Most respondents expect the property market to remain buoyant given the low interest rates, the average income of South Africans increasing, tax cuts, an emerging black market and speculative activity. The buy-to-let market however is expected to become tighter as tenants dry up, while the light industrial and non-residential market should shine. Although the top end of the market might quieten down this will not be the case for the lower end of the market. Therefore volumes of residential transfers and bond registrations should continue in much the same vein as last year.
Mortgage origination has already happened; they will continue to have a significant impact on conveyancing firms as their influence in the home loan market consolidates. Some see banks, estate agents, mortgage originators and the public putting more pressure on conveyancing firms. Pressure will also mount on conveyancer's profit margins as costs rise in line with competition and administration expenses as a result of more delegation of administative functions by financial institutions to conveyancers.
Nevertheless banks need attorneys who can cope with high demands put on them by both themselves and clients. Those firms which successfully keep up to date with and use IT to its fullest will be seen by the banks as real business partners and will not be expected to discount their fees. Hardware costs are expected to come down. Firms which specialize in conveyancing or have departments should continue to render superior service so instructions will continue to gravitate towards them. However, small practices might have problems competing.
This brings us to conveyancing fees and the Competition Commission. A view expressed was that the professional bodies which control the profession will become more aggressive in 2005 with regard to the relationship between retail conveyancers and estate agents. Marketing arrangements will therefore come under ever increasing scrutiny. Tensions could build between the professional bodies and those retail conveyancing firms which see themselves as heavily dependent on support from estate agents and originators but which are forced to play by a different set of rules to those which govern the commercial activities of estate agents, mortgage lending financial institutions and mortgage originators.
Estate agents, like attorneys, should therefore also have to sign an affidavit in order to get their Fidelity Fund certificate. More prosecutions are likely of attorneys who solicit business from estate agents. But this should be seen in the light of what the Competition Commission does with regard to tariffs. In fact the issues of advertising, marketing and touting rules will continue to simmer.
Other thoughts expressed include the view that firms will start to specialise more and more in order to remain competitive, while the demands of BEE and economies of scale will lead to a movement towards the consolidation and mergers of property law practices.
In conclusion one contributor looked into his/her five year view finder and made the following prediction:
Over the next five year period I see a move towards the identification of mortgage bond registrations as more of a document processing and technology driven process than a conveyancing or legal process. That in turn will promote thoughts from within the financial institutions, estate agency groupings and the mortgage origination industry for the creation of centralized bond registration units which are joint ventures or associations between the role players currently operating within the industry.
Here attorneys with conveyancing skills will manage and control the process. Or if the legislature ultimately cuts the umbilical cord between the conveyancing qualification and the need for an attorney/conveyancer, some other professional. The opportunities for such joint ventures and associations should promote some serious thinking along these lines.