The Volatile Real Estate Industry
By: Tanya Kisten
Everyone wanted to jump on the Real Estate band wagon when the price of property grew so rapidly during the golden years of 2000 to 2006, when house prices rose by an average of 20% annually. With a newly emerged middle class grabbing the dream of owning their own property, the market grew by a whopping 35.7% in 2004 (www.globalpropertyguide.com), resulting in dreamlike commissions for agents during this time.
The downside of this surge, however, was that sellers and buyers alike were being fleeced by agents and lenders who were not observing industry ethics on what is the single most costly investment most people will make in their lifetimes. The introduction of the National Credit Act (to protect borrowers from borrowing above their means) in 2007 contributed substantially to the slowdown of house prices in 2008 (www.property24.com). Add the increase in interest rates and the global financial crisis and the property boom ground to an abrupt halt with the prices of houses actually falling that year by 9%.
The Real Estate industry has been severely affected by the economic crisis, the new legislation as well as government clamping down on unscrupulous and unqualified estate agents who cashed in on the steep trends in the housing market. South African house prices only rose in 2012 during the past six years.
While the industry is cautiously optimistic (the house price index for medium-sized houses rose 2.14% during 2013), the industry will never be the feeding frenzy it was at the beginning of the millennium, according to ABSA. External factors have played too, with consumers experiencing an interest rate hike, fuel prices reaching record levels, along with food and utility prices going up.
Adrian Goslett, chief executive officer of RE/MAX Southern Africa believes that although the factors mentioned above may delay first-time buyers from purchasing a property, it has not deterred them from wanting to own property.
“The higher cost of living makes buying a property seem a lot harder in the current market, but despite all of this, surveys suggest that many first-time buyers are still holding onto their dreams of owning a home, and are eager to get their foot into the property market as soon as possible.” he says.
The Estate Agency Affairs Board ensures that those selling houses are equipped to do so. With the broadening markets from townships (there are currently about 1,850,000 registered properties in South Africa that were traditionally known as townships) and foreign investors, it is critical that this industry is regulated.
The fundamental requirement for an estate agent is the successful completion of the Further Education and Training Certificate in Real Estate (NQF level 4). After 30 June 2015, no estate agent may practice without this qualification, or register for the professional examination for Estate Agents without it.
Khanyisela College is the only locally-based accredited training provider offering this qualification, with unrivalled learner support and constituent assessors and moderators. Register for this qualification now, and take advantage of the 2014 prices before they increase in 2015.