#TurningPoint | Surviving a Market Pullback: How top estate agents thrive with social media marketing
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While record-low interest rate levels over the last two years helped give millions of new buyers a foothold in the South African residential property market, an upward trend in the rate, high annual inflation, record-high unemployment, an economy struggling to get back to pre-pandemic levels and the added strain of load shedding have seen the market slow significantly in the last few months.
“Many of these aspects are a global trend – and they’re not going to stop anytime soon,” Jason Joffa, Business Head: Bridging Finance at Lamna Bridging Finance told the audience during the 4th Flow #TurningPoint webinar this week. “We’re set for more interest rate hikes as SARB tries to combat inflation and I think we’re looking at another 3-4% in the medium term. While that won’t see rate levels anywhere near what they were in the 1990’s, the increase will push entry-level home owners out of the market on affordability”.
The market pullback has corresponded with an increased demand for rentals – a 180 degree switch from the situation over the last two years. Prop Data CEO Mark Buttress says this trend is borne out by activity on their platforms, which has seen 10-15% fewer buyers and tenants browsing properties in the last month. “There’ll be a bit of a longer lead time on the impact on sales because of the length of time it takes to process transactions, but we’re definitely seeing activity impacted higher up the sales funnel, which will definitely translate into changes at the bottom,” he says.
A PropData poll of over 19 000 real estate practitioners about their feelings around the most recent interest rate hike showed that 48.9% felt concerned that the increase would have a great impact on the market. 36.1% were optimistic the market would weather the storm and 15% were unconcerned because the prime lending rate is still low. “That shows us that the pullback is mainly going to affect the affordable end of the market, where challenges around employment and the higher cost of living will have a greater impact,” says Buttress. “That was also the sector responsible for most of the industry’s growth during the pandemic. Property practitioners who realise that and read into what is happening will find opportunities to leverage”.
Joffa says that the percentage of unsecured debt against take-home salary in South Africa is much higher than it is anywhere else in the world – 50% vs 33%. “That pushes a lot of people out of the buying market and into defaulting, selling, downsizing or renting,” he says. “Add to that, the cost of petrol and lack of developed public transport infrastructure here and we’re also seeing more people struggle to get to their places of work – which is pushing up prices in, for example, Johannesburg’s inner-highway ring”.
Properties are also taking longer to transfer than before, according to Joffa. “Where a transfer used to take 8-12 weeks, it’s now taking 3-6 months, with plenty more roadblocks,” he says. “Spatial Planning and Land Use Management Act (SPLUMA) certificates can take a year to procure and with the Deeds Office in Pretoria struggling to operate under load shedding, the transfer process is now a huge challenge. That changes the dynamics of a transaction, where affordability levels drop the longer it drags on and the bank could pull the plug on a deal”.
All these challenges affect the work of agents, too – but those who are effectively harnessing the power of social media are feeling the impact, far less. According to Flow Co-CEO and Co-Founder Gil Sperling, when the market is in decline, agents need to use social media ads to stay top of mind and attract new clients. “You can show sellers you can promote their properties better with creative campaigns and featured properties. You can also attract new clients and get more stock through engaging ads that command attention,” he says. “50% of sellers only talk with one agent before deciding who to work with, highlighting the importance of staying top of mind. A consistent social media presence helps generate that kind of awareness, meaning an engaged agent will be the first person someone thinks of when they’re ready to sell”.
Buttress says that agents always need to be active. “The efficiencies offered by social media advertising are unquestionable, but more importantly, with all these shifting socio-economic factors coming into play, it’s more important than ever for agents to read into what consumers really want and need and use those platforms to speak to those messages,” he says. “Understanding the motivation around why someone is selling a home – which could be because they want to upsize, downsize, can’t afford it, are moving cities to a new job – allows you to target different messages more effectively to different people at different stages of the sales funnel”. Those kinds of messages aren’t just brand pushes or ads – considered content pieces around the effects of rate hikes, semigration and the like allow for nuanced messaging that will reach people in different places. Sperling concurs: “as a property practitioner, you and your brand are all about trust. Regardless of the market conditions, you are there to facilitate a major financial transaction for someone – and digital channels are where you’re going to reach the modern consumer, so you need to work hard there to constantly be top of mind”.
Sperling says that top agents can use social media to advertise selectively – and with FlowBrand digital presence ads, they can zero in on exactly the right audience, effortlessly targeting buyers, sellers and tenants by age, gender and location. FlowBrand allows agents to achieve top of mind awareness in their suburbs with ease; choose from hundreds of optimised templates to create their own brand awareness ads in minutes and get instant lead notifications straight to their phones, so that they never miss an opportunity. Buttress says that agents need to be ‘in the face’ of home owners and people in the market, as much as possible. “If you target them with useful content, you’ll be able to track engagement and retarget people, engaging them with more specific messages, which gives you a great idea of what the trigger point is for their interest,” he says. “When you connect the dots through clever tracking, you get better return on investment on your media spend”.