| The June 8 interest rate hike - and the possibility of further increases in the next 12 months - is bound to further slow the property market. Only the best estate agencies and agents who are service - and skills-wise will be properly geared to survive, cautions PA Group CEO Rudi Botha, and convenor of the 2006 Nedbank Property Professional Awards.|
In the face of increasing consumerism, estate agents will need to upskill themselves consistently. Professionalism, sole mandates and attracting willing buyers will be the big differentiator, he told guests attending the July 22 awards ceremony in Cape Town.
On the other hand, he believes that estate agencies offering value to their agents by means of branding, training, and advertising, will retain them. Professional, skilled and ethical estate agents, in turn, add value to the buyer and the seller, To remain sustainable in any industry, you need to add value,” Botha stresses.
He believes that although new ‘rookies’ continue to enter the industry, the numbers of fly-by-nighters has dropped considerably. “Disclosure of monies earned, addressing black economic empowerment, and the up-skilling of previously disadvantaged estate agents will increasingly become more important.”
Botha also believes that although commission is likely to remain under pressure, the proven agent will always be able to negotiate a sustainable commission. “There has always been a direct link between service delivery and the amount of commission earned – and this should remain the case.”
After-sales support, which in many instances is still lacking in the industry, will also become increasingly important in order to maintain a satisfied client base.
On their part, providers of financial services, mortgage originators included, should show more innovation and provide a far bigger selection of innovative and competitive products if they want to stay ahead of the game, particularly in view of the introduction of foreign entrants to the South African market, Botha believes.
Consumers should also be wary of ‘over-the-top’ branding and marketing campaigns of new market entrants as it they may lack substance in terms of product and service.“Rather consult proven service providers who are familiar with local market needs.”
Botha believes mortgage originators have not only set the pace with innovative services and products, but have also spurred banks on to be more competitive on interest rates and to develop new products and services, e.g. longer term fixed bond rates as well as starter bonds for new home-owners.
“However, in terms of innovation and variation, SA is still greatly lagging. Australia, for instance, boasts a far bigger variation of the financial products currently available in SA.”
Botha believes that, in addition to Barclays, Standard Chartered and Virgin Money, more new entrants are likely to follow from abroad. American GE Capital has already secured an existing mortgage broker in Australia and continues to shop around, while Virgin Home Loans has also spread its wings to Australia.
“Renowned for their entrepreneurial and innovative approach to business,Virgin’s entry into the SA market will force local competitors to come up with more innovative financial solutions, all to the benefit of the consumer,” Botha stresses.
PA Group’s wholly owned mortgage originator, BetterBond, which has recently introduced various new financial products to assist consumers beyond acquiring home loans, is ideally positioned to rise to the challenge of new competitors from abroad.
“In anticipation of growing competition in the market, BetterBond’s consultants are highly skilled and trained on an ongoing basis to give the consumer the best possible advice amid increased competition. In addition the company is at the forefront with new products and services to serve the consumer as comprehensively as possible.”
Moreover, while originators assist consumers in getting a bond swiftly and hasslefree, the consumer pays them absolutely no fee, directly or indirectly. “How can consumers be paying a fee if the interest rates have improved significantly to their benefit over the past seven years?” he asks.
“Besides securing consumers significant discounts, mortgage originators also manage the whole process on their behalf – from completing application forms, collating supporting documents, writing motivations, to electronically submitting applications to banks. In addition, highly trained consultants motivate all home loans and keep clients informed until every deal is approved and registered,” he adds.