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Weak economy in SA impacts estate agency commissions

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Weak economy in SA impacts estate agency commissions

Category Market Trends

The mid-month fuel price data released by the Central Energy Fund suggests that South African fuel users could be facing increases of 74 cents a litre for petrol and 81 cents for diesel. Some economists are predicting that the price of fuel in June will increase to its highest level ever.

The increasing popularity of online agents is putting pressure on the commissions of traditional agents, with more sellers looking at ways to reduce costs when selling their property.

This is according to David de Waal, CEO of Steeple, who says consumers are under pressure and “further fuel cost increases will do the man in the street no favours”.

“Our political climate has been far more stable since President Ramaphosa took over the helm, and consumer confidence is on the rise. However, continued increases in taxes to address fiscal budget shortfalls will have devastating effects on the economy.

“BMI Research released data in the final quarter of 2017 explaining that consumers are actively doing pre-shopping research either through broadsheets or online, and are comparing retailers’ offerings to seek out the best value before even leaving the house.”

He says this behaviour is also evident in the residential property market, where sellers are now going online to research ways in which they can reduce costs when selling their property.

Estate agency commission is the biggest cost associated with selling a home so ways in which this can be reduced are of particular interest to home owners, says De Waal. “Selling privately is one way of avoiding this cost altogether but it is not without its challenges. The other option is to use online estate agents, who will sell a home for a far lower commission than traditional estate agents.”

The increasing popularity of online agents is putting pressure on the commissions of traditional agents who have, up to now, not had any competition, he says. “In time, we would expect to see a narrowing of the big difference in commission between online agents and traditional agents and this can only be of benefit to the consumer.”

Author Property 24
Published 05 Jun 2018 / Views -
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