What does record prices at gated estates signal?

Christie’s-affiliated luxury homes marketer Ennik Estates has achieved  record sale prices at two top end gated residential estates in Gauteng – Cornwall Hill Estate in Irene, Pretoria (R22-million), and Waterstone Estate in Benmore Gardens, Sandton (R16-million).

“This was as a result of the free flow of market forces,” says Ronald Ennik, founder and CEO of Ennik Estates.

“Given that we delivered the sales as a ‘non-accredited’ estate agency, these transactions must surely send a strong message to estate Home Owners Associations (HOAs) that their widespread practice of agent ‘accreditation’ does not necessarily ensure best-price sales for their homeowner communities,” says Ennik.

“Most HOAs persist in charging estate agents accreditation fees – normally around R10 000 to R20 000 a year, but often significantly higher – for the privilege of marketing homes in their estates.

“No matter how it is packaged – as a straight fee, a sales levy, or enshrined in title deeds – accreditation obstructs the forces of the free market and could impact negatively on homeowners’ return on the  capital investment in their most precious assets, their homes,” says Ennik.

“At its worst, fee-generating accreditation barely differs from the national scourge of ‘tenderpreneurship’ – where what is paid off the playing field dictates what happens on it,” Ennik avers.

“It is a system that is past its ‘sell by’ date and should be reviewed by all the relevant authorities – including developers, HOAs, the Estate Agency Affairs Board, the Institute of Estates Agents, and even the Competition Commission,” he adds”

Sellers, buyers and agents compromised

While accreditation is clearly good for the HOA as a steady revenue source, says Ennik, it compromises the other players on the field:

the seller because he or she is effectively deprived of access to the best equipped or most appropriate agents and, therefore, the highest achievable sale price; and because certain buyers will be deliberately turned away from the estate by non-accredited agents

the buyer who is looking for a property through a non-accredited agent, because he or she will not be shown options in the estate that will fit his or her needs, and

the estate agent community, including the HOA-accredited agent, who forks out big money for the privilege of marketing the estate; the other agents in the area who, on principle, will refuse to pay for the freedom to conduct their own business in a free market; and the many smaller estate agencies that simply cannot afford the price of accreditation on multiple estates in a region.

“Ennik Estates will always respect and obey HOA rules and regulations – as we did at Cornwall Hill and Waterstone estates, and continue to do elsewhere. But we will not pay an accreditation fee for the privilege of conducting business with estate home sellers who seek our skills and services,” says Ennik.

“HOAs and the home owners they represent have every right to ensure the integrity of the estates they manage and reside in. My only sticking point is that money should not change hands for accreditation,” he concludes.

Established just over a year ago, Ennik Estates is the exclusive affiliate in Gauteng of US$100-billion sales a year Christie’s International Real Estate (the global luxury property arm of the world’s largest and oldest fine art auction house).

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