Property market remains ‘in the family’
THE black middle class may be propping up the residential property market, yet those raking in the money from the house trade remain almost entirely white, News24 reports.

Much of the more than R10billion that the real estate industry earns yearly in commissions ends up with a few family-owned businesses that have not achieved much in terms of advancing black participation in the market.

After 15 years of democracy there is not even one black-controlled real estate business of consequence in the market.

Residential properties worth about R300bn get traded annually in South Africa by largely white female agents to an increasingly black clientele – even in upmarket suburbs.

Portia Mofikoe, spokesperson for the industry regulator, the Estate Agency Affairs Board (EAAB), said: “It must, in the first instance, be pointed out that the transformation of the profession to reflect the demographics of South Africa is still very much a work in progress.”

The proportion of black estate agents to white is at a very low 8%. But this is a lot higher than a year ago and has been achieved largely by default.

The tough market conditions have driven thousands of white estate agents out of business.

The EAAB’s books in 2007 reflected 86000 registered estate agents, but the number now stands at below 50000 agents.

The dominant market players say the lack of transformation in real estate is not due to lack of trying.

Lew Geffen, chairperson and co-owner of Sotheby’s International Realty South Africa, says: “It’s a harsh business with no guaranteed income. Every day you wake up unemployed and only get to be in business once a deal is finalised.”

Sotheby’s has 75 franchise principals and only one is owned by an entrepreneur with a previously disadvantaged background.

Geffen says industry regulations are onerous and he feels that the new qualification requirements will further hinder black people from entering the business.

Berry Everitt, managing director of the Chas Everitt International Property Group which groomed Rali Mampeule, a leading black realtor, says his company is a motivated party for black economic empowerment.

Chas Everitt, too, has not had much success with its franchising model. Only three of its franchises are black-run, accounting for about only 12%.

Everitt also suspects that black people, many of whom come from poor backgrounds, are not too keen on what is entirely a commission industry.

Mampeule says most residential real estate companies in South Africa are family- owned and as a result “they are just not prepared to transform”.

He says: “There are black property entrepreneurs who can successfully reach high standards; they are just faced with the challenge of capital and support.”

Mampeule says many black people do not recognise being an estate agent as a profession of choice. “This will, however, change with the new education dispensation that was introduced in July 2008.”

He says programmes newly introduced by the EAAB will aid black participation.

RE/MAX and Pam Golding Properties, which have also adopted a franchising model as a way to advance empowerment, have not had much success either.

While they have a few black franchisees on their books, none of them have their offices in any of the black townships.

RE/MAX has about 16 000 agents throughout the country, only about 2 800 of whom are previously disadvantaged persons. The situation is not much better at any of the other leading realty groups. — DDC

Article from: www.dispatch.co.za