 Good evening and welcome to episode 350 of the private property podcast. I'm your host, if you're joining us for the first time, you have been missing out on incredible content and all things relating to property. We're on your screens every single weekday at 7pm. We're always in conversation with the property expert who helps us better navigate our property journey. We're counting down to episode 400, I think that's going to be December. So we're quite excited behind the scenes to put together a huge show for you. I think one is actually such a huge milestone, especially for the tail end of the year. So that's definitely something that you must watch out for at home. And all our regular viewers, welcome back, you know how we do it. Every single weekday you and I have an appointment. When you're watching us on Facebook, on YouTube or on Instagram, I will certainly want to hear from you. You can drop those green hearts down here below and sign the register this evening. And as usual, you know that we're running an incredible competition right here on the show where you send a chance of walking away with 500 rands in cash. And all you have to do is, of course, comment on that post that we have on our Facebook page. And you send a chance of walking away with 500 rands in cash. The only catch, you need to be watching us live. So when you call your name, you drop us a text in order to claim your prize. We currently have 500 rands in the money bag. Yesterday's winner did claim their price with the response or claimed that 1000 rands that was in the money bag. So this evening, we're going to be giving away 500 rands. And of course, I do hope that you're going to be watching and we're able to claim that money. It is a Tuesday, so you can look forward to Umbali Noggo bringing you the farming podcast later on this evening. And she's on your screens every Tuesdays and Thursdays with the farming podcast tackling all the things agriculture. I know that they're starting a really great gardening 101 series. So that's what you can look forward to. If you're like myself, you've got green fingers and you're already growing something in your garden and want some tips and tricks on better handling all things relating to your garden, then that is a show that you do not want to miss out on. And every Mondays and Fridays, Chad brings you the Who Shoppers show, where he takes us through incredible twers of exquisite properties that you can find on www.privateproperty.co.za. And on Wednesdays, Esther Klassen brings you the first time home buyers show, but she's always in conversation with people who not only walked that first time home buying journey, but have gone on to grow their property portfolios from strength to strength. Those are the great shows that you can look forward to every single weekday at 8 p.m. Make sure that you follow us across our social media platforms on Facebook, on Twitter, on Instagram, LinkedIn, but also of course on TikTok. You can follow myself at Zamantonga underscore K on Instagram as well as on Twitter. Now this evening, we're talking about something that we don't usually talk about on the show because we always look at different parts of what we're going to be exploring, but we rarely ever actually explore the big picture. And that is, of course, we're looking at ways to improve the property sector's value chain. And I think more often than not in the show, we deal with different parts of the value chain and helping you at home to even understand how you fit in as a consumer and some of the things you need to know and how you can better manage how you handle your property journey, depending on which player you are dealing with in the value chain. But we want to look at ways that we can improve the property value chain. I think far too often we hear about instances where there are certain issues and challenges in a sector. And of course, some of those issues and challenges are not broadly in the sector, but there are sometimes certain parts of the value chain. So I really want to get a better understanding of ways we can improve it. But before we even start there, we're going to explore what do we even mean by value chain? How does the property sector value chain look like? And also, what does inclusion and inequality look like in property sector value chain? And to help us get a big good sense of how we can go about doing this and really understanding, given how we as consumers fit in to the value chain, I'm joined this evening by Tessa Dooms, who is a director at just sort of consulting. Tessa, good evening. And thank you so much for joining us. Good evening, Zama. Good evening, everybody. Thank you for having me. I think, Tessa, I think a really great starting point when we look at a topic like this, before we even look at the granular details, is when we talk about the property sector value chain, what exactly are we referring to? Yeah, so we're talking about a wide range of players in the sector that enable people to either be buyers, sellers, renters, builders in the space. People who are deriving value from property are supported by a wide range of both institutional and in some cases, a fringe to the sector players who are trying to create enabling environments. Of course, enabling environments because they derive some value from the kind of support that they provide. But also because we recognize that the sector and a sector like property is much like the retail sector in the country where it's a staple. It's a staple. We forget that property is not a luxury. One of the basic human rights, for instance, is the right to shelter. And much of the way in which we construct our societies is around the need for property. So it's one of those things that's never going away in terms of its need. And it's something that is a fundamental part, both of our economic growth as a collective in the country on the continent, but also about the individual ways in which we love our lives economically, socially and otherwise. I think one of the key things with our conversation this evening, before we can even look at ways to improve the property sector's value chain, let's perhaps look at the factors that come into play that lead to a successful value chain. Because I think it's one thing to want to look at areas of improvement, key factors that certainly determine the success of the property value chain. Yeah, I think one of the things that the sector relies on is big stable institutions. And maybe in some ways it's too reliant on them. But if we think about, for instance, the financing sector, banks and institutions that have large quantities of money and are able to engage in ways that secure lending for people is really a big fundamental part of it. So you need some level of security. The second part of it is actually safety. And I think we forget often that both in terms of our financial safety, but even our physical safety is a requirement for the sector and this value chain to work is we need to have checks and balances all the way through a property journey to ensure that there is safety in many parts of the process. And I think finally, there's an element of relationships and trust. A lot of this sector's value chain is dependent on trusting people and building relationships with people. If you think about just the buying and selling of property, if you think about the building of property, we have many, many horror stories of people who have terrible experiences because of bad actors in the space selling things that they can't, hiding things when they do sell or buy or constructing things in ways that are unethical and harmful. And so I think those are some of the more generic markers. And then maybe I'll add to that just issues around knowledge and information. And one of the things about the sector that we do have to have a conversation about is who are the people who broke a knowledge in the space? Because many people come to the property space as consumers as a once or twice in a lifetime engagement. They don't come in as something that in an industry that they're going to engage with multiple times. So they don't have the learning arc that you might have with other industries that you engage with. And so in the short spurts that you are engaged with the industry, you need a lot of knowledge in order to make good decisions. And often there are brokers of that information and that knowledge. There are people who whom it is in their best interest for particularly consumers do not have as much knowledge as possible. And so knowledge is I think a key driver of success for the value chain, particularly for the customer experience. And you know, because I actually love that you mentioned that last bit around the key role that knowledge particularly for the consumer plays and that there are unfortunately certain stakeholders within the value chain who would much rather consumers at home don't know about because then it's easier for them to make the sale and certainly be able to extract whatever funds they were able or wanted to extract from people at home. And I think the other two things of course trust and relationship is something that always gets echoed throughout the show that property is not a solo thing. And often people who started off even from an investment perspective who started off doing it by themselves realize that there's a ceiling that you reach when you started off by yourself and when you really want to grow and scale, you have to at some point go at it with people. There's so many different people that you need to form relationships with as much as possible. I think speaking of that relationship, of course, the viewers at home are very used to the family that we have created here where they're able to get their daily dose of property knowledge and able, of course, to also certainly ask us various questions that can better enable them to make better property decisions. And I already see some of the love that we're seeing on our Facebook page from you at home, Andre Pitot, Oliver, Gavinda, Polina, Gossy, Justin, Bartman, Eye Tu, Maiki, so watching and Menzi Boutelesi saying that bond protection is a big value add in property value chain. And that is quite a big one. I think some people actually was in the meeting just today who don't know about bond cover and bond protection. And sometimes, and I think if anything, that's a sale opportunity for somebody that can they can explain it quite well. And it certainly has its benefits. And I think I want to find out from, you know, people at home, if we're in their property journey, did you have your issues with what did you struggle with along in your property journey, especially because you know that there are all these different steps, even when you are a tenant, you know, there are different steps before you even move into a place. And by the time you move out, and if you're looking to buy their various steps, if you're looking to sell, what have been some of the pressure points along your property journey? And perhaps who were some of the culprits that I'll say were the reason why you experienced that pressure point. I know that for many of us who are your home owners might say perhaps contractors are big pressure points. There's only some other thing that needs to be done. And I feel like everybody has a contractor for a story. So do share with us down below some of your experience with, you know, what have been the pressure points throughout your property journey. And Tessa, you know, speaking of the pressure points, what would you then say have been some of the challenges when it comes to the property sector's value chain that we're still currently facing? Because I think it's there. So I think like challenges are just the moving part. What would you say are some of the key challenges that the sector faces? Yeah, I would say for me one of the biggest challenges is financing. And for two reasons. One is that there seems to be a limited market for financing. And two, it's a very opaque process. You don't really understand, for instance, what the vetting process actually looks like and how you present yourself to a financier, what works in your favor and what doesn't. People kind of blindly just produce documentation, loads of documentation, and then hope for the best. But there's not really a clear explanation about, for instance, if you're unsuccessful. What are the things that made you unsuccessful? And what are the things that could make you unsuccessful? I remember in my own just most recent property experience when I was selling a home and buying, looking to buy a new one. A year before I actually made the decision, I thought, let me be a proactive consumer, let me call the bank, let me find out what my status is. And no one was able to help me even just think through conceptually what would make me a good prospective client of the bank or what wouldn't. It was just an inability for the banking system to have people on hand to explain those kinds of things unless and until I was ready to present paperwork and I was ready to get into the process. But you also don't want to get into the process not knowing what your status is. You don't want to get into the process and then be unsuccessful. But besides just the narrowness of the profit and the opaqueness, I think that there is a growing need for more people in the space and more players in the space. So we've seen, for instance, a proliferation of what I call mortgage enablers. And this is for both buying and building. But a lot of the mortgage enablers are really not providing as much value into the finance sector. They're more giving us just here are the comparisons so that you don't have to do the comparative work yourself. And while that's a nice to have, again, it doesn't give you as much information. If we think about some platforms that are now becoming home loan specialists, so you think there are some financial institutions that are becoming home loan specialists, particularly because they're trying to address this thing about it being such an opaque space and trying to provide more information. But where the real innovation lies, I think, is in financiers that are looking to help people invest, that are not just looking to give people money and then don't care what you do with that money afterwards, as long as you pay your bond. But they're actually thinking about how do we ensure that the person that we're giving money to is able to use this as a live investment. So there are players that are coming up in, for instance, in township and rural areas that are helping with the building of back rooms, the building of low cost accommodation, micro developments. And they analyze so many opportunities to help people invest with that money, rather than just have a relationship that says, if we give you money, we hope that you give us back. And what happens with your journey is irrelevant to us. Then, of course, you spoke about contractors and can talk about the property developer as part of that contract chain. And I mean, recently we've seen the blight debacle that's come up, where developers are not just people building buildings. Developers are thinking through a very long lead into that value chain and how they might be able to profit off that value chain for a long time in. So your developer is not just the passive person who builds the building and walks away. They are actually part of, especially if you're buying, for instance, in an estate or if it's commercial property, that developer is actually part of that journey for the long haul. And you need to understand what your relationship is with the developer you don't actually get to see. The people who actually construct and the whole construction industry, there are so many issues around that industry, around accountability, around price, around regulation. And again, there are ways in which that can go very wrong, but also ways in which that is a gate kept sector when it comes to particularly bigger developments. And then the final thing that I wanted to highlight is maintenance. The maintenance industry in the property sector is really important. Those contractors that you're going to have to deal with regularly. And I would say in the sector, they're probably the people who get the least attention because we, as people who invest in property or own property, we hope we never have to see them. But that's A by D. And so as a country, I think we're missing out on opportunity and investing in that sector and making sure that people who are operating in that sector, particularly people who are operating in the lower end of the market, are able to get the right kind of qualifications, get the right kind of vetting. These are people who we are paying money, letting into our homes. And they're doing things that we really kind of test for when the electrician comes in and he says to you, oh, sissy, it's going to cost you 10,000 rand because there's these three things in those five places, you can't even interpret what he's saying. It's not like you can say yes or no. And it's going to cost you more money to get a second opinion. So there's an opportunity in that sector again, to regularize it, but also to make it a lot easier to navigate. So those are some of the things that I think are outside of the traditional thought about the agent, the buyer, the seller, the landlord, the tenant. And I think we're going to explore more of that. I want us to take a quick break and when we come back, we'll be seeing more of your questions and comments. Warnick, go to a quick break. See who the potential lucky winner of that 500 rand that is in the cash. So that they're able to claim that cash before the show is. Let's see who this evening's lucky winner is. Evening's lucky winner of that 500 rand in cash that is in the money bag. If you are indeed watching us, make sure that you drop us a message down here below in order to claim your price. So innocent appeal that cash is up for grabs and it's all yours. I want to see if you are indeed watching us this evening and talking about people watching us this evening, I see we've got a new member in the family. So we're talking on Facebook saying, hello, everyone. It's my first time here. Let's give you so great, you know, private property family welcome. I know that many people absolutely love embracing new members of the family. So we do hope that you're going to enjoy your stay with us. We're here every single evening at 7pm tackling various property issues. And I think one of the big things of course this evening that we are tackling is the ways to improve the property sector value chain and really getting a good sense of some of the different players, some of the bottlenecks within the value chain. And then how do we go about slowly improving them? And I'm joined by Tessa Dooms who's a director at Jassaro Consulting. And, you know, think before the break, Tessa, we, you know, we covered so well the various players and the opportunities to not just better them but also better the end product that we as consumers get. Because I think we all already know that fundamentally almost every stage, regardless of which, you know, sector you're in, there is a service that's being provided. But we're almost sometimes not looking at property from a holistic perspective and being able to work that journey with a consumer and saying, how can we make different steps of your property journey as best as possible or certainly as easy and pain-free as possible? When we then, you know, sort of change gears a bit, so getting a good sense of what the challenges are, how can we then go about making those improvements and making sure that, you know, things are slightly more efficient within the value chain holistically? Yeah, I'm going to mention too, and I'm going to start with one that is a bit more top of mind for everyone. And that's the question of relationships within the sector. A lot of times what gives us comfort as consumers in the sector is referrals. The idea that the first person who we have contact with, for instance, the bank, is the one that helps us and refers us to a next player in the step or the estate agent becomes the next person who refers us to somebody else. And that gives us comfort. And I'd like to call that cold comfort. It's cold comfort because your experience is very limited. And a lot of what's happening in the sector is that relationships are based on proximity, they're based on status, they're based on a lot of things that may not be quality. And so we do need a lot more of kind of objective arbiters and ways that the consumer can become part of the vetting process for who they're dealing with and who they're engaging with. So when you're thinking about who your attorneys are going to be, right now, most people get given attorneys, get stuck with attorneys without having any choice, any way of vetting that, because there's a relationship between the real estate company and that particular firm. That relationship may make it easier for those players to interact with each other, but it may not necessarily provide the best customer experience. We've taken away a lot of the agency from the customer to be able to choose. And so we need platforms. We need to use tech better. We need government regulation that opens up the ability for the consumer to have much better understanding of what quality looks like in the space, what is a good versus a bad interlocutor to be dealing with, and then to be able to do comparisons that the customer themselves can engage with. And then the second one is, I think a little more tricky to deal with. But it's really a question about how the space opens up and becomes more inclusive and how it becomes less about a big money industry. Because right now in South Africa, particularly, properties are big money gain. And so there are a lot of people who are engaging informally in the property sector in this country, because at a certain threshold, that's when the institutions start looking at you as legitimate. And that needs to be changed. That needs to be altered. And it will be altered in two ways. It will be altered by big institutions being more innovative about seeing customers that have incomes below a particular threshold, that have precarious incomes that don't fit the model secure client, and finding ways to bring those clients in, but also getting more people who are contractors, who are offering services in the space who come in at the lower range in the lower income brackets, so that you can have micro developers as opposed to the big developers in the space. You can have micro financing that is secure and reliable and works for you. You can have rental agreements and rental spaces that is lower income, but is as professional or secure for the consumer as the higher income is. And I mean, one of the examples that I recently came across just in terms of this inclusivity idea, is if somebody is going to be a renter, the idea of how much it requires from that person in order to prove that they are legitimate and they will be able to pay. Number one is varied. So from one agent to another, there are different things that you're going to need to present, but it's also very subjective. And so as a consumer, there's so little control that you have in that space and proving your income and proving things in ways that may be completely subjective and based on things that have nothing to do actually with the transaction. Things like race, things like gender, things like class are playing a role in the sector still because there's so much subjectivity around who's included and who's excluded. And those are the kind of things that we can, I think, take into other parts of the sector as well, but I think there needs to be a more inclusive look at the sector. How do we bring people in so that we open up who can participate in the market, but we also open up in terms of regulations so that people are not discriminated against and fairly? You were mentioning how currently as it is, property is a big money sector and I'm keen to hear from you what kind of changes we can put in place in the value change that can, on the one hand, increase revenue because the reality is businesses are there to make money and make a profit. You say it's one of those things where sometimes the bear of entry can be very high. We know that there are different players who sort of play at different, relatively smaller levels. So how could we almost go about increasing revenue but lower the cost, particularly to the consumer? Yeah, I use the phrase the other day about mainstreaming the marginal. Our country gets very fixated on the parts of our industries and our sectors that are most formalized and our idea of growing and developing a sector is that we must get everybody up to a certain level and that level is still determined a lot by a certain income level and certain costs and for me it's about flipping it over. It's about making the things that are happening at lower thresholds of income that are happening in areas that are not seen right now as suitable, the most suitable for property, the priority and really seeing how we start to work in those areas, work with those income groups and I often think about back then I've had conversations with home known departments of banks saying to them you're missing out on a lot of people who could be bringing a lot of money into your bank because you're not being creative and innovative about inclusivity. You're not thinking about how you're housing the nation, you're thinking about a very old model of how you actually get people in and there are models around the world that are becoming more inclusive and are not as onerous. I think one of the things that I've been hopping on and have seen in other African countries is making the time period that people pay for their either home loans for buying or for building shorter. Rethinking the ways in which interest is calculated and how all of that involves. Rethinking even the kind of the costs, the unseen costs and how those are regulated. Again, right now it's sight unseen for the consumer. So I think there are certainly ways that we can look at models around the world, low-cost income models in various European countries and in America have a lot of promise and opportunity for us to think differently about who gets included in the space and I think that that would go a long way. But I think again going back to the earlier issue around knowledge for me one of the lowest hanging fruits in the space is the space that you guys are trying to fill which is this knowledge gap and I've been working with a small financier and trying to just map out one business that's in the sector and make it a simpler process for somebody to engage and so that they have sight of the entire value chain just in one business it can be very complicated and so we do need knowledge brokers in the space that are almost agnostic to the business. Somebody needs to be kind of the consultant of the property industry. Somebody who's here to teach, to provide information that doesn't have a horse in your property race. So they don't have if you buy X then I get Y. There needs to be somebody who's more neutral than that so you don't feel like you're getting pushed in different directions but the knowledge gaps are way too big across the sector and as people pass through and go through different interlocutors they almost need mentorship. They almost need somebody whose sole interest is to provide you with the best possible experience and take you through the chain and I think there are platforms that are really primed for it and it could work really well to shift in that direction but we definitely need a knowledge shift in the sector so that people can have sight of the full process and can take their agency back in making informed choices rather than forced choices based on circumstance and finances. Before we close off the test I think what would you say is the benefit to property investors particularly and even property managers for them to have a really fundamental understanding of the importance of understanding the value chain where they are in the value chain and of course how the property value chain effectively works because I think more often than not certain parts of the value chain sort of work in silos some know we're going to work together but they kind of like bundle themselves up right really do actually find for example property investors who have fundamental sight of the value chain holistically and then why it's important for them to to know it and understand the workings you know what would you say are the key reasons why those players the investors and the property managers why they should have a fundamental understanding of you know the value chain and its key workings. Yeah I would say everybody who works in the the space must understand the value chain end to end and must be able to communicate that to people who are coming to engage the property sector like I said these kind of once or twice in the lifetime type of consumers and that might seem counterintuitive in that it's a lot more work than you need if you're just the agent I just need to understand what I need to do what I need to deliver to this client and the next person after me and then the one before me and then I'm done but then you've put somebody into a property that was badly constructed or you put somebody into a property where that's being poorly managed the end result of that is less people engage the space regularly less people also grow their portfolios in the space because it just feels too cumbersome as a consumer if you feel like you're going to be ripped off if you feel like you're not being given information and so the better the customer experience is all the way through the value chain the more everybody wins even when we think about kind of you know opening up an inclusion and lower income markets I always find it weird that people seem to think you know that's that's a risk and we don't want to take that risk surely all businesses operate on the basis that you want more clients rather than less clients and so doing the work that opens a bottleneck somewhere else that brings in lower income clients has a benefit again for everybody in the chain and it may require adjustment it may require innovation but when has an industry ever failed because it innovated and I want to challenge the property sector in South Africa particularly to ask themselves when last have we fundamentally innovative or brought innovation into the the sector and why is there kind of a hesitance around that that innovation you know where does that reluctance come from because ultimately you want more customers you want more consumers and there are too many people who are gun shark about the property sectors too many people who are renting when they could buy it to people who just like I will stay in the render thing for the rest of my life who buy at the wrong amount and some end up buying a second or third property overpaying and I think some who go into property investing not knowing what they're doing end up losing quite a lot of money where they have the appetite for it but the as you say the knowledge wasn't quite there and there wasn't a clear enough path certainly to help them along the way so they had the temperament they had the energy and I think we sometimes don't think about the knock on effect of especially the smaller landlords right the knock on effect of when the smaller landlords are actually able to run and we'll call them the businesses because we know that you must run that property like a business the the positive knock on effect when they get it right you know because the reality is you're paying your bond on time you're paying rates and taxes on time you're paying levies on time those levies are paying for other services you're getting a contractor in that you're paying on time so there really is you know positive uh you know ripple effect when even the property investors get it right isn't just a the landlord gets a lot of money in you know in their bank so I think understanding then the value that a successful small scale property entrepreneur how they also sort of bring about bigger value because before I let you go and I think any final insight when it comes to the ways that we can improve the the property sector value chain before we close off yeah you said a word that I'm really really excited about which is property entrepreneurship and I think in a country where we need entrepreneurship in order to get us to the next phase of our growth and development property entrepreneurship needs to become a viable option for people and working in the sector is one thing but being an entrepreneur in the sector is a completely different thing I mean just the idea of being a landlord people don't talk about it as entrepreneurship and so they don't treat it like entrepreneurship they you know this this kind of I'm going to be a landlord but I'm going to hire company x to do this on my behalf because you know I'm not inclined that way I think we need to just break that we need to break the idea that this is not a space for entrepreneurship not of course only in the buying and selling and renting space but again across the value chain in the maintenance space there's some property entrepreneurship that needs to happen in that space in the construction space property entrepreneurship must be encouraged the way in which for instance government tenders and big contractors are given out needs to be about looking at who's the entrepreneurs and people coming up in the space and not only you know the big guys that we've known all the time in the financing sector there are property entrepreneurs in that sector I want to see more property entrepreneurship because I think it will again benefit the entire value chain and ultimately the customer gets a better experience the more choice they have and the more people they have that are motivated in the space to actually compete for giving the customer a good experience. Tessa I think that's a great place to leave it at this evening thank you so much for joining us on the show. Thank you for having me. And that is Tessa Dunes who's a director at Jassauro Consulting wrapping up the Tuesday edition of the Private Property Podcast with myself Uzaman Tumwa Kumalo. Unfortunately Innocent Apiwa did not claim that 500 rand so we're having a roll over so tomorrow evening it's going to be 1000 rand that is in the money bag. Well it's my time to sign off from Balino of course going to be bringing you the farming podcast at 8 p.m. I'll be back on your screens tomorrow at 7 p.m. until then hope you're staying home and staying safe.