What goes down invariably goes up, eventually, according to Neville Berkowitz, founder of HomeBid and a property economist for over 40 years.
“When I came up with the concept for HomeBid as a low commission estate agency in January 2014 it was based on taking a five-year view of the South African economy and the resulting prospects for the property industry,” says Berkowitz. “Having seen a virtual no growth economy until 2019 and a general Election in that year too, I expected that the 93% economically active South Africans who are employees would see minimal, if any, remuneration increases while inflation was expected to be around 5-7% annually. This would have the effect of most South African homeowners’ and wannabee homeowners’ real wealth, that’s after inflation, reducing as annual home prices were likely to be below the inflation rate.”
“The one thing that these homeowners could do was to save meaningfully on traditional estate agency commissions of 5%- 8.5% plus Vat should they decide to sell or buy a home if they used HomeBid as a low commission estate agency at 1.95% plus Vat. With this saving of some R65,000 per R1m of the value of their home in estate agency commission, they could fight back and put money into their pockets that otherwise would have gone to some “fatcat” estate agency.”
“Like any new business and especially one pioneering a new concept we made some personnel mistakes which we have now corrected. Most people entering the low commission estate agency business believe that technology will replace people but the trained, experienced estate agent is integral to the success of HomeBid,” says Cavan Sheahan, GM of HomeBid.
“The HomeBid listing agents working alongside their sales agents secured over 80 sole mandates at 1.95% plus Vat in January 2018, and each trained and experienced sales agent averages between 11 – 14 sales a month. This has been the pattern for the past six months, obviously excluding a slower December month,” tells Sheahan.
What about the “up” part?
In a HomeTimes article in August 2017, Berkowitz correctly predicted that Cyril Ramaphosa will win the leadership of the ANC and become the next likely President of South Africa. Berkowitz expected that this would boost confidence and that, if sustained, this will filter through to home prices in due course. The improving rand/dollar exchange rate is evidence of this improving sentiment locally and globally.
Berkowitz (65), now semi-retired and living in Mauritius, was back in Johannesburg recently and could feel the palpable “feel-good” confidence on the street and in all his conversations with people of all walks of life.
“South Africans are placing a lot of hope and positive expectations on Cyril Ramaphosa to get things right. This will not be an easy task but having positive South Africans behind him will make it easier to do,” says Berkowitz. “If Cyril Ramaphosa can pull this rabbit out of the hat, all South Africans will see an improvement in their incomes and rising home prices will result as confidence returns after such a long absence for homeowners. Please understand that this will take a while to achieve and may only be evident by 2020.”
This feature was sponsored by HomeBid