 Good evening and welcome to episode 363 of the private property podcast. I'm your host, Usama Antouma, Kumalo. It's Friday, finally. It seems that this week was speeding by, so it was almost as though one moment was a Monday with blink and here we are on a Friday. And what an adventure it's been. I think this week has been that week that where many of us across the country experienced double and I saw some people triple load shedding, especially earlier on in the middle of the week. But at the end of the week, we've made it here and, of course, getting ready for the weekend. But before we get those weekend festivities started, we are, of course, tuned into the private property podcast with my son, Usama Antouma, Kumalo. And if you're joining us for the first time, welcome to the family. You're certainly going to have yourself an incredible time, especially because we tackle all things relating to property and to all our regular viewers at home, whether you're watching us on Facebook, YouTube or, of course, on Instagram, you know how we do it every single weekday. You and I have an appointment at 7 p.m. We always tackle a hard property topic that helps us make better property decisions. And it doesn't matter where you are in the property journey, whether you're looking to buy, to sell, to build. We're certainly here to make it a bit better. And talking about making it a bit better, as you know, we're running an incredible competition on our Facebook page where we want to find out from you some of the great lessons that you have learned while watching this show. And all you have to do is, of course, comment on that post that we've put up on our Facebook page and send a chance of walking away with 500 grand in cash every single weekday. And of course, if we call your name during the show, you have to drop us a text while we're still on air. And that way you'll be able to walk away with the cash price. And if we don't have somebody who claims the money, it rolls on over into the money bag through the following day. This has been a great week when it comes to our winners being on air and of course, claiming that cash price. So we are at 500 grand and we're going to see later on who is this evening's winner. And as you also know, I never, ever, ever alone, there are also great shows that you can tune into across private properties, social media pages. It is a Friday so you can catch Chad and the Home Shoppers show and he's also on your screens every single Monday at the same time. And on Tuesdays and Thursdays, and by you know, God brings you the farming podcast, which he tackles all things agriculture. And on Wednesdays, AC Classic gives you your dose of first time home buyers show. Those are the great shows that you can look forward to every single weekday at 8pm across private properties, social media pages. And of course, do follow us across, you know, various social media pages from LinkedIn, on TikTok now, YouTube, you can follow myself at Xamatoa underscore K always talking everything relating to property. But one of the things that we're doing this evening, as I'm excited, and of course, do check in, want to see who is watching us live right now, show us some love, send those green hearts, share the live so that your friends and family can also see that you are tuned in and watching. And this evening, we're going to be looking at various transformation and in the property sector and joined by Joseph Sakonega, who's the CEO of the National Property Practitioners Council. Joseph, good evening. And thank you so much for joining us on this show this evening. Good evening, Zama and good evening to your viewers. You know, Joseph, I think before you look at your transformation and the sector and what the barriers are to achieving the transformation, let's look at the council, you know, what is the National Property Practitioners Council and what work does it do? Thank you very much, Zama. So the National Property Council is actually looking at the interests of property practitioners. Just like we have in the United States of America, we have the National Association of Realtors. These are the associations that represent the United Voice of the property industry. And our members are, you know, voluntary associations such as Saqqor, Saibab, Rebosa, Saia, and those voluntary associations having their members as estate agents. So our intention really is to be a united voice of the sector to engage with, you know, regulators such as the estate agency of the National Property Practitioners Board, the ministry in terms of them formulating regulations so that we can provide insight in terms of what they should be thinking about when they are talking anything property related and obviously how their decisions from their end is going to ultimately impact members on the ground who are trying to practice as property practitioners. And, you know, Joseph, when you talk about how you provide insight on what, especially the government thinking of when it comes to the property sector, what are some of those key things that you'd say that, you know, is very important that government ought to be thinking about in that regard? Thank you very much, Summer. So as a property practitioner, they are education and training requirements that you have to comply with. So what we do is to engage our members to say what would practically work, because those regulations are defined by regulators such as the estate agency affairs board and ultimately approved by the ministry. So we then engage our members to say, what are some of the challenges on the ground? We consolidate those and then, you know, come to the table with the regulators and say, this is exactly what is staying out on the ground. And when you are formulating strategies to try and respond to some of the challenges in terms of addressing training needs of estate agents, you do need to take this into account because they're coming directly from those that are actually walking the journey. So that then inside that informed strategy, and then we formulate policies and, you know, procedures that will be responsive to the needs of the people in the crowd. You know, Joseph, when we talk about the training needs for property practitioners, what would you say are some of the gaps? And we're saying briefly off air that one of the things that I've noted that one of the things that, you know, tends to be said quite a bit about the real estate sector, especially if we look at estate agents in particular is that it's one of those industries, one of those professions that's relatively easy to start. But as we know, sort of climbing up and being able to make an income isn't necessarily as as easy as purely commission based, you find that people are starting from nowhere, sometimes don't have the means to sort of have that kind of financial buffer for that three month period, when they starting off, we'll look at the training needs, what would you say are some of the gaps that you've seen property practitioners being in need of? So when you join a real estate industry, you have to firstly identify an existing real estate agency firm, like for example, Pembolding Hazermark, you then have to be registered under their banner and then you'll be issued with a license that we refer to as the Fidelity Fund certificate. And from day one, after being issued with that license, you have to enroll for your NQF Level 4. This is a qualification specifically designed for those that wish to be practicing as estate agents. Or you can also be exempted from those qualifications if you already have a qualification that is higher than NQF Level 4, for example. But to answer your question in terms of the gaps in terms of what is currently in the space, we are finding ourselves in a situation where when new entrants join the sector and they are required to do their educational qualifications, they almost have to play a balancing game because they have to go out there and sell property in order to sustain themselves from an income perspective. And on the other side, they still are expected to enroll and do their qualifications. So at the end of the day, you'll find situations where they tend to neglect the qualification side of things and they take longer to actually qualify. Just to give you perspective, according to the EAB's current annual report for the financial year 2021, we've got about 51,000 estate agents in the entire South Africa. Of those, over 20,000, just to be specific, 23,000 of those are intern estate agents. And intern estate agents actually means that these are the people that have not met the education and training requirements. And it's not because they just recently joined. Some of them have been interns in excess of six years. And the regulator EAB, that is, is actually starting to rise to this people to say, we've given you two years at minimum to meet your education and training requirements, but you have been in the space for more than, you know, two years, and you haven't met the education requirements. And at the actually heart of why they are not actually moving up the ranks to become full status because that is the next category of estate agents from being an intern when you meet the educational requirements, and you get to be promoted to become a full status agents. They will often say that they have to play a balancing act because they have to sell property. Because this is an income, I'm sorry, a commission based industry. If you don't sell a house, or you don't find, you know, a property to rent out on behalf of the landlord, you can't get an income. It's not like your full-time job where you get a salary. And every month you are guaranteed that you're going to get an income. So here you're writing your own checks. So they find themselves having to, you know, look after their financial interest by going out there to sell. And as a result, they don't actually take care of their education and training requirements. And in addition to the NKF level four qualification I spoke about, they have to do what we call a logbook. A logbook is just a record of their practical experience for a period of 12 months. So that is something that they tend not to do. And if you're to speak to some of them currently, they will tell you that they haven't done the logbook for the past six years and they're struggling to even understand how to do it. Now, part of the challenges that we're encountering on the ground is because those that are supposed to be mentoring them. Some of them have been in the sector for a very long time and they were promoted to be principles and full status agents based on their experience, not necessarily based on them having gone through the same academic journey. And now they don't know exactly how to, you know, help this, you know, new interest to meet the educational qualifications. Those are some of the challenges that we're picking up from the ground and they need to be addressed by almost training the trainer in order for them to be able to train those that are joining. And, you know, Joseph, you've already started talking about getting into some of the challenges, right? Because we, because we're having this conversation of air and I think it's such an important one to understand, especially for people who want to get into the industry. You know, some people may want to go at it full time, thinking that it's you sign your own check and your check will always be big, but not having a very firm understanding of the path to finally getting to a point where your check is big, because there are certain state agents who, you know, are now at that level where their checks are big, and they're able to have a very consistent, you know, income, their area specialist in really good areas, where there's always an activity of sale. So having a good grasp of what is happening is some of the challenges, especially for people at home who want to pursue this as a career is so crucial. And I can already see some of the love that we're getting on our Facebook page of many of people watching us at home. Glatterinda is watching Mansoir Victoria saying, doing great now. It was very hot during the day commenting there with how her day was. So Lucy May is also watching us on the show. And we have got an elder evidence saying good evenings. Am I looking stunning as usual? Thank you very much. They're an elder. Christine DiCiao was saying the convincing session is the one that got me hooked. And I told myself I'm not missing a session anymore. I absolutely love that Christine we're glad that you hopped onto the bus and have stayed on and continue to tune in every single evening. Gossapamela is watching, sending those green hearts. Polina and Kosi, Mansoir and Victoria. And do keep them coming. We're going to be taking more of your questions and comments. And we're also going to be looking then at what do we mean when we talk transformation? Joseph, we're going to be looking at the barriers of transformation in the sector. But before we look at even the barriers, what exactly do we mean when we talk about transformation in the property sector? Zama, this is a very sensitive topic. And I think it actually requires us to have courage to actually have this kind of a conversation. And it's critical that 27 years into democracy, out of the 51,000 estate agents that operate in the entire South Africa, less than a quarter of the 51,000 are black people. And when we say black, we basically are talking about African, Khaled and Indians. So collectively, that grouping actually represent less than a quarter of that 51,000. And even worrying is the number of people that are actually joining as new interns into the sector. Our people are some of them, of course, they are joining, but they don't stay. The critical thing is, it's not them not having interest into the sector, they do join, but the retention rates are way too low. And the reason why they actually don't stay is specifically because you need a financial muscle or support system to actually keep you going up until you receive your first commission. Otherwise, then you will even struggle to travel from home to go to work. And there has been government programs that were introduced by the EAAB as the regulator in the industry. But those haven't actually worked quite well, because the vendors were actually not necessarily wanting to become estate agents. They were more looking for a job. And when they're looking for a job, and they join the sector, if another opportunity comes along, they will definitely leave the sector because the kind of, you know, benefits they were getting from the sector, it was a minimum of 2000 rent as a stipend. I mean, if you get an opportunity to go and be employed and get 20,000 or 30,000 as a salary, you definitely going to leave. So those are some of the things that we've actually observed as some of the challenges in the space that it's not that people don't actually show interest to join the sector. They do join, however, because of the challenges that they encounter from a finance point of view, they end up actually having to leave to go and find a job. And you are well aware of the high numbers of unemployment amongst the youth in this country. So when EAAB as the regulator advertises a program to say we are looking for young people to join the real estate sector, they will definitely get the numbers. But then those numbers don't get to be retained. And if you look at the heart of why they're not staying, one, they were not specifically looking to be estate agents, because they will only realize exactly what does being an estate agent entail once they're in the sector. And they will then obviously find themselves having to find other alternative ways to sustain themselves and they will ultimately end up leaving. So that's basically the kind of trends that we have observed, especially amongst young people, they join, but then the problem is they don't stay. And if you look at the demographics of this country, I mean, over 80% of the population comprises of black people. But then even if you look at the numbers that EAAB has actually reported on, more white people are actually joining the sector. And that is greatly informed by where we come from. Because real estate in the past has not been an industry that a lot of black people joined. They're trying to join now. But the problem is when they join, they join actually existing brands of white owners. And sometimes the culture doesn't work for them and they end up leaving. So the question that we need to be answering is what are some of the interventions that we'll have to look at to try and get them to stay. And more importantly, you know, meet the educational requirements so that one day they can run their own estate agencies and employ other black people to then get the transformation traction in the sector. But right now as things stand, majority of the people that are owning the property agencies are white. And as a result, there's always culture clashes. And now the question is, what are we going to do to change that landscape? And it's not looking pretty. You can just look at the annual report from the estate agent service board. And I'm telling you less than a quarter of black people are actually in this place. And we're definitely going to be looking at those interventions, what they potentially ought to be and should look like. I want to take a quick break and see who the potential lucky winner of that 500 lands in cash is on our competition that we're running on our Facebook page. And when we come back, we'll be taking more questions and comments. And of course, looking at the barriers to transformation and what needs to happen so that we're able to certainly have more black property practitioners being able to be at the right accreditation level, especially because so many have been in the field for quite a significant number of years, but unfortunately are still at intern level. Let's take that break. And when we come back, we will be continuing that conversation. And the lucky winner this evening is the lucky winner this evening. Bonzo, I hope that you are watching and if you are, drop us a message down below and you'll be walking away with that 500 lands in cash in our daily competition. I see Bonzo's comments. Most days out there, this wasn't the one day where she is not tuned in and watching us. We are taking, of course, more of your questions and comments on our social media pages as we look at the barriers to transformation in the property sector. I'm in conversation with Joseph Sarconega, the CEO of the National Property Practitioners Council. And going to more of your questions and comments this evening, we've got Polina and Kosi saying, I have to remember that you should be able to sustain your livelihood for six months. And that is, of course, with reference to estate agents. And the reality is so many people absolutely cannot do that. I think even people who work regular nine to fives aren't able to save and build up a reserve that is even sufficient for three months. Never mind a six month period. Christina Taba saying commission is, and of course, using those superlatives and it is quite a difficult one. I think working on commission only is not an easy career path because, as Joseph has highlighted, if there aren't any sales, that means that there is no income. And I think living in a country that we're living in, in the market that we're living in, and it also just depends which area are you in. I mean, we know that certain areas do tend to land themselves with more property transactions and over other areas. So in the event where, you know, you might be in an area that doesn't have as much property activity, then you are going to struggle quite significantly as a property practitioner. Joseph, you make mention before we took the break around, you know, interventions that are needed or what kind of kinds of interventions would be needed in order to enable Black property practitioners to be able to stay and of course, meet those requirements. What kind of interventions do you think need to be put in place and implemented? Zama, thank you very much. And I think we don't really need to reinvent the world here. There are solutions that have been implemented elsewhere. We can go to, you know, other countries where real estate is highly regulated and well regulated like the United States of America. And if you look at our, you know, settings here, up until 2019 we've been using the Estate Agents Affairs Act, which was enacted in 1976. And you can agree with me that that is a long time ago and a lot has changed since 1976 to date. And in that piece of legislation, there was no legislative framework to focus specifically on transformation. But some of your viewers would recall that in 2019 late, the president of this country enacted the new Property Practitioners Act. And in that particular piece of legislation there's a dedicated chapter specifically focusing on transformation and that is chapter 4. And in the very same legislation we see that there is section 21 that seeks to establish a property transformation fund that is aimed specifically at looking at the fact that over 80% of the population makeup in this country comprises of Black people. But we can have a situation where by less than a quarter of that grouping are actually actively participating in the property sector that contributes immensely to the GDP of this country. I mean we're talking about 7 trillion rent to the GDP on an annual basis. And just recently I was just looking at the Lifestone Report where about 281 billion was earned in commission. But you now need to ask the question how much of that quantum went into Black hands. Now to answer your question as to what we should be doing to respond to those transformation challenges, we need to just you know get the regulations that support the newly enacted property practitioners act to be passed. At the moment those are still with the ministry because we cannot enforce the new act up until the regulations are passed. So that is one of the things that we are waiting for to actually be finalized and soon that is done we'll then obviously get the transformation fund to be established. That will be aimed at providing things like funding to Black estate agents. But I think more importantly we should look at not the new entrants we need to be looking at the existing practitioners to try and get them to scale to you know capacitate them. I think the key word here should be capacitation of the existing practitioners such that those Black practitioners that are going to be capacitated will then be used as anchors to employ other Black practitioners in the future that will obviously be in the space. Just to give you a practical example if you and I are looking for an estate agent to make use of to sell our property we are likely going to go to property portal such as private property or property 24. But then when you get there you're going to not find many Black estate agents and the question is why? The answer to that is they can't actually afford you know the marketing fees to get them to be on those platforms. So having transformation funds transformation fund established will get then funds to support those people to be able to afford those fees to be on those portals thereby obviously leveling the playing thoughts. So it's very important that we look at why are we not having people that are actually thriving as Black estate agents and one of the main reasons is access to markets. Access to markets meaning you need to have stock to sell once you join the sector because we pointed out earlier that you're writing your own check here it's not like you're going to be given you know a salary and if you can't sell property it means you can get an income. But we also have you know other leaders that we need to focus on because just to give you an example government has got a huge amount of stock in terms of property we need to obviously get them to start you know enlisting the services of the Black estate agents to get them to make meaningful income in terms of the transactions but also more importantly we need to embark on a serious consumer education because often many times when a consumer wants to buy property they will look at established brands that in essence means the Black and young upcoming estate agents will stay out of the mainstream of the property space. So we need to then educate the consumers to say they are Black qualified estate agents that you can make use of and here is a pool of those guys that you can you know access and make use of their professional services because there's no point in us coming up with super training programs where we can you know provide inside as industry and get our Black estate agents to be trained and after they have been trained they can't get access to markets that is going to defeat the whole transformation equation where they will have the qualifications but then they won't be able to you know meaningfully participate in the you know property space from an economic point of view. So there's consumer education that we need to actually embark on to try and get you know consumers to give this Black estate agents Mondays to go and sell their property or lease their property so that they can get an income by so doing obviously we will get them to get an income and have staying power so two things need to happen capacity those that are in the space then get them to be anchors of transformation by employing young Black you know professionals you know professionals are joining the sector but they don't stay for the same reasons where when another great job opportunity arises they will obviously opt to jump ship and then you go on find them a year later so those are the kind of trends that we've observed and there are so many interventions that as a consolidated industry representative we have insight coming from the ground to say this is exactly what would work and also they are onerous regulatory impediments that need to be signed up for example if you are a property practitioner running a company you have to maintain a trust account even if you don't make use of it so the key thing here is we need to be saying what are some of the regulations that are actually not saving the industry do we really need to have everybody to have a trust account even if they use the lawyers trust account when they are transacting in the property space and if they don't make use of the trust account then we need to exempt a certain category of estate agents that are in the space but they don't need to make use of the trust account because that very same trust account needs to be audited by a chartered accountant who is also a registered auditor and those audit fees are not low they are very high and at the end of the day they end up driving some of these guys that are trying to sustain themselves in the sector so those are some of the regulatory impediments that we as the representative of the industry we're saying we need to have a serious engagement with the legislators and the regulator to say this is not working how we change it moving forward and before we wrap up Joseph we've got a question and when you look at the issue of consumer education one of our viewers of Christine DiCiaba saying you're asking when you're in the process of buying a house how far does a role of an estate agent go when the process is still with the convencer do they contact the attorney on your on your behalf or you know always the owner rather the buyer who's getting involved and you know they went on later to to add the role of the estate agent does it go further until registration or the buyer would need to check with the convencer so just a snapshot of at which point when you're a buyer do you have to you know be following up with the attorney because you would have been interacting obviously with the estate agent that would have shown you the property and they would have given you the offer to purchase and so when do you kind of will say stop the relationship and now contacting the convencers directly or are they holding your hand until the very end great question Zama and this is something that i'm glad we are actually going to entertain the role of an estate agent is actually from start to finish in other words you need to rely on the estate agent to do the follow-ups with the convencers because there's so many intricacies that are involved in terms of facilitating a property transaction this is the reason why they go through the rigorous training program so that they know exactly how to engage the convencers what questions to ask and there's so many pitfalls that you can actually end up falling into if you want to take the process over yourself because you don't know exactly what are some of the compliance issues that you need to look out for and at the end of the day the agent can only be paid once the transfer of ownership has been transferred across from the current seller to the new buyer who will then obviously become the new owner so to answer the question you have to rely solely on the agent from start to finish whatever inquiries that you would like to do from the attorneys you need to ask the estate agent because they will even know how to ask your questions on your behalf from the convening attorney and i think you know i i've done quite a number of property transactions especially buying and obviously obviously working with different kinds of estate agents and you find that the really good ones even when i've given some mandate are the ones who are on top of the bowl and give you feedback regularly you don't even have to you know get to a point where you're worried they're able to answer your questions along the way and if there's any issue they do raise it with the convencer and establish what is going on what is the hold up so really as as a buyer or even as a seller there's no reason why you should be lifting the dog and that's why the estate agent is there to to really work with the journey with you and make sure that at no point do you feel as though you don't understand what's happening in the transaction and you don't know who to ask because i think with many people you're not going to be doing multiple property transactions and so they really are as you know so well put it and Joseph so put it so well was that there's really intricacies in in the process that i think so many of us probably don't know and wouldn't be aware of and so that's where the estate agent comes in and they have to also be on top of the game because certain things they're able to answer but they will you know be in touch with the convencer to get a sense of what the hold up might be Joseph before i let you go this evening i mean any final comments when we you know look at we'll say the next year you know going forward when it comes to tackling some of the challenges that we've been talking about this year and really creating an environment where black property practitioners can not only enter the market but i mean enter the industry but also stay and thrive and in the industry thank you very much sama and i think we actually need to focus on the role players in the sector one the consumer needs to be educated that when one day we're going to be looking at the numbers of estate agents that are black in the industry and will be saying there's lack of transformation we have a role to play as consumers because if we are consistently just giving you know white estate agents business and not trying to find a black estate agent to actually you know enlist their professional services the status quo will remain that's the first thing that we need to look at now as an industry we need to constantly engage with the regulator to inform them of the things that are actually you know impediments on the ground and let them actually formulate strategies to then respond to those challenges so there's a role that we as industry need to play and engage in the legislators and the regulator and formulate things that will be beneficial for the sector but more importantly we need to encourage young you know black people to join the sector even those that are professionals because when you're a professional already you have a qualification you don't have to do the introductory qualifications you're going to be exempted from those and immediately you get to earn an income of course if you sell a property or you find a property to rent on behalf of your landlord so this is one of the industries that we can use as a vehicle to alleviate the high unemployment rate especially amongst the youth but if done right so the key thing here is we need to make sure that one the young people know exactly what they're getting themselves into and be prepared to actually work hard because if you do work hard you can actually make it and there are people that are actually in the space and they're enjoying being in the space the second thing is also look at the current you know education and training standards that are not necessarily beneficial to the sector because this is the only industry where you will have to do your qualifications whilst you are also you know being trained unlike other professions such as accountancy or law you first have to go and get a law degree and then you join a legal firm just like the the the auditing profession you have to get your b-com then you join a an auditing firm to do your articles so what we're proposing as an industry would be a situation whereby we get this young people to actually first do their qualifications before they join the sector and then upon them joining the sector we can then give them six months to learn the practical side as opposed to the current 12 months that they are required to do by so doing we'll get them to actually stay because they'll be excited they'll be having their theoretical underpinnings and start earning an income so what we're saying is the current system is not working and it needs to be revamped so the future is actually looking bright because there's a transformation fund that is going to be set up specifically looking at empowering black practitioners that are currently in the space and we can get more and more people to actually join the sector is it that we're waiting for the regulations to be passed until such time unfortunately we're still using the old act which doesn't make a provision for a transformation fund so that's basically the the overview of where we're going in terms of the future outlook of the industry but Joseph we are going to even this evening thank you so much for joining us on the show thank you so much and enjoy your show further thank you so much thank you and that is Joseph Sakonega who's a CEO at the National Property Practitioners Council has already talked about the barriers to transformation in the property sector and of course we will be watching with basic rate when the new property practitioners act comes into effect there are quite a number of things that is going to affect and we're going to see how the industry is going to look like once it's in effect and of course that is how we're going to wrap up the show this evening unfortunately Ubonso was not watching as large she didn't drop a text down Nebulae I know she's going to kick herself because I do see her commenting on the show very very regularly well that is where we're going to leave it here this evening for myself of course I'm Anton Wachumalo and the rest of the private property podcast team will be back on the screen on Monday evening at 7pm you can look forward to the home shopper show with Chad at 8pm until then hope you're going to enjoy your weekend and as usual stay home and stay safe