This article is from the Australian Property Journal archive
THE worst may be behind the property industry as labour shortages and pay pressures stabilise, while real estate valuers have netted the highest wage increases.
Avdiev Report’s latest Property Industry Remuneration Report, a survey of pay rates and market trends in the property sector, shows property sector wage rises moderated from 5.0% to 4.7% in the year to February, but continue to outpace the general workforce (4.2%).
The survey showed 44% of property companies admit to difficulties keeping up with staff demands for pay rises, although pay increases for 93% of businesses this year. Minimal pay rises are expected for 30% of businesses, while 15% expect higher increases to catch up to market level.
“Property industry employers have cause for hope that the worst may be behind them, as the significant labour shortages and pay pressures of recent years appear to be stabilising at last,” said Debra Moloney, principal of remuneration consultants Avdiev Report.
“It is encouraging that most companies believe adverse trading conditions are now bottoming out and some optimism is beginning to appear. Stabilising remuneration and skills shortages, coupled with expectations that interest rates may start falling by year’s end, will create more favourable operating conditions for most property sectors in 2024 and beyond”
One-quarter of companies continue to face recruitment difficulties amid easing labour shortages, but this has continued to fall since peaking at 60% in March 2022.
The biggest pay increases went to real estate valuers (5.0% to $102,400 per year) alongside assistant architects ($70,000).
Heads of sustainability recorded a 4.7% uplift to $323,200, while 4.5% increases were received by general managers of property developers (to $598,100) and senior village managers of retirement living and aged care businesses ($149,600).
Retail centre managers for centres above 100,000 sqm of gross lettable area saw their pay lift 4.3% to $254,500 per annum, as did assistant capital transactions, acquisitions and sales executives of property investment funds and trust management (to $151,100).
Mid-level contract administrators at building, design and construction firms received a 3.5% pay increase to $144,300 a year.
Performance sags
The performance of property companies fell significantly over the past six months. One quarter report performing “well” in 2023, significantly down on six months earlier, while the majority (55%) said they are performing “moderately”. Only 25% said they are performing “well” and just 15% are performing “very well”. This marks a dramatic drop in performance compared to the previous six months, when 47% of companies said they were performing “well”.
Most (53%) expect little to no change in operating conditions for 2024.
“While supply chain issues, business collapses and cost blowouts have all weighed on performance, staffing constraints in terms of remuneration and recruitment were consistently cited as among the biggest challenges,” Moloney said.
Property companies have sought to embrace alternative means of rewarding staff in a bid to keep a lid on wages and attract new talent. This includes performance-linked incentives, more staff development opportunities, and greater workplace flexibility. Only 25% of property firms have returned to pre-pandemic ways of working as hybrid arrangements continue to dominate.
