FNB Home Buying Estate Agent Survey by Segment
FNB - South Africa FNB Estate Agent Survey by Segment suggests that the “lower priced” market segments looked the healthiest in 2011
With another sluggish year likely for residential property in South Africa, estate agencies are facing a challenging twelve months.
“As with 2011, property prices are just holding their own which impacts on agents’ commissions,” says Herschel Jawitz, CE of Jawitz Properties. “Unlike other industries where professional fees are charged, our commission doesn’t go up with inflation each year. The only ways our earnings increase is if property prices increase, or we sell more properties.”
If property prices only go up by two or three percent in 2012 then, in real terms, commission earnings will decline. “Added to this, costs are increasing by at least 10%, and the equation becomes interesting. Normally, if you are sacrificing margins you can try to make up the numbers with higher volumes but the numbers of sales for the most part are going to be flat year-on-year and in some areas may even decline.”
The economics are simple – fewer sales, flat prices, and homes taking longer to sell equates to estate agencies spending more money with less return.
Pity the poor conveyancer
The Guardian - UK
Dwindling fees, higher insurance premiums, a flat property market - but at least the public like their high street conveyancer
The legal element of buying a house is regarded as a necessary evil, the part that always slows the transaction down. This isn't necessarily true, of course. But conveyancing is proving to be just as much of a pain to the legal profession as it can be to the public.
Back in the 1960s conveyancing accounted for around half of the profession's income; now it is probably less than 10%, even though most legal practices in England and Wales register at least one dealing at the Land Registry each year. The recession is not the only thing to blame. Lawyers have not been slow to undercut each other and drive down fees, especially with a growing number of volume conveyancing operations that are able to process straightforward transactions in a systemised, low-cost manner.
The challenge of licensed conveyancers – a 1980s creation to break solicitors' monopoly – is also significant and indeed two firms of licensed conveyancers, MyHomeMove and Countrywide Property Lawyers, handle more transactions than any solicitors' practice. And the relatively recent practice of paying estate agents for referrals has eaten into profit margins, and conveyancers want the government to extend its proposed ban on referral fees in personal injury work to cover them as well.