It will be ‘business unusual’ for agents in the recovering market

The shake out of the property market is nearly over but the industry decks have been cleared, leaving only the hard core of estate agent ‘survivors’ and opportunities for a rebirth.

However, says Gerhard Kotzé, CEO of the ERA South Africa property group, it will definitely not be business as usual going forward, and the market will see more creative and innovative ways of delivering service and professionalism, which is good news for home buyers and sellers alike.

“I expect to see lots of new business models, new products and healthy competition for business between the top players that are left. Also, because there’s little flexibility on the financing side, we will be back to the intrinsic value of a given deal – that is, value for money in both the property itself and the service.

“Levels of professionalism overall will improve while changed market fundamentals will ensure there is no runaway price inflation in a very different environment to that which existed up until mid-2007.”

Meanwhile, he says, the market situation has already been relieved to some extent by lower interest rates that have reduced the cost of debt servicing although there is only a minor chance of further rate cuts soon.

“And while new mortgage advances remain low, this will change as the economy picks up a modicum of momentum. The latest Absa figures further substantiate this picture of modest recovery, with the prediction that there will be a 3% drop in house prices for 2009 as a whole.”

As it is, he says, the onset of summer has brought with it a more upbeat mood in the property market and agents are reporting a definite increase in sales day turnouts and completed deals, with security villages still being in the greatest demand.

“The bottom line is that we’re entering a new cycle of the market with less speculative activity and more solid growth, serviced by fewer agents whose professionalism will be in demand.”

Article by: www.era.co.za