Seeff Property Group, National Marketing Manager, Ted Frazer shared the problems of transformation in the property sector with Housing in Southern Africa.
Frazer says that while there is certainly some progress being made, it is widely accepted that the real estate industry needs to up the pace of transformation.
The Property Practitioner's Bill published in the Government Gazette on 31 March 2017, imposing tighter levels of regulation on the industry, there is now growing importance on the Property Sector Transformation Charter. This involves a framework to establish the principles for BBBEE, including employment and entrepreneurialism in the sector.
Research released recently by the Property Sector Charter Council shows that the property sector achieved an average BBBEE recognition of Level 4. While this does show some progress, the relatively slow rate of transformation in the industry, such as how the category is perceived by prospective employees and its operational and remuneration structures.
He says that if we just look at the remuneration model, the real estate sector a commission-based industry, the income being generated through a commission that is derived only once sales transaction have been concluded. Frazer points out that even then, it can take months before being realised several months, once the property has been formally registered at the Deeds Office.
The changing economic climate has also seen a dampening of employment confidence in the real estate sector. This has slowed down the rate of transformation as many previously disadvantaged job hunters do not view the real estate sector as an attractive and secure employment opportunity. It is well known that many candidates from previously disadvantaged backgrounds left the industry following the global economic downturn of 2008.
Various industry initiatives including REBOSA (Real Estate Business Owners of South Africa) is encouraging transformation. Seeff as an industry leader is for example looking at ways to accelerate the process. This includes looking at creating career opportunities, supported through SETA grants that are further subsidised by licensees in the group.
Seeff is currently training 40 young previously disadvantaged unemployed learners with an average age of 25 to become real estate agents. The long term plan is to ideally place these candidates in branches for workplace experience with the option to employ them full time. This offers learners a viable career path.
However, while there is a real need for the industry to accelerate transformation, it still remains an industry that is commission based. The sector will continue to attract only those individuals that are either entrepreneurially-minded or have some independent means to sustain themselves financially until they are able to generate a viable income through property sales.
“For the industry to attract more people of colour to its ranks, it needs to be economically thriving. Sadly, as with the rest of the economy, property is beginning to feel the effects of poor economic and political decisions and this is likely to remain a challenge for the industry,” says Frazer.