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- Mamodupi Mohlala announced plans to introduce programmes to provide support for black professionals and firms in the sector with funding and mentorship.
- National Property Practitioners' Council CEO Joseph Sakoneka said much of even government's major property business went to established players.
- Experts said while the hard lockdown of 2020 weighed down on the sector, it was on its way to a solid recovery.
The CEO of SA's Estate Agencies Affairs Board (EAAB), Mamodupi Mohlala, says the body is in the process of investigating allegations of racism in the property sector, amid reports of aspiring tenants being denied access to accommodation for rent on the basis of their race.
Mohlala was speaking during the first day of the Real Estate Industry Summit, which is set to continue on Friday.
The summit seeks to discuss the challenges the sector has faced in recent years, including the Covid-19 pandemic, changes in household finance data, and transformation.
The summit also comes as word of Cape Town resident Pol Osei being rejected by a "race-specific" landlord caused a national outcry. Osei, 26, took to Twitter to post a screenshot of the conversation in which he was told he would not be considered because of his race.
The agent in the case, Gabriella Johnson, issued a public apology and Live Real Estate CEO Brendan Miller announced that the group terminated the contract of the landlord and that Johnson would be suspended.
While she did not make direct reference to the specific incident that the EAAB would investigate, Mohlala told attendants at the Real Estate Industry Summit that the investigation would be comprehensive and assess the prevalence of discrimination in the sector at large.
"We are investigating an incident around allegations of racism in the sector. We know that that has serious implications for tenants' rights. We have an individual who says he was denied access to a property as a tenant because of his race and we are investigating that," said Mohlala.
Mohlale said the board also planned to introduce programmes to provide support for black professionals and firms in the sector with funding and mentorship, adding that shifts in the demographics of the buyer market needed to find expression in the industry itself.
"We will license SMMEs [small, medium and micro enterprises] and create incubation programmes for principals and introduce some exemptions from regulatory fees and make the environment conducive to black entrants," Mohlala said.
She added that the board was considering a public engagement with different parties which have been subjected to alleged racism with a mission to stop the practice and educate the public on the impact on people's rights.
"We have commissioned an investigation that is at its infancy. In the next week or so we will have a better picture on the ground. Our investigators are in Cape Town and speaking to practitioners about allegations of this practice. Even our own board members have been victims of this practice," she said.
Mohlala said racism or discrimination in any industry was contrary to economic growth and that anyone in the sector who sought to discriminate against black South Africans was "clearly interrupting the economic growth of the market".
"It also indirectly has a detrimental effect on black practitioners, because if black people cannot buy, then black sellers cannot perform optimally either and this continues to limit them to specific areas in the sector," said Mohlala.
Transformation
She said the board also planned to hold a summit later in the year on transformation in the sector.
CEO of the National Property Practitioners Council Joseph Sakoneka said political will was required as government had a property portfolio, but much of the major business went to established players.
"It's one thing to get people to join the sector, but if you can't get them access, it will not achieve the results and they will eventually leave. If I go to an industry as a black startup and go to these high-end forums and I am asked to pay a higher fee, it will be impossible to get ahead," said Sakoneka.
Sakoneka said black entrants into the industry needed support because previously disadvantaged individuals in the industry tend to lack the capital needed to establish themselves.
"We need to make sure that there is meaningful transformation. As an advocacy group we will make sure that government and the industry focus on quality and not just quantity. Transformation is not a one-sided thing. We need trainers and that is what is lacking," Sakoneka said.
Pandemic shifts
Executive for business development at Private Property, Carl van den Burg, said the property sector underwent significant operational changes since the beginning of the Covid-19 pandemic, including the use of augmented reality and drone technology in property viewings.
"We need to look at examples in our lives. If you look at how our lives had changed in the last two years, you get an idea of how the industry has changed. We have seen that the real estate industry is realising that many digital things maximise efficiencies and help reach a bigger audience," said Van den Burg.
Van den Burg said as much as Covid-19 has been devastating the world over, it has catapulted the industry into the future and that the face of the typical property consumer has changed rapidly in a short space of time.
"We have 60 million people in South Africa and all of them have a need to understand property ownership. We have seen a massive shift away from engaging in traditional means by looking at newspapers and magazines. Now much of the engagement is on social media."
Lockdowns and Zoom Towns
TPN Credit Bureau CEO Michelle Dickson said because of the impact of the Covid-19 national lockdown on jobs and buying power last year, the property market saw a significant drop, but that it has started to recover, although vacancy rates and properties remained high.
"We expected to see the numbers drop. They didn't drop as badly as the global financial crisis. The number of tenants in good standing is back to before the lockdown. What hasn't quite recovered is the vacancy rate. We had a high vacancy rate 13.3% at its worst. We are getting back to 10% and improving," said Dickson.
Dickson said TPN's data helped to benchmarks property investor portfolios against the area where they have invested and that this would be a critical component of the sector's ongoing recovery.
"I assume that the rates in different geographical areas for square centimetres for rent. In the Western Cape we have a high value of rent per square metre. In terms of good standing, it has always been the province that performs best. At Gauteng we are still sitting at 76%," she said.
Dickson said in the height of the lockdown property investors have been offering benefits like free water and electricity for the first months or free Wi-Fi as an incentive to tenants.
"There is an exit of existing micro-investors on buy to let. Everyone with more than three properties in the portfolio is exiting buy to let. What is driving this? It's being driven by our funds. We have listed and unlisted funds coming in and building office to residential conversions," she said.
Dickson said other innovations in property development hastened by the rise of remote working including "Zoom towns", a phenomenon where residential properties were fattened with amenities which made working from home easier.
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