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Roadblocks on Highway 2024: top 5 challenges and tips for agents and agencies

Roadblocks on Highway 2024: top 5 challenges and tips for agents and agencies

MAIN IMAGE: Adrian Goslett – regional director & CEO of RE/MAX of Southern Africa, Herchel Jawitz – CEO of Jawitz Properties, Samuel Seeff – chairman of the Seeff Property Group, Jeanne-Mare Oosthuizen – general manager and director of the Rawson Property Group, Dr Andrew Golding – chief executive of the Pam Golding Property group

Senior writer

From a weak economic outlook to the uncertainty present in an election year, 2024 comes with its own challenges.  We have filtered through the noise, highlighting the top five challenges estate agents are likely to encounter and bringing you expert advice from industry leaders.

Challenge One:

Too much dependence on future downward interest rate adjustment:

Post-pandemic, the challenges in obtaining credit and the rate at which the interest rate rose have created much uncertainty in the market.

With buyers increasingly more cautious in their property purchases and wanting more bang for their buck, negotiations can take longer, and many have moved to the sidelines in anticipation of lower interest rates.

Agent response tip: A lower interest rate on a higher total home loan debt might cost the buyer more in the long run than a higher rate on a lower-value home loan. Also, sideline waiting, whether because of the interest rate or not, can cause all the waiting buyers to flood the market when the interest rate is lowered, causing inventories to drop and home prices to rise more rapidly. The best time to buy a property is when rates are higher and demand is lower, say many economists.

Agency voice: Adrian Goslett, regional director & CEO of RE/MAX of Southern Africa

“For those who can afford to buy, the time to invest in real estate is now. House price appreciation has been slowed by the high interest rates, but this will undoubtedly pick up as soon as interest rates lower. Those who have cash at their disposal can lower the amount required on a home loan to bring down the monthly repayments.”

Challenge Two:

Political unrest and the global economy:

Obviously, this is more relevant to agents that have an international presence or deal with foreign investors and local investors wishing to acquire property outside SA borders. Impactful global events, especially those that create a shift in alliances, change commercial investment decisions, which in turn reduce the demand for residential housing.

However, pertinent to the SA real estate market is political uncertainty, which, in an election year, cannot be discounted. Where political uncertainty prevails, foreign investment into real estate tends to flounder due to fear and lack of confidence, which can have a knock-on effect on local real estate investment sentiment, particularly in coastal environments.

Agent response tip: Encourage diversification of an investor’s real estate portfolio by buying properties in multiple locations and types of properties. Political uncertainty is usually temporary in a democratic society, but property values will continue to thrive and increase in value in the long term. Agents should stay informed of the potential risks of political unrest and murmurings and be flexible in their sales strategies. Bear in mind that other agents are under similar pressures, and strengthening relationships among competitors can result in benefits for multiple agents and agencies.

Agency voice: Herschel Jawitz, CEO of Jawitz Properties

“We have a strong trend from South African investors to acquire properties overseas both as a financial investment in a foreign currency and, in some cases, an offshore residency investment. For the most part, these investments have been made in countries like Mauritius and in the UK and Europe where long-term political stability has prevailed together with economic growth.“

Challenge three:

Recruiting and retaining new agents:

Recruitment has been ranked consecutively over at least the past two years as a serious business challenge. The market is sensitive to economic, migratory, regulatory, and other natural events, which now require agents to have interpersonal and emotional skills in addition to sales skills, something the youth or new entrants can only acquire through experience.

Lack of resources (such as tech) within smaller agencies, not enough commitment to the PPRA’s qualification process for property practitioners, and inability to secure a regular income at the start of a career are but a handful of negatives that do not attract devotion to the role or sustain interest in a property career.

Agent response tip: Structure a strategic training plan with strong, experienced mentors to guide new entrants and sustain their immersion into the sector. Approach local educational facilities and present real estate as a professional career, not forgetting to promote the industry’s need for IT skills. Teams should regularly revisit their strategies, identify skills and knowledge gaps, and plan to overcome problems. Encourage those who lack sales skills to stay in the industry by offering them other roles, such as administration, marketing, tech, etc.

Agency voice: Samuel Seeff, chairman of the Seeff Property Group

“Attracting and retaining talented estate agents is a challenge for any real estate agency, whether you are big or small. As a start to ensure we are able to attract and retain the best, the Seeff Property Group prioritises building and maintaining a robust, reputable brand with the resources for success and strong backup support across all touchpoints. Equally important is our focus on people with learning programmes and support, and recognising sales achievements with an awards programme.”

Challenge four:

Adapting to technology:

Virtual and augmented reality, artificial intelligence, blockchain, big data… the ever-changing digital transformation and its cost can be financially encumbering to agencies. However, Proptech is positioning real estate companies to be innovative and thereby gain an edge over their competitors. Big this year is hyper-personalised content, which uses predictive analysis and datasets to allow agents to better respond to their clients. Agents appear slow to trust, learn, and engage with tech, preferring instead to use familiar social platforms.

Agent response tip: Agencies that have been slow to adopt tech-enabled tools may have an opportunity to leapfrog competitors that are using tech by investing in the most up-to-date digital offerings. Efficient and seamless applications are popular among millennials and Gen-Zs, which translates into pulling in the future property owners of the future. Merging a number of digital platforms to interact in marketing efforts minimises time spent online.

Agency voice: Jeanne-Mare Oosthuizen, general manager and director of the Rawson Property Group

“Technology has streamlined our real estate operations to a large extent, has enhanced customer experiences, and has allowed for better decision-making by agents and clients alike. At the Rawson Property Group, we fully believe in the value of the in-depth market knowledge, property experience and neighbourhood expertise that a qualified agent brings to a property transaction, and we believe that it is essential to equip our agents and business owners with intelligent tech tools and systems to enable them to deliver the truly value-adding experience that today’s customers demand and deserve!”

Challenge five:

Dealing with rejection:

Market mirroring of the economic downturn is reflected by a smaller pool of buyers for a large number of properties, elevating competition. Rejection of cold calls or sellers’ choices to use other agents may be familiar territory to the experienced but not to new agents stepping into the current market.

Agent response tip: Consider partnerships with other teams or agents who may have stronger skills in an area in which weakness has been identified. It may result in split commissions, but a stronger listing portfolio could result in increased sales. Find a niche, such as only focusing on a type of property or a type of buyer/seller and become known as an expert. Identify high-yield activities and develop a lead-generation strategy to tap into those. Personalised and quick reactive service remains a priority for ensuring long-term historical relationships.

Agency voice: Dr Andrew Golding, chief executive of the Pam Golding Property group

“In the current market, agents are advised to align themselves with a brand which has a reputation for service excellence, established systems, databases of homeowners and active buyers, and top performing agents who work together. There is no doubt that brand credentials are critical in this sensitive and uncertain economic environment.” 

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