Extended lockdown will further hamper agents’ income
MAIN IMAGE: Tony Clarke, Rebosa Chairman
The Covid-19 pandemic keeps on playing a major role in the lives of South Africans and people worldwide. The economy in various sectors has been hard hit and the high number of deaths due to the fast spreading virus, has impacted the South African livelihood to a very large extent, something that would probably only be really realised once this has passed.
The hospitality industry is one of the sectors hardest hit by the various levels of lockdown instituted by government over the past year. The wine and restaurant sectors are particularly hard hit, with many outlets having to shut their doors with the resultant loss of income for employees, owners and landlords alike.
It is estimated that during the first 19 weeks of lockdown R3bn was knocked off retail wines sales and R3.7bn off wine tourism alone.
Now a further lockdown on the hospitality industry was announced by pres Cyril Rampahosa this week and the business sector is reeling at yet another loss of income.
The retail sector in South Africa is being hit with serious ramifications amid the decisions to curb the spread of the pandemic. With all retailers deemed as non-essential services and goods not being able to trade during the next 14 days, both landlords and retailers find themselves in stormy waters yet again. Landlords will have to face up to retailers refusing to pay rental for the duration of the lockdown, a trend seen throughout the globe.
With production slowdown in South Africa, an already struggling industrial sector is set to endure even harder times leaving already high vacancy levels more constrained. Due to the lockdown, rental growth is set to slow even further while business confidence is also likely to continue to fall.
The office market which is already going through a transformation, with an increase demand for serviced offices, open plan working environments and hot-desking, resulting in reduced office space per person, will have to wait and see what effects the lockdown brings, with many people optimally operating in a work from home situation, enforced by the lockdown..
According to Tony Clarke, Rebosa Chairman, the effect of the new lockdown will exacerbate the increasing pressure on the property industry.
“The effect of the amended level 4 lockdown will be absolutely devastating on our industry and our economy as a whole. The previous lockdown level 5 brought our industry to a complete standstill.
“With the Deeds Office closures, all registrations, which is our income, was suspended for months on end. The Deeds Office only effectively re-established their pre-lockdown volumes of registrations towards the end of August 2020 – which meant the industry earned no income during April and very little in May, June, July & August.
“Whilst we exprienced a property sales ‘boom’ post lockdown – attributed mostly to record low interest rates, the Deeds Office still reported a 11,35% drop in registrations between January 2020 – December 2020 – which equates to a drop in registration value of R26,373,851,206 for the period, compared to the previous year. That’s a significant drop and effects not only our industry, but also that of conveyancers and the fiscus because no property transfer tax can be levied if no properties are transferred.
“Not only were sales agents hit hard, rental agents felt the brunt too. Due to rental holidays granted by landlords, tenants not being able to pay rent and no-eviction regulations and many tenants buying instead of renting which lead to high vacancy rates and reduced rentals. The rentals market is only now starting to regain its footing,” he stated.
What is worse for estate agents is the lack of support for them due to a reduction of income caused by the lockdown measures.
“Because agents earn commission only, and no UIF is payable if you are a commission earner, there has been absolutely no support offered to estate agents by UIF/TERS relief fund. Our regulator has also been notoriously ‘absent’ in fighting the plight of agents, both during lockdown and thereafter,” Clarke said.