By Michael Hamlyn

Andrew Golding, the chief executive of the Pam Golding property group, surprised no one when he said on Wednesday that the past year has seen extremely tough trading conditions for
the industry.

He said it was characterised by a 50% fall off in the volume of sales, an extreme scarcity of bank lending finance, and a marginal fall-off in pricing.

"All companies have had to adapt to these conditions, and we have been no different," he said.

"Since the market began to turn downwards more than 18 months ago, (the company) has managed to reduce its overheads by more than 30%.

This included some retrenchments and natural attrition in terms of agent numbers, amounting to close to 20% reduction in our permanent staff count and a 25% reduction in agents."

He pointed out however that this should be seen against a backdrop of an industry where more than half of registered agents who were present 18 months ago are no longer in the industry

"Depending on who you believe these numbers may even have dropped by more, supposedly from a high of 80,000 agents two years ago to somewhere in the order of 25,000 agents currently," he said.

Golding said that while trade in "uber-prime" market has been thin "it has continued to surprise us with its ability to push the top end of the residential property market in South Africans to new levels".

In the rest of the market the story has been much the same with a dramatic fall off in volume, and a moderate reduction in prices "probably in the order of 10 to 15% over an 18-month period," he said

He said that looking ahead, the property business has already seen the green shoots of recovery in the market with significantly increased volumes (up 20%) in the past six months.

"While prices have not in our view moved into positive territory," he added, "they have certainly halted their decline."

He believed this is due to the relatively low interest rates, a general improvement in sentiment and very slight loosening of the banks' money taps.

He also reckoned that the long-term effects of the 2010 soccer World Cup will be exciting.

"I anticipate that once the world sees what SA has to offer the long-awaited potential of direct foreign investment into property might well be realised over the next ten years."

Source: I-Net Bridge