than those in Gauteng or KZN, which suggests that most are probably repeat buyers with cash in hand from the sale of an existing property. Gauteng has the largest percentage of buyers in the 18-35 age group (this usually includes the most first-time buyers) and the lowest average home purchase price in this category.
BetterLife Home Loans
1,404,662
1,010,451
Not supplied
19
SINGLE MEN
First-time buyers in rand
Average % deposit paid
Not supplied
Not supplied
718,832
11.5
SINGLE WOMEN
Gauteng
31.7%
29%
KZN
KZN
26.7
%
Western Cape
FNB Barometer
Not 1,075,033 supplied
Not supplied
Not supplied
1,071,814
810,626
12.5
25.1 National
ooba
13
Gauteng
%
29.8
%
27.4
Gauteng
39.3% %
Western Cape
21.2 National
COUPLES/JOINT
%
27.2
%
KZN
45.9% Western Cape
53.7% National
43% JULY/AUGUST 2016
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Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty, is a firm believer in looking after his agents as much as his clients. That awareness is a key requirement in this business
TREAT YOUR CLIENTS AND AGENTS LIKE ROYALTY CATHERINE DAVIS
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PROPERTY PROFESSIONAL
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2016/07/01 7:22 AM
COVER STORY
D
id you know that the first real estate franchise in South Africa was inspired by a Kentucky Fried Chicken (KFC) outlet? And that Lew Geffen and his mother Aida launched the idea in the seventies? That was when Geffen was working with his mother at Aida Estate Agency. It was also well after he had sold his first house at the age of 16 (with a bit of help from mom, of course, on the legal side). While Geffen loved earning money from the commission, he didn’t much like selling houses. His next venture – at the age of 24 – was hawking Iranian copperware on the pavements of Killarney. Says Geffen: “I did well, when I wasn’t running from the police when they tried to clear us off the street. The wealthy Johannesburg women loved the copperware.” Next up was a stint in the building business. But when the recession hit, he went back to selling property at Aida. With three kids now in the picture, Geffen decided that he’d better start learning to like, and even love, real estate. That’s when a branch of KFC moved into their office building in Parktown North. “It was the first time we had actually heard of franchising and we thought ‘we can do that’,” says Geffen. “Instead of using a canned programme from the US, we put down everything we knew about selling property. That converted into the training programme and the franchise business began.” It became clear to Geffen that he was in the real estate business for the long haul. Today, Geffen has sold between R250bn to R300bn worth of properties over 34 years.
ON LAUNCHING A BUSINESS
When did you break away to start your own company? I started Lew Geffen Estates in 1982. By 2000 we were strong in Johannesburg with about 200 agents on the team. We were part of a pack of leaders in the real estate business but we weren’t at the top: we needed something extra. And that was Sotheby’s International Realty? A colleague suggested we contact Sotheby’s. I pushed back at first – in my mind Sotheby’s was an auction house and nothing to do with us. But delving deeper, I found they sold properties too. It began as an affiliation agreement and developed from there. How did South African buyers and sellers respond to the affiliation? The public responded so positively. To me, Sotheby’s has always been an inspirational brand; they were like royalty in the real estate business. Our client profile changed overnight, and I could see I was onto something good. What started as an affiliation turned into a 10-year franchise agreement. And when we decided to franchise nationally, it became a 30-year agreement. How important is marketing in this business? It doesn’t stop at the property: it’s a combination of marketing to your clients as well as to the agents in South Africa. It’s your messages to both of them. It’s about perception and that’s a vital part of the real estate business.
We were part of a pack of leaders in the real estate business but we weren’t at the top: we needed something extra
How to promote property as an investment during rough patches
“You have to remain positive. I remember Sharpeville – that was a tough time. Since then there have been six major recessions. But we’ve come out smiling – the professionals always do. “Because of the sliding rand, people respect that property will hold its value more than anything right now. “The Cape Town market seems resistant to tougher times – it’s harder elsewhere in the country. It’s more sentiment-driven right now, largely due to political uncertainty.”
JULY/AUGUST 2016
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2016/07/01 7:22 AM
COVER STORY
Watch Lew Geffen on video talk about his personal business success and the wider property industry at propertyprofessional.co.za
It’s how you come out of the downs that make or break you in this business
92
Digital disruption
“I’m not worried about digital disruption at all: since Phoenician times people have been trying to get rid of estate agents. But there is a definite skill set to selling a property. It might look easy but it requires a certain knowledge and level of experience. Negotiation abilities can’t be underestimated – without them, emotions get in the way and the sale goes pear-shaped.”
26
How can you make the move from agent to business owner? To make the leap, you need four things: 1. Desire – to want to do it. 2. Bravery – it’s risky. 3. A skill set – the top guys have the necessary industry knowledge. 4. Resilience – it’s not always going to go your way. It’s how you come out of the downs that make or break you in this business. How did you handle the downs? I can recall three mistakes that taught me valuable lessons. The first: someone persuaded me early in my career to charge my agents for the paper they were using in the office. Before I knew it, six of them had walked out the door.
It was a real blow. My young daughter said, “Dad, I’m tired of hearing what they did to you. It was what you did to them.” That hit me: agents are like our clients and you have to treat them as such. My second mistake went like this: I was commissioned to sell the first house for former president Nelson Mandela – which I did. When it came to round two, an important person called me saying he had a client from London who “only wants to deal with you, to see homes in the Houghton area”. I missed the cue and passed him onto an agent of mine. Guess who that person was? Mandela. The third mistake was entering the auction business – bad move. All I will say is: stick to your knitting.
IMAGES: STEVE MARAIS
Number of Lew Geffen Sotheby’s International Realty offices in Southern Africa
PROPERTY PROFESSIONAL
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Lew Geffen Sotheby’s International Realty is extending its national footprint, selling properties from cottages to mansions in every area. We are looking for top end real estate operators to catapult our brand into the following areas:
Ballito
Nelspruit (Mbombela)
Benoni
Pietermaritzburg
Bloemfontein
Soweto
Contact: Jason Rohde (CEO) 083 626 5726 • headoffice@sothebysrealty.co.za www.sothebysrealty.co.za
55% growth in agent
More than 300 delegates attended the 2016 Keller Williams Family Reunion which took place in Swaziland.
Careers worth having. Businesses worth owning. Lives worth living.
count 2015-2016.
☎ 012 940 1223
www.kwsa.co.za
■
WHY.
■
Find out
info@kwsa.co.za
Business Opportunities Available in Prime Areas
with South Africa· s most innovative real estate group
Franchise Support
• •
• •
Office set-up Property listing & deal administration Accounting and EAAB compliance Office marketing & recruitment
In-house training
• • •
Intern programmes Sales skills and technical training Management development
National Marketing Unique equity & incentive programmes Earn up to 20 °/o net profit *Dependent upon office costs and commission structures.
Exclusive areas available in: Gauteng- Sandton, Randburg, Johannesburg Northern Suburbs Western Cape - Southern Suburbs, Atlantic Seaboard, Noordhoek
Brackenfell, Hermanus, Mossel Bay, Knysna Eastern Cape - Port Elizabeth & surrounds Northwest - Rustenberg, Potchefstroom Kwa-Zulu Natal - Umhlanga Rocks, Durban North, Upper Highway, Amanzimtoti and Pietermaritzburg To find out more contact:
Deon van Zyl 082 858 7222/ deon.vanzyl@leapfrog.co.za
leapfrog
PROPERTY GROUP
NEWSWORTHY
REAL ESTATE REBELS?
GEORGINA GUEDES
A number of property websites are threatening to cut out agents with a different approach to online platforms. Is this the beginning of an industry disruption?
P
roperty Fox officially revealed their online sales platform on 19 May, whereby clients can list their own property on the site, essentially cutting out the agent in the process. The company’s model offers sellers one of two payment structures: either 1.5% commission on the sale or a R25,000 payment upfront. Including the “soft” operation five weeks before the formal launch, Property Fox has attracted 35 listings and concluded its first three sales. A fourth was pending at the time of going to press. “We’ve been branded as disruptors in the market,” says co-founder Crispin Inglis. “However, we don’t see ourselves as direct competition to traditional agencies. Many clients would still like the service of an agent – we are offering a slightly different service. Yes, we might be disrupting the industry, but there is still room for agencies.”
JULY/AUGUST 2016
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NEWSWORTHY
HOW DOES IT WORK?
While the intention of Property Fox might not be to put traditional agencies out of business, it certainly seems that low commission rates will be an appealing value proposition for many sellers
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Property Fox takes clients from the property listing itself to the submission of an offer by an interested buyer. Bond application and approval, as well as property registration, still have to be carried out through a bank or bond originators and conveyancers, although Property Fox has partnerships with the relevant service providers. Once the listing has been created, it is submitted to every property portal in the country, including IOL, Gumtree, Private Property and Property24. Because of the purely online exposure, all activity is measurable. The team can tell sellers how many people have viewed their listing, how many of those views led to a phone call and how many converted into physical visits. If a buyer is interested, Property Fox verifies their information before arranging a viewing with the seller. From there, they follow up with all the potential buyers to facilitate an offer. The successful buyer then applies for a bond and the process is handed over to conveyancers. Property Fox’s first two sales have saved their clients significant amounts in commission. A house in Moreleta Park was sold for R2m. The 1.5% commission saved the seller R93,000 if compared to an agent’s commission of about 7%. Their second sale, an apartment in Claremont, sold for R3.5m and saved the seller R220,000 (she opted for the R25,000 payment upfront). While the intention of Property Fox might not be to put traditional agencies out of business, it certainly seems that low commission rates will be an appealing value proposition for many sellers.
2016/07/01 7:56 AM
NEWSWORTHY
THE INDUSTRY RESPONDS
The residential property transaction is – generally speaking – far more complex and nuanced than is usually appreciated, according to Dr Andrew Golding, CEO of Pam Golding Properties. Says Golding: “Our view is that the interest of the buyer and the seller are unquestionably best served by a professional, competent, trustworthy agent, someone who has the necessary experience and knowledge to conclude a transaction successfully concerning what is usually an individual’s biggest asset.” He adds that this is best achieved when the agent is supported by a reputable company, which offers peace of mind and comfort to both the buyer and seller – neither of whom are likely to be property experts. “Of course, it is possible that an individual or company may decide to provide the services according to a different model. But this, by definition, needs to be sustainable. Perhaps more importantly, it needs to ensure that the buyer’s and seller’s interests and especially risk is appropriately managed,” he says. He points out that during the property transaction process, there are multiple interventions and skill sets required, including valuation, marketing, negotiation skills, local area knowledge and the individual agent’s experience, which assist both the buyer and seller in navigating potential technical and legal pitfalls. Private Property claims to be the first South African website offering sellers a way to advertise their homes themselves. The site still offers this option, but according to CEO Simon Bray only a small portion of their market feels knowledgeable enough to do this without the assistance of an estate agent. “Disruption will only occur if real estate agents lose sight of what is
important to their clients,” says Bray. “Those who focus on delivering good customer service, leveraging property marketing platforms to the maximum and engaging directly with their own networks will always be relevant. Some sellers may be willing to use a low-cost alternative, but most will be more comfortable using an established real estate brand.” DISRUPTIVE TECHNOLOGY FOR COMMERCIAL PROPERTY
Another property site being branded as a disruptor is Quoin Online, which targets commercial rather than residential property. But again they offer buyers and sellers a fully automated process, along with online access to the relevant reports and valuations for due diligence. Sale offers are all standardised for ease of comparison and sellers can opt for an open-bid system (which facilitates a kind of auction) or a closed-bid system, which is simply the traditional sales process. However Quoin Online offers its services in line with the same type of commission structure as traditional brokering agreements. They believe their key differentiators are process automation and the fact that their site provides national access to clients hoping to develop their commercial property portfolios. “Brokers still need to play their role. Buying a commercial property is not the same as buying a bicycle. Brokers have relationships with clients and can provide advice on the area, the economy and how the property itself compares to others,” says Wayne van der Vent, Quoin Online founder and director. The site offers brokers the ability to showcase properties instead of having to collect and email the relevant images, documents and reports. JULY/AUGUST 2016
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NEWSWORTHY
ONLINE PROPERTY PLAYERS 34
Some sellers may be willing to use a low-cost alternative, but most will be more comfortable using an established real estate brand Simon Bray, CEO, Private Property
THE CHANGING MARKET
Van der Vent believes the property market is increasingly ready for these kinds of online services, with research from Rawson Property Group showing that online is the first touch for 60% of residential properties. Says Van der Vent: “More and more people are accessing sites from their phones and can do it at times when they are available, rather than during business hours. This kind of automation has changed the way that small investors can buy shares on the JSE. Now property buyers can dabble in investment in the evenings after watching Game of Thrones.” While neither Quoin Online nor Property Fox intend to put traditional agencies and brokerages out of business, the technology certainly has the potential to undercut their services. As more and more transactions take place online, clients will become increasingly comfortable with the convenience of this space. That means brokers and agents will have to step up the human touch and depth of expertise in the services they offer.
KAREN
CRISPIN
ASHLEY
MILLER
INGLIS
JAMES
Estate agent at Quoin Online
Co-founder of Property Fox
Co-founder of Property Fox
IMAGES: iSTOCK BY GETTY IMAGES, SUPPLIED
“This allows the broker to play a more analytical role and takes away the marketing admin because it is all automated,” adds Van der Vent. But how do property brokers feel about this automation? “This kind of functionality is a great idea, as long as it’s user-friendly – especially for brokers and agents, who generally have personality types that aren’t hugely focused on admin,” says Peter Collins, MD of Ikon Offshore Property. “They don’t enjoy sitting at desks – they are networkers and people connectors.” However Collins adds that because the commercial property market is largely run on relationships, it might be a hindrance to Quoin Online’s overall success. “Nationwide, most commercial properties are held by the big funds. It’s rare that a high-end property actually goes on the market because members of the community deal with each other. Quoin Online would therefore be more likely to attract the entry-level guys buying smaller commercial properties.” While the technology behind the site is disruptive, the business itself is not a disruptor, points out Van der Vent. “We are not aiming to undercut the brokers. Instead, we want to offer property owners the opportunity to access national property deals without being tied into a big brokerage firm,” he says. Quoin Online launched in August 2014 and initially, found it more difficult than anticipated to convert people to the online process. Nonetheless, after nearly two years in operation, about 95% of properties listed on the site have been sold. Where a sale has not gone through, it is not as a result of the site methodology. “That’s a pretty high hit rate for commercial property,” says Van der Vent.
PROPERTY PROFESSIONAL
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on
ADVERTORIAL
PROPERTY DEVELOPMENT OUTLOOK FOR 2016 The upward repo rate adjustments, along with the weakening rand, will affect property development costs, intensifying inflationary pressures for consumers and increasing prices of newly built properties
N
edbank senior economist Busisiwe Radebe warns that inflationary pressures will hit consumers’ pockets. Says Radebe: “When inflation goes up, the South African Reserve Bank will have to get that inflation number down to bring about price stability. We are therefore going to see interest rates increase.” Despite these pressures, there remains a strong demand for entry-level and highend residential property. Developers need to take on new projects with this in mind, as affordability is a major dealmaker or breaker in 2016. Looking at the rental market, the current environment presents some benefit, with new property developments viable in the right regions and areas.
For developers, the opportunity also arises to buy property for redevelopment as properties come onto the market from homeowners who can no longer afford to service their mortgage bonds. “Property developers, along with Nedbank and non-Nedbank clients, also have access to the Nedbank-assisted sales programme, enabling them to save between 20% and 30% on the market value,” says Timothy Akinnusi, head of sales and client value management at Nedbank Home Loans. The property development market remains a viable investment vehicle, but investors need to ensure that they invest in demand areas and sought-after property to maximise their returns.
The property development market remains a viable investment vehicle
Timothy Akinnusi is head of sales and client management at Nedbank Home Loans. For more information, phone 0860 911 007 or visit your nearest Nedbank branch. nedbank.co.za/homeloans
JULY/AUGUST 2016
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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 OPTIMISE FOR MOBILE ENSURING THAT YOUR PROPERTY LISTINGS CAN BE VIEWED EFFECTIVELY ON MOBILE DEVICES IS ESSENTIAL. PRIVATE PROPERTY EXPLORES THE TOPIC MORE FULLY
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PROPERTY PROFESSIONAL
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AGENT DEVELOPMENT
Why is mobile so important?
Why is mobile so attractive?
For at least the past two years, more and more people have been using their cellphones and tablets to search for listings on Private Property. The gap between mobile-only and desktop searches, in fact, has become progressively smaller over this period.
What has caused this increasing trend towards mobile? Says Simon Bray, CEO of Private Property: “Smartphones have become so much better and faster, and include awesome screens, so users have a great experience accessing the internet, unlike in the past. Sites such as Private Property are designed to be responsive and provide the user with a fantastic experience on mobile so there is no compromise.” The proliferation of smartphones and the falling cost of mobile data has also made internet access available to a far larger proportion of the population. And, of course, there’s the convenience factor – even those with desktop internet access will use their cellphones at home in the evenings or when they’re out.
SESSIONS
MOBILE
DESKTOP
TABLET
JUL 2015
OCT 2015
JAN 2016
APR 2016
Mobile usage overtook desktop use for the first time in December 2015, which can be explained by the greater number of people accessing the internet via their phones while on holiday. In March this year cellphones again dominated and that trend has continued. At the moment, the difference is still small – about 1% – but it is steadily increasing.
APRIL 2016
10
%
TABLET
45
.38% MOBILE
How to ensure mobilefriendly listings
1 2 3
Add a location so there can be seamless navigation from the listing to the property via maps.
Take quality images that will be clear on a smaller screen.
Make sure your website is responsive or that you use a responsive website to advertise your property.
Most popular mobile devices THE BELOW ARE USED MOST OFTEN TO VISIT PRIVATE PROPERTY
44
.63%
DESKTOP
ANDROID
33
%
iOS
BLACKBERRY
17
%
3
%
WINDOWS
1
%
JULY/AUGUST 2016
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REBOSA is calling on all estate agents to
TAKE THE REBOSA EQUALITY PLEDGE TODAY REBOSA has a zero tolerance approach to all forms of discrimination in the real estate industry and in society.
DISCRIMINATION
STOPS WITH ME
Go online to www.rebosa.co.za and show your support by taking the ONLINE PLEDGE and saying “NO” to discrimination.
WWW.REBOSA.CO.ZA REAL ESTATE BUSINESS OWNERS OF SOUTH AFRICA
Rebosa_Property_Prof_Mar_Apr.indd 1
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BUSINESS KNOW-HOW
Your buyers and sellers are looking everywhere: newspapers, portals, YouTube and on social media. To sell more houses, you have to meet them there, armed with great content
Y
our existing and potential clients are now, more than ever, connected to businesses and what they offer. And their expectations from companies and brands are high. The rise of this new, always-on client is a golden opportunity to enhance engagement and win more leads. But it also brings with it a series of challenges and the need for brands to be wherever clients are, to be trustworthy, sustainable and useful. In this new era of client engagement, marketers risk becoming totally overwhelmed by the number of media platforms available and ways to engage. It can also become an expensive and time-consuming exercise if cost efficiencies aren’t employed and the right support is not in place.
JULY/AUGUST 2016 
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BUSINESS KNOW-HOW
SOUTH AFRICAN MEDIA LANDSCAPE TODAY
According to a local World Wide Worx study, Facebook has 13m users, Twitter has 7.4m followers, YouTube has 8.28m users (it’s the third-most visited site in the country) and LinkedIn has 4.6m users. These are numbers that cannot be ignored. On top of that, print is not dead – it can’t be forgotten. Says Esmaré Weideman, CEO of Media24: “Last year we commissioned an independent study on the engagement levels that print readers offer advertisers. The results confirmed what we have always known: no audience is as engaged as a print audience. We believe the sweet spot lies in combining digital and print advertising for maximum effect.” But do your research about where and when to advertise in print. Know who you want to target and what the publication reach is. Sometimes a smaller but niche readership is more powerful.
Using video allows you to market each property to its fullest, instilling trust and competency with sellers and buyers
of sellers would choose a real estate agent who could market their property with video. It makes sense. Real estate relies on visual content – it helps buyers find meaning. They want video to give them a better understanding of a home. Using video allows you to market each property to its fullest, instilling trust and competency with sellers and buyers. Other benefits include: • Longer dwell time on your site/listing: if your site has video, users are likely to stay longer (an 88% increase, in fact). The longer a user stays, the more likely they are to translate into a lead. • Websites that include relevant video improve search engine and property portal rankings. • Profile videos can be used for reputation management and brand-building.
For more smart marketing tips and advice visit propertyprofessional. co.za
On top of your portal listings, brochures, show boards, client database management, referral network and client service, you need to position yourself for a contemporary print and increasingly digital future in line with changing consumer consumption habits. Build a sustainable base for growing your business by removing extra costs and creating cost-effective strategies and networks that can be leveraged across all media. Like any marketer in this fast-changing media environment, an agent should use integrated tactics to capture an audience so they feel supported in their buying or selling journey, create brand awareness, prove his/her ability to perform above and beyond anyone else in the market – and ultimately, win that sole mandate.
WHAT THAT MEANS FOR YOUR MARKETING
VIDEO IS THE NEXT BIG THING
IMAGES: iSTOCK BY GETTY IMAGES
Video is becoming a central part of marketing strategies. The statistics are everywhere: video will account for 79% of all consumer internet traffic in 2018; 73% of UK content marketers use video; 82% are experiencing success with video marketing initiatives. According to a special report on social media in the US real estate industry, YouTube is used most to showcase listings – for marketing agents’ businesses and for building personal brands. The National Association of Realtors (NAR) backs this finding: YouTube is now the top video research destination for house hunters in the States – more than 50%. NAR also found that 73%
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PROPERTY PROFESSIONAL
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SMS WARNING AUTO-GENERATED AND SENT TO TENANT
PAYPROP-RETAINED LEGAL COUNSEL SENDS ORIGINAL TO TENANT BY REGISTERED MAIL
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FINANCE
THE FUTURE OF INVESTING TO LET ANNE SCHAUFFER
Is South Africa’s buy-to-let property market still a sure thing? Smart buyers are finding that profit may not be a foregone conclusion but good research can still yield results
BTL investing tips From Myles Wakefield CEO, Wakefields Real Estate
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Buy only where there is a constant and keen demand. Is there a factory nearby, a college, great transport routes? There is a vast emerging market looking to rent or buy first homes in so-called entrylevel suburbs.
Be an informed rental agent. Your clients are entitled to ask about figures achieved for similar apartments in the block/area. Make sure there’s a match between purchase price, achievable rentals and demand.
PROPERTY PROFESSIONAL
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FINANCE
S
o far 2016 is shaping up as the year of the financial yo-yo, with economists trailing movements by local politicians and credit rating services, and struggling to deliver solid long-term investment advice. The potential impact on the property market is slightly unnerving. What message can you to take to a potential buy-to-let (BTL) client? Are there “better, cheaper and smarter ways to make money from property investments,” as Magnus Heystek, director and research head at Brenthurst Wealth Management, unequivocally suggests? And is it telling that he describes himself as the “original residential property market bull many years ago”? Heystek’s recent Moneyweb article titled ‘Buy to let has become buy to regret’ elicited a vociferous response, most respondents concurring or adding their own experiences. Said Heystek: “A perfect storm has now hit the buy-to-let market and literally tens of thousands of investors countrywide, perhaps with the exception of the Western Cape, are, according to one buy-to-let owner, ‘slowly being squeezed to death by a giant financial anaconda’. Rates and taxes have been rising on average at almost double the inflation rate per annum over the past five years and more.” Heystek is of the view that under current economic and political conditions in South Africa, BLT could prove to be “very costly” to your clients’ personal wealth. CONSIDER THE CURRENT MARKET
Historically in South Africa, BTL has been considered a good investment: buy a rental property with a small deposit and large mortgage. Then rent it out, the tenant pays off the mortgage and with regularly increased rentals, covers all the costs and more. A decade or two later, the bond’s paid off and investors can either live off the rent or sell for a tidy profit. What’s not to like?
Help buyers do their sums. Work out mortgage bond figures: will the rental cover their costs, with a little residue for emergencies and possible bond rate increases? Keep a record of all expenses for tax purposes.
During the 2002-2008 residential property boom BTL moved from a fringe investment vehicle to a near trend. Says Heystek: “Such was the allure of BTL that at the peak of the market in 2008, almost 25% of all South African residential property sales were in the BTL category, according to FNB.” Today he estimates that figure to be less than 6% (with commercial banks tightening on granting of bonds) and likely to reduce further in months ahead. Adds Heystek: “As properties get older, maintenance costs rise while property values themselves – both in real terms and in some cases in nominal terms – decline. Since 2008 the residential property market has declined by about 20% in real terms and is still firmly in a bear market.” PROCEED WITH CARE
When it comes investing in BTL property there are numerous variables but two factors are crucial; one controllable: the extent of prepurchase homework. The other is not: the bond rate. Seeff Properties chairman Samuel Seeff advises caution. “While property is one of the best investments and it carries an inherent propensity to deliver capital growth, investing purely for the BTL market should be done with great care. There is no one solution that fits all and while there is usually significant demand for rental accommodation – especially during challenging economic times – not all properties or areas experience the same level of demand. The property in which [clients] are thinking about investing may not be the type that attracts tenants: too expensive, wrong area ...” he says. Importantly, advise potential buyers to consider their options before making this type of investment. Says Seeff: “If [buyers] are looking to diversify [their] investment portfolio to add
Be cash-flow positive from day one. Include a steady annual increase in rent and find a fully vetted tenant.
Two-bedroom houses/flats appeal to the widest range of potential tenants – avoid large family homes Paul Stevens, CEO, Just Property
property into the mix, then it may make sense. But don’t expect stellar returns as a matter of course. With the economic decline that we are seeing right now, the rental returns (yields) are likely to dip again, not just in the non-Cape markets but even in the Cape.” DO PROPER RESEARCH
Clearly, the more pressurised the property and financial landscape, the more thorough the homework required. Paul Stevens, CEO of Just Property, offers these pointers for your potential BTL investors: “Buy the property that is most ‘lettable’ (has the biggest tenant market). Two-bedroom houses/flats appeal to the widest range of potential tenants – avoid large family homes. Don’t restrict yourself to your immediate area but research nearby where rental yields may be markedly better. Ensure the area has a healthy market for tenants – convenience and accessibility (transport links, schools and retail) are priorities. “Using a mortgage makes your money work harder. Whether interest-only or repayment is your decision, but a rental income high enough to cover a repayment mortgage is a good indicator that you are getting things right. Take out a fixed rate if you are uncomfortable about the chances of interest rates rising, although you will pay a premium.”
It’s all about the numbers. Your client needs to cover their costs and manage the investment well. Long term – provided the bond rate doesn’t increase sharply – chances are that capital appreciation will come into play.
JULY/AUGUST 2016
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CHANGE THE FOCUS
Heystek’s unbundling of the topic provides much to think about. He references the Rental Monitor Q4 2015 report on credit bureau Tenant Profile Network’s website, the upshot of which is that 30% of tenants typically pay late or not at all. He says this gets to the heart of the current problem: “Rental growth has been slowing for almost three years and in some parts of the country has become hugely negative. Apart from the Western Cape, property prices and rentals are not rising but costs and the hassle factors are. “Listed property investments have been the best investment class over the past 10 years, returning almost 20% per annum year after year. The difference in net wealth over the same period between a BTL investor and
JSE-listed property investor or, even better, a global fund, must be enormous today.” Myles Wakefield, CEO of Wakefields Real Estate, has a clear-cut, analytical approach to investing in BTL. “Capital growth isn’t the focus, it’s the bonus. The focus is on covering costs from day one. But it’s also about reviewing the concept of location,” he says. Just as the country’s demographics alter, so too the property market: there is a vast emerging market looking to rent or buy first homes in so-called entry-level suburbs. According to Wakefield, these are the areas experiencing the highest letting and sales interest and volumes. While not everybody agrees on the value of BTL as a long-term investment, there is consensus that BTL is for clients who are in it for the long haul.
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INTERNATIONAL
BUILDING FOR GENERATION RENT KIM MAXWELL
Catering to today’s changing household requirements, the private rented sector is fast attracting interest by large investors as a sustainable long-term investment overseas
S
outh Africa’s plans to roll out affordable mixed-use social housing developments are often in the news. But if international trends are any indication, there is growing demand for, and investment opportunities in, the private rented sector (PRS), too. The UK is one of the frontrunners of the PRS or build to rent (BTR) concept. Traditionally, private amateur landlords, who typically manage one or two properties, own this rented accommodation, the result of buy to let (BTL) or mortgage loans secured in the late 1990s. But unlike its BTL predecessor, offering units originally intended for the owner-occupied sector, BTR is created solely for the PRS tenant. These include rented properties within bigger developments in convenient urban locations. And increasingly, the emphasis is moving towards purpose-built apartments with tenant-focused lifestyle amenities, with maintenance issues swiftly managed by professional teams. Knight Frank’s Investor Survey 2015/16 shows that by 2020, large-scale UK investors will triple the UK’s BTR sector from its current £15bn investment value to about £50bn. Primarily institutional investors such as pension and investment funds, these investors will be looking to hold large blocks of purposebuilt rental accommodation over the long term – bringing the UK in line with the US and Denmark, where residential rented accommodation is a specific asset class.
BTL
Buy to let
BTR
Build to rent
PRS
Private rented sector
2020
£50bn 2015
£15bn Current and expected UK investment in the PRS by large-scale investors
Source: Knight Frank’s Investor Survey 2015/16
GOOD YIELDS
Knight Frank’s survey calls PRS the second-biggest form of tenure after home ownership in the UK, having overtaken the social rented sector there. The 16 large-scale PRS investors interviewed in their investor survey claim to operate off an average gross-to-net yield of 26% for new BTL developments, with variables depending on the location and type of building. But is rental demand increasing sufficiently to keep pace? It would seem so, if responses from younger property residents are an indication. Knight Frank’s separate Tenant Survey 2015/2016, carried out by YouGov, collates the responses of 5,000 residents of privately rented accommodation in Great Britain. These help to identify key market trends, broken down by region, age group and income. This tenant survey reports that the PRS is growing in size, with about 5.4-million – 20% of UK households – now being let out to private tenants. There has been a generational shift in the PRS too – more households now live in rented accommodation for longer. While housing affordability is obviously a factor, a key difference is that rented accommodation is becoming an established flexible form of residence. It is particularly popular among younger people.
JULY/AUGUST 2016
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INTERNATIONAL
71%
UPGRADE OR DOWNGRADE
of major investors want to hold and run fit-for-purpose rental accommodation for more than 10 years
LETTING AGENCY OPPORTUNITIES
According to Graham Norwood, editor of Estate Agent Today, an estimated 60% of German adults (24-million households) rent privately. This trend is catching on in the UK. Explains Norwood: “BTR is the institutional investment in building and managing blocks of flats to let – the next big thing in the British residential industry. “About 9.5-million of those rental units are built and managed by institutions; the financial vehicles used to fund them range from real estate investment trusts to banks, and even some churches, which have funds and housing-related histories.” According to Norwood, small-scale landlords own Germany’s 14.5-million other rental units – in the mould of the British BTL sector. Germany’s BTL landlords typically handle their own property management. Norwood flags the German BTR sector (where institutions invest in apartment blocks but leave them to property experts to manage) as an opportunity for greater involvement by letting agencies. Norwood also singles out the US for BTR, or what Americans term multi-housing. “Like Britain, the US is slowly reversing its home ownership trend. A decade ago only 31% of the population rented; now it is 35% and accounting for 43-million households,” he says. “Some 25-million of them are in what we in Britain call BTR accommodation, a figure reached more rapidly than expected thanks to the US housing recession.” When economies are tight, renting often becomes a more practical financial choice over mortgages.
33% Gym
22%
A 24-hour concierge/ security
31%
Swimming pool
20%
Storage
27%
Communal terrace/garden
24%
Allocated offstreet parking
10% 9% 6% Allocated on-street parking
Entertaining Movie space room
UK TENANTS ARE WILLING TO PAY EXTRA FOR THE FOLLOWING
What the UK’s PRS tenants want
• The majority (53%) favour a six-month or one-year tenancy for rented accommodation. • More than half (52%) of tenants say living close to their work or place of study is a priority. For 30%, their main reason for moving between rented properties is to upgrade to a better or larger property. • More than one-third (38%) of tenants have lived in five or more rental
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If the UK model is any example, bigger investors can eventually reap rewards. Says James Mannix, Knight Frank’s head of residential capital markets: “Our Investor Survey indicates that major investors are working hard to provide fit-for-purpose rental accommodation, which they intend to hold and run for a long period – 71% of investors say for more than 10 years.” On the tenant side, there seems to be take-up. “Most of the demand in the rented sector is from young, economically active people with concentrations in urban centres. These people view themselves as being relatively transient and renting affords them the flexibility to upgrade, downgrade or move according to their circumstances,” says Mannix. And as Norwood points out, smaller estate agencies need not fall by the wayside. Far from it, as BTR aims at the mid- to higher-end tenant. So the bulk of renters in the rest of the private sector are likely to lean more heavily on agents for the properties of BTL landlords. Potentially the size of the growing PRS should be big enough that BTL and BTR should easily be able to co-exist.
IMAGES: SUPPLIED
WE LIKE RENTING
In the tenant survey, 38% of under 35s answer that either they don’t want a mortgage or that renting actually suits their lifestyle. This figure increases to 49% for those aged under 25. The number of under 45s living in the PRS in the UK has also increased to 3.1-million people. In the UK and elsewhere, private rentals are increasingly being seen not as only a short-term tenure, but as a valued longer-term housing option, with only 24% of tenants saying they would leave the PRS within two years.
properties. While the majority moved to within 1.5km of their previous property, nearly 20% moved more than 100km, indicating that they relocated for work or study. This highlights the flexibility of the PRS as a form of residence. •N early one-quarter (24%) of Londoners are prepared to pay a maximum amount of 50% of their gross annual income on rent. •O ne-quarter of those living in the PRS either do not want to, or don’t know if they want to, buy a home in the future.
PROPERTY PROFESSIONAL
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ADVERTORIAL
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hen innovation and creative thought meet technology, exciting things happen. PropScan is a mobile app that makes the task of searching for a property so easy. The platform, simplistic in operation, allows estate agents and brokers to advertise properties in real time. Users can then view a listed property in a preselected area by using augmented reality. A new concept to the industry, tech geniuses have taken the real world and merged it with the virtual world. That
means all users need to do is point their smartphone in any given direction to search for their ideal property. From there, it is simple to communicate with listing agents using the app to complete the process, giving you real-time leads from interested buyers. The intention is to grow the use of PropScan to all spheres of the industry, including residential property sales and rentals, commercial sales, rentals and auctions, land for sale and short-term/ holiday rentals.
If you want to be a forerunner using this innovative technology, phone 082 412 2055, email propscan@mweb.co.za or visit propscan.co.za, and you can get to know how you can market your properties at less than R1 a day. The app is available for both Apple and Android.
JULY/AUGUST 2016 
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2016/07/01 9:06 AM
Harcourts Conference 2016
Congratulations to all our award winners, who inspire all of us to be the best we can be as real estate professionals. Personal and business achievement deserves to be celebrated and here at Harcourts it is our custom and, in fact, our privilege to celebrate our colleagues’ victories loudly and oft en. These people represent the very best of our organisation, who through teamwork, skill and determination, have achieved amazing results over the past 12 months.
TOP OFFICE FOR 2016 HARCOURTS PLATINUM Congratulations to Harcourts Platinum for taking the title of Top Office 2016 based on revenue. Hard work and dedication has paid off. We salute you!
BLUE CIRCLE SOCIETY This elite society is exclusive to the top five performing agents in the group, based on commission earned. These consultants have earned in excess of R1.4m in sales and achieved quarterly platinum status for a minimum of 3 quarters during the same financial period. From left: Ann O’Gorman (Harcourts Rhino), Ryan Kourie (Harcourts Rhino), Tiffiny Hancock (Harcourts Ambers), Jason Hutton (Harcourts Platinum) and Maureen Nel (Harcourts Winelands).
ROBERT WILLINK KETJEN LEGACY CLUB Harcourts’ top 5 business owners in South Africa were recognised in a special way and became the 2nd-year inductees into this prestigious club. Andrew Line, Dennis Hamer & Iréne Prinsloo, Etienne Labuschagne, Louis Barbosa & Mauro Mosca, Steve Caradoc-Davies, Eberhard Kruger, with Mike Green (MD Harcourts Intl.) and Richard Gray (CEO Harcourts South Africa).
If you’re looking for a career in real estate with a company that recognises and rewards our people, give Harcourts a call today!
Harcourts. With you all the way. T 0860 33 77 88 | harcourts.co.za
Harcourts Conference 2016
Steyn Marais (Harcourts UD) Harcourts Rising Star Office Award
Etienne Labuschagne (Harcourts Select) Harcourts Chairman’s Award
Vuyo Kahla (Harcourts Cornerstone) Quest for Knowledge Award
Jenny Shaw & Robyn Smith (Harcourts Two Oceans) Living the Harcourts Way Award
Maureen Nel (Harcourts Winelands) Top Sales Consultant - Commission -
Tiffiny Hancock (Harcourts Ambers) Top Sales Consultant - Units -
Steve Caradoc Davies (Harcourts Platinum) Award for Online Excellence
Christel Willett (Harcourts Head Office) Team Member of the Year Award
Yolande Kunneke & Adrie Jansen van Rensburg (not pictured) (Harcourts Sapphire Coast) Harcourts Office Administrator of the Year Award
Andrew Snyman (Harcourts Hillon) Harcourts Rising Star Award
With thanks to our partners.
TOP TIPS ANTHONY FEUILHERADE
5 things security companies wish agents knew about show houses Ensuring that adequate security measures are in place while you are showing a property is essential to minimise potential thefts
2 HOST EACH SHOW HOUSE WITH ANOTHER AGENT
From a security perspective, two sets of eyes can be more efficient than one. Both agents should accompany visitors around the house to limit the risk of theft.
3 CARRY A PANIC BUTTON
Agents can ask their clients to inform their security company if they are hosting a show house. They can let the company know that they have access to a panic button in case of problems during viewing hours. Panic buttons are unobtrusive, can be hidden easily in the palm of your hand and can be activated swiftly, alerting the security company to any security threats. The control room has the house’s co-ordinates
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and location, and can contact the relevant authorities for assistance.
4 KEEP THE GATES AND DOORS LOCKED UNTIL PEOPLE REQUEST ACCESS
Homeowners, after all, are limited when it comes to preventative measures while the home is in the agent’s care
While this may be a logical part of everyday home security, it comes across as unwelcoming to have the doors and gates locked when inviting potential home buyers to view the property. It is, however, the first defence in security, forcing people to ask to be invited into a home. It also means the agent has information about whether visitors are arriving by foot (and perhaps ambling around the neighbourhood looking for opportunities) or by vehicle. The latter does not preclude criminal intent, however, especially if their attitude and behaviour appears suspicious.
5 ASK OWNERS TO TAKE RESPONSIBILITY FOR THEIR POSSESSIONS
In modern society where crime is a common occurrence, it is unrealistic for homeowners to leave laptops, jewellery and valuables lying around when strangers are traipsing through their premises. Protect yourself as an agent by ensuring owners have hidden away their valuables and other small items.
Anthony Feuilherade is the MD of Enforce Security Services, the largest privately owned and managed security company. enforce.co.za
IMAGE: SUPPLIED
1 APPOINT A SECURITY GUARD
It’s not unheard of for people posing as prospective buyers to steal items from a property on show. I believe that the responsibility should fall on the estate agency to secure show houses and avoid items being stolen from the property. Homeowners, after all, are limited when it comes to preventative measures while the home is in the agent’s care. One option is to hire a security guard for the duration of the open house – the cost varies from R300 to R500 a day.
PROPERTY PROFESSIONAL
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2016/07/01 7:44 AM
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REAL ESTATE BUSINESS OWNERS OF SOUTH AFRICA
LIFE HACKS SIMON BRAY
How to maximise online engagement
T
here is a definite correlation between great content and how your portal listings will perform: plenty of quality information increases views and subsequently sales, and users will tend to view you and your brand more favourably. With this in mind, more and more agents are now embracing the idea of improved content. These techniques are a good starting point to enhance the information available for property shoppers.
THE MORE DETAIL PROVIDED, THE HIGHER UP YOUR LISTING WILL APPEAR IN SEARCH RESULTS
IMAGE: SUPPLIED
This means that more people will see your listing, as they are rated according to the amount of information provided. The minimum requirement (three images, the asking price, expiry date, complete address, property description, land size, home type and number of bathrooms and bedrooms) will give your listing a score of 25%. All additional information will increase the score. This includes: a virtual tour and floor plan (30%), 12 unique high-res photos (15%), address (10%), map location (10%), additional price details including levies and rates (5%) and the floor/ land area (5%).
MAKE THE MOST OF PORTALS
Instead of merely listing a property, use portals as an opportunity to sell it. Beautiful photos create the most impact: buyers can fall in love
with a property before they see it in person. Virtual tours, too, allow 360-degree views of every room and they also create credibility, ensuring that a Private Property representative has already evaluated the house. To increase views, make sure the description does the property and its associated lifestyle justice.
Quality property listings are essential to optimise market interest – so take heed of these five portal practices to increase engagement
Instead of merely listing a property, use portals as an opportunity to sell it
BOOST YOUR RATINGS
Listings enhanced with value-added opportunities such as “spotlight” and “featured” stay at the top of the rankings, gaining on average 4.6 times more views compared to normal listings.
REMOVE OUTDATED LISTINGS
One of the most frequent complaints from portal users is when a property that has been sold or rented is still listed as available. It leads to anger, frustration and a feeling of deceit, creating a bad perception about the agent and portal. Either take it down or place a “sold” sticker over the listing – a great ad for the effectiveness of the agent.
COMMUNICATE WITH CLIENTS EFFECTIVELY
A detailed ad can be wasted if communication is poor. Responding quickly to queries is essential or the client will move on to another agent. Stay in constant contact, be proactive (don’t let the client call you more than you call them) and let their thoughts and feelings be heard.
Responding quickly to queries is essential or the client will move on to another agent Simon Bray is the CEO of Private Property, as well as being a software designer, online marketer and avid surfer. He brings to the business a passion for technology and a deep understanding of the industry. privateproperty.co.za
JULY/AUGUST 2016
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ness n
ggle
y e
ONAL
ng ent eve e
ting
as in
JO-ANNE STRYDOM
In it for the long game Success is either extremely difficult or extremely easy – it’s your choice
A
tough market, stringent lending criteria from banks and repo rate changes are just some of the factors that result in estate agents exiting the industry. According to information shared at the RealNet National Franchise seminar, of 70% of buyers and sellers using the services of an agent, only 20% trusted their agent. An estimated 80% of new agents will leave the industry within a year. This is despite the enormous potential offered by real estate. How can you do a great job and ensure that it’s a good fit for you?
STICK TO THE FUNDAMENTALS
Quite simply, agents who list will last. Make sure your property is marketed correctly through, for example, portals such as Private Property and Property24. In addition, following the basic steps – prospect, present, close, service – will go a long way. Honesty and integrity in all your client dealings are non-negotiable to make a good impression. Keep up the good work with these additional, easy-to-implement tips: • Maintain a positive mindset. Potential clients will pick up on a lack of energy or laziness and this may influence their decision-making process. • Be motivated and assertive. Don’t take the first no as an answer; instead be confident
56
Working in real estate is not easy, especially with the changing economic climate. But it can still be rewarding. Here is what it takes to be successful during tricky times
in your abilities as a salesperson (without being overly pushy). Rejection is part of being an estate agent – it’s not personal, it’s business. • Set measurable and achievable goals. Have targets to work towards and stay focused while reaching them. Avoid falling into a comfort zone – put in more effort than neighbouring agents to stand out. Make sure your expectations are realistic. • Keep up appearances. This is a people game – and that means first impressions count. Your personal presentation is therefore critical to improving your sales pitch. • Don’t let a lack of training get in your way. Study for relevant qualifications, take advantage of any opportunities to go on training courses, stay on top of industry developments and ensure your personal management skills are working hard for you.
TAKE YOUR INDUSTRY GAME FURTHER
Success is either extremely difficult or extremely easy – it’s your choice. It’s important that every client walks away happy with the offer presented to them. That may mean investing in a smaller market share to provide better service and increase your commission.
Honesty and integrity in all your client dealings are non-negotiable to make a good impression
A bigger market share may mean you lose out on deals – but remember, the one who leads with stock, leads the market. A drone, website or app may help with information and increase your organisational skills, but they are not a substitute for empathy. Under certain circumstances, a hug can actually be a better sales tool. In addition, turn up the AC/DC in your car: “Activities: Correct, Daily and Consistent”. Finally, the more you practice, the better you will become – shortcuts won’t get you there. While the real estate industry may not be easy, with enough hard work and drive, you can make it work for you.
Five top tips 1.
2. 3. 4. 5.
Ensure you have a prospecting and marketing plan. Be techno-wise and change with the times. Understand the millennial mindset as well as new market trends. Work smarter not harder. Understand that education transformation is a reality.
Jo-Anne Strydom has been in real estate for 21 years, initially as a sales agent before moving to training. She studied Real Estate Advanced Practices in Miami. She has carried out contract work for leading agencies and accredited service providers in South Africa.
IMAGE SUPPLIED
o
MOTIVATION
PROPERTY PROFESSIONAL
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