Twenty-seven years into democracy, the property sector sticks out as one of the least transformed segments of our economy. Its numbers paint a picture of a stubbornly white-dominated industry.
Estate Agency Affairs Board (EAAB) data indicates that we have just over 41,000 registered estate agents, of which just over 20,500 are established agents and 20,858 are interns. Of the established agents in 2020, there are only 999 black principal agents, compared with 6,836 white. Of the full-status agents 10,784 are white and 1,445 are black. These numbers translate to a mere 12% black representation in a country where blacks make up 90% of the population. Of the 20,858 intern agents, 13,409 are white and 7,449 are black.
Analysis of the data paints a stark picture of how much progress SA must still make to achieve racial equality. This lack of transformation occurs in the context of 2020 data from the credit bureau TPN, which found that black women in their mid-20s and early 30s are driving the property investment market in SA. It would appear then that the established players in the industry are willing to take money from black buyers but are finding it difficult to draw black people into the value chain.
The slow transformation process - from 4% black representation in 2007 to 12% in 2020 - therefore indicates a certain level of apathy towards transformation by the real estate industry. Earlier this year Tony Clarke, CEO of Real Estate Business Owners of SA (Rebosa), said in an interview with Business Times that the EAAB may be informed by a "perceived lack of transformation" in the industry.
The sector is dominated by significant players, and our black agents and agencies simply cannot compete in this environment
He was quoted as saying: "The regulator has never said 'we are not going to assist you because you are not transforming', but there is this ongoing accusatory attitude towards the industry."
DRAWING ATTENTION AWAY
While the EAAB has been open with the industry about challenges it faces in improving its systems, certain players like Rebosa have used these systemic issues to draw attention away from our transformation agenda rather than discuss and work with us to implement our proposed solutions to the impasse. To a large extent the industry is simply not creating a conducive environment to allow black players to grow into competitive and sustainable entities.
The sector is dominated by significant players, and our black agents and agencies simply cannot compete in this environment. They lack the cash flow to weather structural issues such as bond origination and home transfer lead times, as well as access to the more lucrative suburban residential and commercial property markets.
Many of the industry players recognise that transformation is non-negotiable and that the current patterns of participation are not sustainable, and they embrace transformation as one of the primary elements of a democratic, nonracial society. However, a stubborn bloc seeks to maintain the status quo. Their resistance fortifies our resolve to achieve our goal of a dynamic and representative industry.
It is simply non-negotiable to make it easier for persons from previously disadvantaged backgrounds to enter the predominantly white industry and we believe that the new Property Practitioners Act will now fast-track the transformation of the property sector.
Signed into law by President Cyril Ramaphosa in October 2019, it dictates that the EAAB - soon to be the Property Practitioners Regulatory Authority (PPRA) - must, among other things, set up a transformation fund that facilitates the accessibility of finance for property ownership, development and investment to aid historically disadvantaged people. It also gives the authority power to monitor and evaluate transformation progress in the sector and set up a property transformation research centre.
The historic challenges continue to be a barrier for previously disadvantaged individuals (PDIs) wanting to enter the real estate market, and we need the industry to join us, not fight us.
While we look at assistance measures such as exemptions from all regulatory fee requirements, including for fidelity fund certificates, financial audits and mandatory education and training fees, we want the industry to show us progress in its efforts to transform.
MULTUPRONGED STRATEGY
The good news is that these challenges, although concerning, are not insurmountable. The EAAB has set out a multipronged strategy to turn the situation around. Working with industry players and the government, we are determined to write a completely new story about the industry. We want to change it so that it reflects not only the current demographics of SA but becomes a beacon of hope for future generations.
- In the coming years we are determined to:
- Increase the number of black property practitioners;
- Increase levels of participation and representation among youth, women and people with disabilities within the property and real estate sector; and
- Mitigate high levels of poverty, inequality and unemployment and promote and improve the employment prospects of PDIs.
On the one hand, our policy approach relies on the Property Practitioners Act to achieve our goals. On the other, we have a myriad of activities to get new players on board.
While the EAAB has been open with the industry about challenges it faces in improving its systems, certain players like Rebosa have used these systemic issues to draw attention away from our transformation agenda rather than discuss and work with us to implement our proposed solutions to the impasse
Our work is not isolated from the broader national vision to create an equal society. Some industries have done well in transforming themselves, as reflected by their players and employees' diversity. We need to look beyond the employee and participants' numbers in measuring transformation. We must factor in the incredible spend across the property sector, so that we can use it to achieve meaningful transformation.
We have scored some important victories recently, although these come off a low base. For example, more than 1,400 black participants have secured internships in the industry through our "One Learner, One Estate Agency" programme. These are positions that were previously impenetrable to a previously disadvantaged population. The thousands of estate agents in SA could all be part of the solution.
AMNESTY PROGRAMME
The second and very fundamental victory is the "Amnesty for Black Estate Agents" programme that we have been able to implement despite opposition from the likes of AfriForum. We have provided exemptions to close to 200 black estates agents for a period of five years - this after the programme had stalled for more than three years. This means that all those who are blocked for non-compliance with regulatory requirements and all black estate agents who are struggling financially can approach the EAAB as part of the amnesty programme in line with the PDI resolution to be exempt from payment of all regulatory fees and costs.
We have also seen a 20% increase in the number of women who are full-status agents during the 2019/2020 financial year. We have provided several incentives for the industry and other participants who do business with the industry through our procurement guides. We are seeing increased participation by historically disadvantaged entities in the property sector.
Despite these successes, there is still a long way to go. In the coming years we will provide opportunities for new entrants to the real estate sector, and allow them to gain meaningful work experience and build a pool of highly skilled and trusted intermediaries in the form of property practitioners. At the same time, we will implement a skills development programme targeting unemployed youth and previously disadvantaged individuals, promote self-employment and improve the delivery of real estate services.
The work we are pursuing is hard and will take time. But nothing encourages us more than the smiles etched on the faces of new participants, especially the hundreds of black interns, who have been able to set foot in places where generations before them were prohibited.
• Mohlala is CEO of the EAAB
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