Crunch time for estate agencies

Although property selling prices in many areas have increased, in some cases setting new records and prompting an outpouring of positive sentiment from the property industry, the consequences of the current stock shortage should not be underestimated, says Mike Greeff, chief executive of Greeff Properties, an affiliate of Christie’s International Real Estate.

“A decrease in stock means a decrease in turnover, which is a threat to the future health of the industry,” says Greeff.

“If the current stock shortage continues, we are likely to see a significant reduction in active estate agents and indeed in agencies. It will be the truly skilled and experienced agents who have weathered the recession and ridden the roller coaster of the housing market without being tipped out, who are likely to make it through the upcoming challenge.

“Agents coming into the market hoping to make a quick killing, and then opt out, are likely to be disappointed. This industry is for agents with the stamina for the long haul, who are focused on building long-standing professional relationships based on trust to ensure referrals and repeat business.”

He says agency principals need to shift their goal posts too.

“When it comes to sellers’ expectations, versatility is key, and the trump card is added value,” says Greeff.

“Service needs to be head and shoulders above that of the competitors, and very few businesses can afford to ignore tangible rewards in the current commercial environment. We have launched an incentive to pay back a percentage of agency commission to sellers in Pick ‘n Pay Smart Shopper points.”

Greeff believes 2015 is going to be an interesting year, starting with a small reprieve in the oil price. However, he says interest rate hikes are inevitable, and anyone wanting to enter the property market should ensure that they build some fat into their household budgets to absorb future inflationary shocks, so every little bit counts.

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