Estate agent numbers dwindling

Johannesburg - Since October last year the number of registered estate agents has shrunk by more than half to about 40 000 - from a high of 84 000 between October 2006 and October 2007.

So says Wendy Machanik, managing director of Wendy Machanik Properties.

At the same time consolidation is taking place, with smaller businesses being swallowed by large estate agencies, points out Sotheby's International Realty chairperson Lew Geffen.

This is not, however, regarded as a disaster, but more a shake-out, separating the wheat from the chaff. Geffen and Machanik agree that it's positive for consumers because those remaining in the market are generally better trained, and thus better equipped to give good service.

"This is specifically against the background of the new Estate Agents Affairs Board (EAAB) training system, in which prospective estate agents and those holding fidelity certificates for less than five years will in future have to obtain a qualification to operate as estate agents," says Machanik.

The two basic reasons for the dramatic decline in agent numbers are the effect of the National Credit Act and, more recently, the international credit crunch.

Geffen says the Credit Act has affected the housing market negatively because the number of potential buyers qualifying for a home loan has significantly declined, and the credit crisis has made banks so careful that rejected home loan applications have risen sharply.

Bond originator ooba's latest figures indicate that 51% of home loan applications were rejected by banks in September this year, 10.4% more than in the previous year.

Machanik says that the Credit Act has led to a paradigm shift in the market, where buying a house is no longer a simple matter. This means that prospective home-owners will have to take careful stock of their finances, saving enough for a deposit and seriously considering how they spend their money.

- Sake24