Agents cant buy much property themselves, survey shows
Despite being hard-working and very experienced, most SA estate agents could not themselves afford to buy the homes that they market.
Thats the finding of a new survey of the SA real estate industry, which shows that while the average price of the properties sold by estate agents in the past year is just over R1m, more than half (54%) of the agents polled earn R13 000 a month or less which means that at most they could buy a home costing around R400 000.
Another 28% of agents earn between R13 000 and R26 000 a month, which would only qualify them to buy a home priced at around R800 000 at most, even at the current low home loan interest rates, and would certainly preclude them in most cases from investing in second or third properties.
Indeed, says Dr Willie Marais, national president of the Institute of Estate Agents (IEASA), not even one agent in five is earning the kind of income that would enable them to individually purchase a home costing R1m or more despite the fact the typical agent works full-time (an average of 42,5 hours a week) and that 90% have received specialised real estate training.
What is more, the situation was just the same five years ago, at the height of the property boom, when a similar survey showed that only 20% of agents then earned more than R20 000 a month. So it is really time to put to bed the image of the high-flying estate agent earning millions of rands a year for doing very little.
The huge majority of agents in fact work long and irregular hours for uncertain and irregular rewards.
This is no doubt an important reason why the industry is still failing to attract very many young people, he says, with the survey showing that only 8% of agents currently operating are under-35 compared with 8% who were under-30 five years ago.
On the other hand, there is positive news in the survey for consumers, with the results showing that 67% of the agents currently operating have at least five years experience and that 37% have actually been in the industry for more than 10 years.
In other words, the dramatic drop in agent numbers over the past two years appears thankfully to have been due mostly to the exit of those people who jumped on the real estate bandwagon when the property market was booming.
The just-released 2009 survey of the industry, conducted by an independent researcher with the backing of IEASA and Property24 as well as the Estate Agency Affairs Board, is the second such poll ever conducted in SA, the first having been done in 2004.
Distributed to 42 000 agents registered with the EAAB, it probed a wide range of characteristics of agents and agencies, including demographics, business activities and technology usage, as well as compensation structures and although participation was entirely voluntary, it drew a strong response.
This revealed among other things that the typical SA agent is aged between 35 and 55 (54%), married with two children (72%) and works for an independent agency (74%) on a commission-split basis.
Article by: www.ieasa.co.za