Billionaire Patrice Motsepe has NOT bought 30% of the Pam Golding Property group
The rumour mill continues to turn in the residential property market. Last night we received a tip off that the Pam Golding Property group had sold a 30% stake of its business to South African billionaire, Patrice Motsepe or his African Rainbow Capital company.
HomeTimes can confirm that this is false, according to CE Andrew Golding. “Pam Golding Properties remains 100% family-owned and no stake has been sold to anyone,” he told HomeTimes.
Just last month, the Pam Golding Property group announced that it had purchased fixed-fee, online estate agency Eazi.com following a tip off HomeTimes received.
The 42-year-old family-owned business is the first South African real estate franchise group to actively embrace a new-tech agency platform, and has come under some flack from outsiders who believe that by purchasing an online agency which fixes its commission, that it will be directly competing with its franchise owners and agents selling in the percentage-based commission structure.
CE Andrew Golding said that the company needs to “keep a close watch on global real estate industry trends and it seems that internationally, residential real estate sales industries and businesses are being reorganised across at least two different and separate types of business models and customer offerings in specific market segments”.
“The first of these is the traditional high ‘touch’, high service, agent/client relationship model which is the cornerstone of the Pam Golding Property group and which will continue to be our core offering; but secondly, over the past two years, we have been following the advance of the online ‘hybrid’ estate agency model, which is a digital offering plus minimal agent ‘handholding’,” he said. “From a South African perspective, while in no way detracting from the personal and professional service and high agent involvement of our existing Pam Golding Properties offering, we believe this investment into Eazi.com broadens the group’s access to the South African and African residential property sector by enabling us to take an interest in the high-volume segment of the market, which comprises over 100,000 transactions annually in South Africa alone.
“This is particularly relevant in the price segments between R500,000 and R2m, to which the Pam Golding Property group has traditionally had limited exposure to date.”
The market has, however, questioned the logic in this move, saying that the high-end, sophisticated segment of the market may opt to pay a fixed commission of R29,500 (plus VAT), over a percentage-based fee of between 5% and 7%.
The maths is simple. A fixed fee of R29,500 (plus VAT ) – or R33,925 – benefits properties priced from R600,000 and up more than those priced R599,999 and below.
At 5% commission, a R600,000 sale equals R30,000 (ex VAT) to the real estate agent; while a R2m sale would amount to R100,000 (ex VAT) at 5% commission.
Even a seller who sells their home for R500,000 would pay R25,000 (ex VAT) at 5% commission, or R35,000 (ex VAT) at 7% commission.
Buyers in the R1m and higher price categories are also assumed to be more tech savvy and may be better able to navigate the online agency waters. Still, it is early days and we will have to adopt a wait-and-see approach to what exactly the impact will be on the PGP business model.
HomeTimes has extended an invitation to Golding to participate in a Live online interview and continues to await his availability.