 Good evening and welcome to episode 350 of the private property podcast. I'm your host, Uza Mandouma Kumailo. 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 till 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. Whether you're watching us on Facebook, on YouTube or on Instagram, I 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 cash 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 prize that it was bonds 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 Noko 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 their kick starting a really great gardening 101 series. So that's what you can look forward to. If you 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 Zamanthewa 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 explored 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 on 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're 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 Tissa Dooms, who's a director at Jassaro Consulting. Tissa, good evening, and thank you so much for joining us. Good evenings. Good evening, everybody. Thank you for having me. I think, Tissa, 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, that 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 need 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 its 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 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 the 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 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 they 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, does I actually love that you mentioned that last bit around the key role that knowledge particularly for the consumer case 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 are so many different people that you need to form relationships with as much as possible. And 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 Nkosi, 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 where 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 there are 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 experience that pressure point. I know that for many of us who are you know homeowners might say perhaps contractors are big pressure points there's only some or other thing that needs to be done and I feel like everybody has a as 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 and Tessa you know speaking of the the pressure points what would you then say have been some of the challenges when it comes to you know 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 a 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 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 think through conceptually what would make me a good what would make me a good prospective client of the bank or what wouldn't there was just an inability for the banking system to have people on hand to explain those kinds of things and listen 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 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 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 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 the says about 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 with your journey is irrelevant to us then of course you spoke about contractors and we can talk about the property developer as part of that contract chain and I mean recently we've seen the blight the buckle 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 if especially if you're buying for instance in a in an estate or if it's commercial property that developer is actually part of that journey for the long wall and you need to understand what your relationship is with the developer you don't actually get to see the 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 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 you know as as people who invest in property or own property we hope we never have to see them but that's a pipe dream and so as a country I think we're missing out on opportunity and investing in that sector and making sure the people who are operating 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 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 and and I think we're going to explore more of that I want just to take a quick break and when we come back we'll be seeing more of your questions and comments won't it go to a quick break see who the potential lucky winner of that 500 rand that is in the watching 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 up here 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 uh would tell me so would tell me someone for getting on facebook saying hello everyone it's my first time here uh let's give what tell you so great you know private property family welcome I know that many people absolutely love embracing uh new members of the family tell me so we do hope that you're going to enjoy your stay with us uh we're here every single evening at 7 p.m 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 uh slowly improving them and I'm joined by Tessa dooms who's a director at just sort of consulting uh and you know think before the break Tessa we you know we covered so well the the various players and the opportunities to not just better them but also better the the end product that we as consumers get because I think we all already know that fundamentally almost every stage regardless of which uh you know sector you're in there is a service that's been 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 um of your property journey uh as as best as possible certainly as as as easy and pain-free um 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 improvement improvements and making sure that uh you know things are slightly more efficient uh within the value chain holistically yeah I'm going to mention two 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 um is the one that helps us and refers us to a next player in the step or the estate agent um 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 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 um kind of objective arbiters and ways that the consumer can become part of the vetting process for who's who they're dealing with and who they're engaging with so um when you're thinking about who your um your attorneys are going to be right now most people are get given attorneys get stuck with attorneys um without having all of choice anyway of vetting that because there's a relationship between the um the real estate company and that particular 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 and 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 um interlocutor to be dealing with and then to be able to do comparisons that the customer themselves can can um engage with and then the second one is I think a little more tricky um to deal with but it's it's really a question about how 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 game and so um there are a lot of people who are are engaging informally in the property sector in this country because at a certain threshold that's when um 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 um being more innovative about seeing customers that have incomes below a particular threshold that have a precarious incomes um 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 um 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 and works for you you can have rental um agreements and rental spaces that is lower income but is as um as professional or secure um for the consumer as the higher income is and and I mean one of the examples that I recently um came across just in terms of this inclusivity idea was if somebody is going to be a renter the idea of how much it requires from that person um in order to prove that they are legitimate and they will be able to pay number one is varied so from one um agent to another there are different things that you're going to be need to present but it's also very subjective and so as a as a consumer there's so little control that you have in that space and um 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 um take into other parts of the sector um as well but I think there needs to be a more inclusive um you know look at the sector how do we bring people in so that we open up who can participate in the market but we also um open up in terms of regulation so that people are not discriminated against unfairly and you know Tessa you you're mentioning how currently as it is you know property is a big money uh you know sector and and and I'm keen to hear from you what kind of changes uh we can put in place in the value change that can you know on the one hand increase revenue because the reality is you know businesses are there to make money and make a profit you say I think it's one of those things where sometimes the bear of entry can be very high we know that they're different players who sort of play at different relatively smaller levels so how can we almost go about you know increasing revenue but lower the cost particularly to the consumer yeah I'm I use the phrase the other day about mainstreaming the marginal um 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 in 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 um seen right now as suitable the most suitable for for for property um 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 um 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 um old model of how you actually get um people in and there are models around the world that are becoming more inclusive um and are not as onerous I think one of the things that I've um I've been hopping on and I've seen in other African countries is making the the time period that people pay for their their other home loans for buying or for for building shorter you know rethinking the ways in which interest is is calculated and how all of that involves um rethinking um even the 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 and 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 um go a long way but I think again going back to the 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 um I've been working with a small um 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 um 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 um that that doesn't have a horse in your property um race right 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 that 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 who whose sole interest is to provide you with the best possible experience and take you through the chain and I think we there are platforms that are really primed for it and it could um it could work really well to shift in that direction but we definitely need a knowledge um 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 you are on the before we the before we close off the I think what would you say is the benefit uh to property investors particularly in even property managers uh for them to have a really fundamental understanding of uh you know the way the importance first you have understanding the you know the value chain where they are in the value chain uh and of course how the value the property value chain you know effectively works because I think more often than not uh certain as certain parts of the value chain sort of work in in silos some know we're going to work together but they kind of like bundle themselves up right uh really do you actually find for example property investors who have fundamental sight of the value chain holistically and and then how 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 uh have a fundamental understanding of uh 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 um 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 a 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 the 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 gunshot 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 who 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 you know the knowledge wasn't quite there and there wasn't a clear enough path certainly to 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 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 Tungwa Kumalo. Unfortunately Innocent Akiwa did not claim that five hundred rands so we're having a roll over so tomorrow evening it's going to be one thousand rands that is in the money bag. Well it's my time to sign off and by Innocent Akiwa is 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 stay home and stay safe.