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Who didn’t want to be an estate agent four years ago? After all, the industry was raking in buckets full of money on the back of one of the strongest housing booms South Africa had ever seen. Back then, residential property sales were topping R20bn/month. House prices were surging at double-digit rates and demand from residential property buyers seemed never-ending. By end-2007, the influx of new players wanting to share in the spoils of a buoyant housing market saw the number of registered estate agents rocket to more than 80 000. Most of the big real estate groups – such as Pam Golding Properties, RE/MAX and Seeff Properties – trebled their turnover between 2002 and 2007 and hot-shot agents were making small fortunes in the process.
But the party came to an abrupt end early in 2008, when the sub-prime crisis and global recession hit home. The boom quickly turned to bust and within 12 months housing sales had halved. Figures from property research group Lightstone show the number of residential property transactions slumped from around 16 000 in April 2008 to less than 9 000 in April 2009.
A staggering 50 000 estate agents have since left the industry. But the 30 000 or so estate agents still trying to eke out a living in a market where sales volumes remain 40% below 2007 peaks have over recent months been bombarded with a myriad other challenges. In fact, lacklustre housing demand now seems to be the least of beleaguered estate agents’ problems.
The Wendy Machanik trust fund scandal, subsequent allegations of irregularities at other estate agencies, the acrimonious sacking of Nomonde Mapetla, former CEO of the Estate Agency Affairs Board (EAAB) and the fidelity fund certificate mess she apparently left behind, have plunged SA’s residential real estate industry into turmoil.
Concern about the impact of the new Consumer Protection Act (CPA), proposed new labour relations legislation, onerous new entry qualification requirements and ongoing pressure to transform are adding to the industry’s woes and could prompt a further haemorrhaging of estate agents over coming months.
“The industry is suffering from a huge self-esteem crisis,’’ says Ronald Ennik, a director at Leapfrog Property Group. Ennik says the current state of affairs was first triggered last year when friction between the sectoral education and training authority (Seta) and the EAAB emerged regarding the introduction of new real estate qualification standards. “That created a lot of confusion among both estate agents and consumers.”
Then the Wendy Machanik debacle broke, which has raised suspicions that more alleged fraud and corruption among estate agents are waiting to be discovered. The in-fighting among EAAB board members and perceptions that the board has lost its power as a regulatory authority have further eroded confidence.
Allegations that thousands of estate agents are practising illegally without the required fidelity fund certificates have added more fuel to the fire. Says Ennik: “Collectively, those issues have seriously dented the industry’s credibility and reputation and have alienated the public from estate agents.”
Pam Golding Properties Group CE and Institute of Estate Agents of SA (IEASA) president Andrew Golding says it’s unfortunate the Wendy Machanik scandal and Mapetla dismissal coincided, as this has created the impression in the media the entire profession is corrupt. “The perception is the industry now requires a widespread clean-up. But in reality, confirmed cases of irregularities have been few and far between.”
Berry Everitt, MD of the Chas Everitt International property group, echoes a similar sentiment. “The fact that the EAAB is in total disarray doesn’t mean the whole real estate industry is falling apart.” For example, Everitt says nobody would suggest that if the Financial Services Board collapsed it would automatically spell poor corporate governance at all insurance companies. “The truth of the matter is that – despite woefully poor leadership by the EAAB for several years – the huge majority of estate agencies and agents are trading legally and above reproach.”
Everitt says most of those agents without fidelity fund certificates have paid their registration fees and spent much time and effort trying to obtain those from the EAAB.
What’s particularly frustrating, says Rawson Properties’ northern region and business development director Sean McCauley, is reputable agents have worked hard over the past few years to rid the industry of its “unscrupulous” label. But that’s all come undone. McCauley says suddenly buyers are uncomfortable to hand over cash deposits. “Someone buying a house for R1m needs to provide a cheque for R100 000 to the estate agent handling the sale and they’re wondering if their money is safe. But who can blame them under the current circumstances?”
Industry players say that apart from trust fund fraud and mismanagement accusations, estate agents also have to deal with a host of new legislative issues, forcing the industry to re-educate itself and re-align business practices.
Seeff Properties chairman Samuel Seeff says the introduction in mid-2007 of the National Credit Act (NCA) in itself was a massive piece of legislation that significantly altered the way estate agents operate. More recently, the industry has had to come to terms with the Consumer Protection Act (CPA).
Still more changes will be introduced under Nedlac, via SA’s new Labour Relations Act, the new Property Transactions Bill – supposed to replace the Estate Agency Affairs Act – and the Property Transformation Charter currently being introduced. Seeff says in addition the NQF level four and five qualification standards that come into play from next year will significantly raise the entry barrier to new estate agents.
Existing estate agents registered with the EAAB before July 2008 are also obliged to obtain the NQF4 or NQF5 qualifications through the Recognition of Prior Learning (RPL) route. Seeff says the latter entails a compilation of a comprehensive portfolio of evidence to prove you have the necessary skills and experience to operate as an estate agent.
Although legislative changes, coupled with the new qualification standards, will no doubt help raise levels of professionalism and improve the image of the industry among consumers, Seeff says it could also prompt more agents to leave the industry. That’s particularly true for older agents who simply don’t have the inclination to comply with the introduction of the new legislation and requirements.
Industry players are obviously keen to re-establish credibility and confidence as quickly as possible. The question is how best to go about it. Most estate agents welcome the EAAB’s recent announcement of a three-month amnesty period. The latter gives estate agents until 15 July to disclose any possible contraventions of the Estate Agency Affairs Act.
But Golding for one would like to see the EAAB take more decisive steps to help restore the good name of reputable agents. “The majority of estate agents aren’t dipping into trust fund accounts and the best way to prove that is for the EAAB to proceed with the forensic inspections of all estate agencies, as it initially intended doing.”
Golding says the industry would also welcome a closer working relationship with the EAAB, something that’s been sadly lacking over the past few years.
Rawson’s McCauley agrees the EAAB’s “closed door policy” will no longer suffice. “Real estate agents and their regulatory body should start working together on finding ways to improve the industry’s credibility among consumers.” McCauley says Wendy Machanik’s fall from grace has exposed a huge weakness on the corporate governance front within the residential real estate industry, an issue that needs to be addressed jointly by the industry and the EAAB.
McCauley argues the EAAB could also affect amendments to the Estate Agency Affairs Act in terms of trust fund account requirements. The Act stipulates every estate agency must have a trust fund account, irrespective of whether they use it or not. “There’s no reason why any estate agent should keep money on behalf of homebuyers,’’ says McCauley. For example, the Rawson group’s policy has for the past three years been to hand over all deposits directly to their attorneys.
A key concern for Ennik is the lack of funds to help mend the industry’s tarnished image. Although the IEASA looks after the interests of estate agents, Ennik says many don’t pay membership fees to the industry body. That means there’s a shortage of funds to promote the interest of estate agents. “We need to re-establish the industry as a respectable career choice. But how do we lure young, rising talent without a well-funded marketing campaign?”
Seeff believes consolidation among real estate agencies is the way to go, as the market is overtraded. “Our industry is still highly fragmented. Margins have become very thin while everyone’s cost base has risen. It would help create a more stable market place if we could see fewer but bigger players emerge.”
However, in an industry dominated by family-owned brands, consolidation is easier said than done. Seeff concedes it’s a difficult conundrum, as those who have built up family businesses over decades are loath to see their personal brand history effectively being wiped out.
Meanwhile, Seeff says it’s possible the industry will lose another 10% to 15% of registered agents (between 3 000 and 4 500), particularly if housing activity remains in the doldrums over the next six to 12 months. The latter seems a likely scenario, judging by the latest data emerging from banks, which paint a rather bleak outlook for SA’s residential property market. In fact, latest housing data suggest house prices will drop again this year, mirroring the market’s 2009 performance, when they dipped in nominal terms for the first time in more than 20 years. That despite interest rates now being at their lowest level in 35 years.
FNB property strategist John Loos expects an average decline of 1,2% for this year as a whole but warns there’s some downside risk to that forecast, given the potential negative knock-on effect the political unrest in the Middle East could have on oil prices, inflation and interest rates.
Property economist Erwin Rode is equally bearish, saying house prices are likely to continue to contract in real terms until 2015. Industry players blame stubbornly high levels of household debt, an uncertain labour market, banks’ still-high deposit requirements and an oversupply of sales stock for the housing market’s weak performance.
Sharp increases in electricity tariffs, municipal rates and taxes, as well as food and fuel prices, are other factors bound to keep home buying decisions on the backburner for the time being.
However, one thing is certain: those estate agents who survive the current fallout and manage to stay the distance will reap the benefits when the housing market turns. And there’s no doubt it eventually will.
SALES ACTIVITY
How estate agents’ fortunes have changed
HOUSING ACTIVITY may well have recovered somewhat last year after hitting rock-bottom in 2009. However, the total value of sales was still down a substantial 37% from 2007 peaks. Figures from Knowledge Factory’s South African Property Transfer Guide (SAPTG) show residential property sales worth R150bn were registered at the Deeds Office last year against the R238bn registered in 2007 (see bar chart). This includes all sectional title and freehold properties priced up to R10m. Sales were down an equally hefty 41% over the same timeframe.
Assuming 80% of all housing transactions were conducted through an estate agent at an average commission rate of 5% (excluding VAT) we can deduce sales commissions generated by estate agents slumped from around R9,52bn in 2007 to R6bn last year, which means a massive R3,52bn was wiped off the industry’s potential income in three years.
The fact that it takes so much longer to sell a house than it once did is further eroding estate agents’ monthly take-home pay. FNB figures show the time it takes to sell the average house rose to close on five months (134 days) in first quarter 2011. During the boom years, estate agents took an average of two months to seal a deal.
In addition, sales commission levels have come under pressure, as competition to secure sole mandates continues to mount. Seeff Properties chairman Samuel Seeff says there’s no doubt tough market conditions have forced commissions down from an average of 7% (excluding VAT) during the boom times to a current 5% average. Seeff says the trend may still be downward, with further cuts in commission levels a possibility.
Industry players say, turnover aside, the profitability of different real estate groups, individual franchise/licence holders and agents will depend on the way their business models are structured. Most groups are either franchise- or licence-based, branch-owned or a mix of both. With those traditional models, agents usually share their commissions on a 50:50 split with franchise branch owners. Franchise/licence owners usually pay the annual fee (usually a fixed percentage of turnover) to the group.
RE/MAX is an exception. Its agents get to keep a large portion of their commissions earned, but unlike the traditional model have to foot the bill for overheads and marketing themselves.
Be that as it may, at the height of the property boom top agents operating under the major real estate banners could easily sell five homes a month and earn a gross sales commission of up to R3m/year. Back then, the average agent reportedly earned R20 000 to R30 000/month in commission. Today, Rawson Property Group director Sean McCauley says the average estate agent takes home no more than R5 000/month.
INDUSTRY PLAYERS
Who’s who in SA real estate
WHILE MANY of the smaller brands and one-man shows have fallen by the wayside during what’s arguably been the toughest three years ever experienced in the South African housing market, some industry players have actually cashed in on the downturn.
In fact, the brands that have survived the fallout are vying more aggressively than ever for a slice of the property pie. The market has become so competitive few real estate groups are currently prepared to divulge their turnover figures.
But when performance data is made available, competitors are quick to dispute each other’s claims. As one industry player puts it: “Believe me, everyone is significantly down over the past three years yet most are talking their book up. So it’s difficult to get a true market comparison.”
Nevertheless, while industry players continue to jostle for position it appears rivals Pam Golding Properties (PGP) and RE/MAX have retained their dominance as the industry’s two big guns – both in terms of staff numbers and sales turnover. PGP currently has around 1 500 agents on its books, while RE/MAX is slightly ahead with 1 700. But with PGP on average selling higher priced homes than RE/MAX, the latest annualised turnover figures for both are believed to be around the R12bn mark.
Seeff Properties is SA’s third biggest agency, with 1 250 agents on its books and an estimated turnover of around R7,5bn. The next tier of real estate contenders, all believed to generate turnovers of roughly R3bn to R6bn, with an agent count of between 600 and 900, include Chas Everitt International, Lew Geffen Sotheby’s International, Rawson Property Group and Harcourts Africa (formerly Homenet).
Rawson and Harcourts, in particular, have notched up impressive growth in their respective footprints over the past few years. Rawson, under the helm of Western Cape property doyenne Bill Rawson, has made strong inroads in the R600 000 to R1,8m market, growing its agent numbers fourfold since 2005: from 250 mostly Western Cape-based agents to 924 countrywide. Management maintains sales turnover was up 70% last year alone.
When Homenet began the conversion to Harcourts three years ago the group had 84 offices and fewer than 500 agents. The group now comprises 130 offices and 625 agents, with another 10 new branches currently in the pipeline.
Relatively new kid on the block – Leapfrog Property Group – has taken away market share from its more established peers. The company, with prominent black empowerment credentials, was founded by industry veteran and former CEO of the PA Group Jan le Roux early in 2007, at the height of the boom.
Le Roux soon persuaded a number of industry heavyweights to join him, including the likes of ex-RE/MAX CEO Bruce Swain, Kura Chihota, at the time a well-known face in commercial property circles, and more recently Ronald Ennik, who used to be PGP’s MD in Gauteng. Mid-2007 Leapfrog had eight branches and 50 agents. It has since swelled to 50 branches and 350 agents.
But the party came to an abrupt end early in 2008, when the sub-prime crisis and global recession hit home. The boom quickly turned to bust and within 12 months housing sales had halved. Figures from property research group Lightstone show the number of residential property transactions slumped from around 16 000 in April 2008 to less than 9 000 in April 2009.
A staggering 50 000 estate agents have since left the industry. But the 30 000 or so estate agents still trying to eke out a living in a market where sales volumes remain 40% below 2007 peaks have over recent months been bombarded with a myriad other challenges. In fact, lacklustre housing demand now seems to be the least of beleaguered estate agents’ problems.
The Wendy Machanik trust fund scandal, subsequent allegations of irregularities at other estate agencies, the acrimonious sacking of Nomonde Mapetla, former CEO of the Estate Agency Affairs Board (EAAB) and the fidelity fund certificate mess she apparently left behind, have plunged SA’s residential real estate industry into turmoil.
Concern about the impact of the new Consumer Protection Act (CPA), proposed new labour relations legislation, onerous new entry qualification requirements and ongoing pressure to transform are adding to the industry’s woes and could prompt a further haemorrhaging of estate agents over coming months.
“The industry is suffering from a huge self-esteem crisis,’’ says Ronald Ennik, a director at Leapfrog Property Group. Ennik says the current state of affairs was first triggered last year when friction between the sectoral education and training authority (Seta) and the EAAB emerged regarding the introduction of new real estate qualification standards. “That created a lot of confusion among both estate agents and consumers.”
Then the Wendy Machanik debacle broke, which has raised suspicions that more alleged fraud and corruption among estate agents are waiting to be discovered. The in-fighting among EAAB board members and perceptions that the board has lost its power as a regulatory authority have further eroded confidence.
Allegations that thousands of estate agents are practising illegally without the required fidelity fund certificates have added more fuel to the fire. Says Ennik: “Collectively, those issues have seriously dented the industry’s credibility and reputation and have alienated the public from estate agents.”
Pam Golding Properties Group CE and Institute of Estate Agents of SA (IEASA) president Andrew Golding says it’s unfortunate the Wendy Machanik scandal and Mapetla dismissal coincided, as this has created the impression in the media the entire profession is corrupt. “The perception is the industry now requires a widespread clean-up. But in reality, confirmed cases of irregularities have been few and far between.”
Berry Everitt, MD of the Chas Everitt International property group, echoes a similar sentiment. “The fact that the EAAB is in total disarray doesn’t mean the whole real estate industry is falling apart.” For example, Everitt says nobody would suggest that if the Financial Services Board collapsed it would automatically spell poor corporate governance at all insurance companies. “The truth of the matter is that – despite woefully poor leadership by the EAAB for several years – the huge majority of estate agencies and agents are trading legally and above reproach.”
Everitt says most of those agents without fidelity fund certificates have paid their registration fees and spent much time and effort trying to obtain those from the EAAB.
What’s particularly frustrating, says Rawson Properties’ northern region and business development director Sean McCauley, is reputable agents have worked hard over the past few years to rid the industry of its “unscrupulous” label. But that’s all come undone. McCauley says suddenly buyers are uncomfortable to hand over cash deposits. “Someone buying a house for R1m needs to provide a cheque for R100 000 to the estate agent handling the sale and they’re wondering if their money is safe. But who can blame them under the current circumstances?”
Industry players say that apart from trust fund fraud and mismanagement accusations, estate agents also have to deal with a host of new legislative issues, forcing the industry to re-educate itself and re-align business practices.
Seeff Properties chairman Samuel Seeff says the introduction in mid-2007 of the National Credit Act (NCA) in itself was a massive piece of legislation that significantly altered the way estate agents operate. More recently, the industry has had to come to terms with the Consumer Protection Act (CPA).
Still more changes will be introduced under Nedlac, via SA’s new Labour Relations Act, the new Property Transactions Bill – supposed to replace the Estate Agency Affairs Act – and the Property Transformation Charter currently being introduced. Seeff says in addition the NQF level four and five qualification standards that come into play from next year will significantly raise the entry barrier to new estate agents.
Existing estate agents registered with the EAAB before July 2008 are also obliged to obtain the NQF4 or NQF5 qualifications through the Recognition of Prior Learning (RPL) route. Seeff says the latter entails a compilation of a comprehensive portfolio of evidence to prove you have the necessary skills and experience to operate as an estate agent.
Although legislative changes, coupled with the new qualification standards, will no doubt help raise levels of professionalism and improve the image of the industry among consumers, Seeff says it could also prompt more agents to leave the industry. That’s particularly true for older agents who simply don’t have the inclination to comply with the introduction of the new legislation and requirements.
Industry players are obviously keen to re-establish credibility and confidence as quickly as possible. The question is how best to go about it. Most estate agents welcome the EAAB’s recent announcement of a three-month amnesty period. The latter gives estate agents until 15 July to disclose any possible contraventions of the Estate Agency Affairs Act.
But Golding for one would like to see the EAAB take more decisive steps to help restore the good name of reputable agents. “The majority of estate agents aren’t dipping into trust fund accounts and the best way to prove that is for the EAAB to proceed with the forensic inspections of all estate agencies, as it initially intended doing.”
Golding says the industry would also welcome a closer working relationship with the EAAB, something that’s been sadly lacking over the past few years.
Rawson’s McCauley agrees the EAAB’s “closed door policy” will no longer suffice. “Real estate agents and their regulatory body should start working together on finding ways to improve the industry’s credibility among consumers.” McCauley says Wendy Machanik’s fall from grace has exposed a huge weakness on the corporate governance front within the residential real estate industry, an issue that needs to be addressed jointly by the industry and the EAAB.
McCauley argues the EAAB could also affect amendments to the Estate Agency Affairs Act in terms of trust fund account requirements. The Act stipulates every estate agency must have a trust fund account, irrespective of whether they use it or not. “There’s no reason why any estate agent should keep money on behalf of homebuyers,’’ says McCauley. For example, the Rawson group’s policy has for the past three years been to hand over all deposits directly to their attorneys.
A key concern for Ennik is the lack of funds to help mend the industry’s tarnished image. Although the IEASA looks after the interests of estate agents, Ennik says many don’t pay membership fees to the industry body. That means there’s a shortage of funds to promote the interest of estate agents. “We need to re-establish the industry as a respectable career choice. But how do we lure young, rising talent without a well-funded marketing campaign?”
Seeff believes consolidation among real estate agencies is the way to go, as the market is overtraded. “Our industry is still highly fragmented. Margins have become very thin while everyone’s cost base has risen. It would help create a more stable market place if we could see fewer but bigger players emerge.”
However, in an industry dominated by family-owned brands, consolidation is easier said than done. Seeff concedes it’s a difficult conundrum, as those who have built up family businesses over decades are loath to see their personal brand history effectively being wiped out.
Meanwhile, Seeff says it’s possible the industry will lose another 10% to 15% of registered agents (between 3 000 and 4 500), particularly if housing activity remains in the doldrums over the next six to 12 months. The latter seems a likely scenario, judging by the latest data emerging from banks, which paint a rather bleak outlook for SA’s residential property market. In fact, latest housing data suggest house prices will drop again this year, mirroring the market’s 2009 performance, when they dipped in nominal terms for the first time in more than 20 years. That despite interest rates now being at their lowest level in 35 years.
FNB property strategist John Loos expects an average decline of 1,2% for this year as a whole but warns there’s some downside risk to that forecast, given the potential negative knock-on effect the political unrest in the Middle East could have on oil prices, inflation and interest rates.
Property economist Erwin Rode is equally bearish, saying house prices are likely to continue to contract in real terms until 2015. Industry players blame stubbornly high levels of household debt, an uncertain labour market, banks’ still-high deposit requirements and an oversupply of sales stock for the housing market’s weak performance.
Sharp increases in electricity tariffs, municipal rates and taxes, as well as food and fuel prices, are other factors bound to keep home buying decisions on the backburner for the time being.
However, one thing is certain: those estate agents who survive the current fallout and manage to stay the distance will reap the benefits when the housing market turns. And there’s no doubt it eventually will.
SALES ACTIVITY
How estate agents’ fortunes have changed
HOUSING ACTIVITY may well have recovered somewhat last year after hitting rock-bottom in 2009. However, the total value of sales was still down a substantial 37% from 2007 peaks. Figures from Knowledge Factory’s South African Property Transfer Guide (SAPTG) show residential property sales worth R150bn were registered at the Deeds Office last year against the R238bn registered in 2007 (see bar chart). This includes all sectional title and freehold properties priced up to R10m. Sales were down an equally hefty 41% over the same timeframe.
Assuming 80% of all housing transactions were conducted through an estate agent at an average commission rate of 5% (excluding VAT) we can deduce sales commissions generated by estate agents slumped from around R9,52bn in 2007 to R6bn last year, which means a massive R3,52bn was wiped off the industry’s potential income in three years.
The fact that it takes so much longer to sell a house than it once did is further eroding estate agents’ monthly take-home pay. FNB figures show the time it takes to sell the average house rose to close on five months (134 days) in first quarter 2011. During the boom years, estate agents took an average of two months to seal a deal.
In addition, sales commission levels have come under pressure, as competition to secure sole mandates continues to mount. Seeff Properties chairman Samuel Seeff says there’s no doubt tough market conditions have forced commissions down from an average of 7% (excluding VAT) during the boom times to a current 5% average. Seeff says the trend may still be downward, with further cuts in commission levels a possibility.
Industry players say, turnover aside, the profitability of different real estate groups, individual franchise/licence holders and agents will depend on the way their business models are structured. Most groups are either franchise- or licence-based, branch-owned or a mix of both. With those traditional models, agents usually share their commissions on a 50:50 split with franchise branch owners. Franchise/licence owners usually pay the annual fee (usually a fixed percentage of turnover) to the group.
RE/MAX is an exception. Its agents get to keep a large portion of their commissions earned, but unlike the traditional model have to foot the bill for overheads and marketing themselves.
Be that as it may, at the height of the property boom top agents operating under the major real estate banners could easily sell five homes a month and earn a gross sales commission of up to R3m/year. Back then, the average agent reportedly earned R20 000 to R30 000/month in commission. Today, Rawson Property Group director Sean McCauley says the average estate agent takes home no more than R5 000/month.
INDUSTRY PLAYERS
Who’s who in SA real estate
WHILE MANY of the smaller brands and one-man shows have fallen by the wayside during what’s arguably been the toughest three years ever experienced in the South African housing market, some industry players have actually cashed in on the downturn.
In fact, the brands that have survived the fallout are vying more aggressively than ever for a slice of the property pie. The market has become so competitive few real estate groups are currently prepared to divulge their turnover figures.
But when performance data is made available, competitors are quick to dispute each other’s claims. As one industry player puts it: “Believe me, everyone is significantly down over the past three years yet most are talking their book up. So it’s difficult to get a true market comparison.”
Nevertheless, while industry players continue to jostle for position it appears rivals Pam Golding Properties (PGP) and RE/MAX have retained their dominance as the industry’s two big guns – both in terms of staff numbers and sales turnover. PGP currently has around 1 500 agents on its books, while RE/MAX is slightly ahead with 1 700. But with PGP on average selling higher priced homes than RE/MAX, the latest annualised turnover figures for both are believed to be around the R12bn mark.
Seeff Properties is SA’s third biggest agency, with 1 250 agents on its books and an estimated turnover of around R7,5bn. The next tier of real estate contenders, all believed to generate turnovers of roughly R3bn to R6bn, with an agent count of between 600 and 900, include Chas Everitt International, Lew Geffen Sotheby’s International, Rawson Property Group and Harcourts Africa (formerly Homenet).
Rawson and Harcourts, in particular, have notched up impressive growth in their respective footprints over the past few years. Rawson, under the helm of Western Cape property doyenne Bill Rawson, has made strong inroads in the R600 000 to R1,8m market, growing its agent numbers fourfold since 2005: from 250 mostly Western Cape-based agents to 924 countrywide. Management maintains sales turnover was up 70% last year alone.
When Homenet began the conversion to Harcourts three years ago the group had 84 offices and fewer than 500 agents. The group now comprises 130 offices and 625 agents, with another 10 new branches currently in the pipeline.
Relatively new kid on the block – Leapfrog Property Group – has taken away market share from its more established peers. The company, with prominent black empowerment credentials, was founded by industry veteran and former CEO of the PA Group Jan le Roux early in 2007, at the height of the boom.
Le Roux soon persuaded a number of industry heavyweights to join him, including the likes of ex-RE/MAX CEO Bruce Swain, Kura Chihota, at the time a well-known face in commercial property circles, and more recently Ronald Ennik, who used to be PGP’s MD in Gauteng. Mid-2007 Leapfrog had eight branches and 50 agents. It has since swelled to 50 branches and 350 agents.
