With 43 000 estate agents in more than 11 000 firms and other organisationsregistered with the Estate Agency Affairs Board at the end of last year,some commentators say there may be an oversupply.

But board spokesman Clive Ashpol says the real estate pie will increasefourfold as the board encourages the emergence of a secondary housing marketin formerly disadvantaged areas where there is a shortage of estate agents.

"Looking at the figures as of the end of last year one would get theimpression that there is an overabundance of estate agents, but we believethis is a misperception since the transformation of the industry is goingto massively expand the necessity for new estate agents."

He says the board is intent on transforming the real estate industry,which implies a broadening of the industry to encompass 45-million people.

"While we concede that in certain of the advantaged areas there maybe an oversupply of estate agents, we are encouraging the emergence ofa secondary housing market in formerly disadvantaged areas where thereis a shortage of estate agents."

Ashpol says the board expects the number of estate agents to peak at5000 at the end of this year, but it does not think this enough for newand expanding market areas.

"People who previously didn't accept housing as a store of wealth orgenerator of income are now becoming used to the idea that properties canbe bought and sold as circumstances change," he says.

Ashpol says that houses can also be used to generate finance for thestart up of a business.

"The broad masses of the population are adopting a more pragmatic viewof the utility of fixed property as an economic asset."

He says currently 80% of all registered estate agents are in Gauteng,Western Cape and KwaZulu-Natal.

It seems some in the real estate industry are already looking at secondarymarkets as the next port of call. Last week Pam Golding Property grouptraditionally associated with the upper end of the market announced thatit would be operating in Khayelitsha, Cape Town.

Group CE Andrew Golding says the move was part of a black empowermentinitiative started at the beginning of last year.

With a property charter expected to be in place by next year, otherlarge estate agencies will probably follow suit to speed up transformationin what until now has been a white-dominated industry.

Golding says that the empowerment initiative would take the form ofa franchise agreement.

In Khayelitsha, this agreement is with a group of five entrepreneurs,two of whom are black and three white, which will also service the nearbyMitchell's Plain area. In an interview last week, Golding said Pam GoldingProperty was already trading in Khayalitsha and Mitchell's Plain.

He says the group is looking to create 10 offices countrywide this yearthat will be black owned and managed. Golding says 24 territories havebeen identified in SA, with the focus on Johannesburg, including Soweto,and Cape Town, as well as areas in KwaZulu-Natal and Eastern Cape.

"I think there is a huge part of the market that was formerly unserviced.This is one of the reasons why we are doing this. We've done our numbersand believe by providing exceptional service and quality there are revenueopportunities in every part of the market."

Golding also says there is tremendous potential being created with CapeTown's huge "greenfields development" already under way in Khayalitshafor about 1 500 properties, selling from R120 000 each.

"The long-term plan is that those now buying these houses are goingto be looking to improve their circumstances and buying more expensivehouses over time. There is massive potential in secondary markets."

Pam Golding is currently in discussion with leading property developersand investors to secure multibillion-rand greenfields developments.

RE/MAX southern Africa CEO Bruce Swain says there "clearly is an emergingblack middle class and the black elite" and that these are relatively newmarkets which need to be serviced.

However, Swain says the number of estate agents has increased significantlyand although he is not in favour of putting in place unnecessary barriersfor their entry into the market, there should be continuing education ofagents.

"I would support the big brands because of their training programmesthey have in place."

He says every week there are new agents being advertised in newspapersand that often they are not the best qualified, especially for people buyingproperty for the first time.

Business Day
Publisher: Business Day
Source: Business Day