Abstract

MGIBA, Freddy Marilahimbilu. Information asymmetry and the functioning of the real estate industry in South Africa: A conceptual paper. JCMAN [online]. 2023, vol.20, n.1, pp.186-206. ISSN 1815-7440.  http://dx.doi.org/10.35683/jcm21110.192.

BACKGROUND: The prevalence of Information Asymmetry between real estate agents, sellers, and buyers in the South African real estate industry should be an issue of major concern THE PURPOSE OF THE STUDY: To systematically investigate how the dual mandate system and the ideological outlook of real estate agents in the South African real estate industry provide a fertile ground for exploiting the inherent information asymmetry in housing transactions to the detriment of optimal functioning of the industry DESIGN/METHODOLOGY/APPROACH: The analysis was conducted by use of the systematic literature review and used the Signaling and Agency theories as lenses FINDINGS: The study concludes that information asymmetry can be systematically applied via pricing, marketing practice, the handling of information, and the pooling of services for the benefit of real estate agents, to the detriment of both seller and buyer principals' interests RECOMMENDATIONS/VALUE: It is recommended that the South African real estate policymakers enact strategies to both verify the discussed manifestation and to identify other possible manifestations of information asymmetry with the view of mitigating the effects thereof MANAGERIAL IMPLICATIONS: The study outcomes suggest both policymakers and real estate agencies need to cooperatively implement practices that can bolster confidence in the industry JEL CLASSIFICATION: M31; M37; 018; O35

Keywords : Agency theory; Dual mandate; Ideology; Information asymmetry; Signaling theory; Outcomes.

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