Renumeration increases for real-estate and property professionals throughout Australia are constrained despite being higher than pay increases across the economy generally, the latest report shows.
Releasing the October 2019 update of its Remuneration Report, real estate and property industry remuneration consulting firm Avdiev says average pay rises throughout the sector are modest but remain at respectable levels.
According to the report, ‘assistant project managers’ in design and construction fared best, pulling in average remuneration increases of 4.1 percent over the year to September.
Other professionals such as IT business analysts (finance, corporate and IT), senior quantity surveyors, senior analysts (property investment, funds & trusts management), project directors, marketing executives (retail marketing), retirement village managers and mid-level real-estate valuers pulled in increases of between 2.4 percent and 3.0 percent (see chart).
Despite being modest, the rate of increase exceeds both inflation of 1.6 percent over the year to June and wage price inflation across the economy of 2.3 percent over the year to June.
Smart young professionals fared best, with junior workers bringing in average rises of 3.0 percent but senior staff receiving increases of only 2.5 percent.
The latest report comes as the property sector is being impacted by growing uncertainty and increasing challenges in the broader economy, which grew by just 1.4 percent in the year to June and contracted by 0.2 percent after population growth of 1.6 percent is factored in.
A recent Property Council/ANZ survey found that confidence within the sector has dampened amid more subdued expectations in respect of forward work schedules, staffing levels, economic growth and capital growth across several commercial sectors.
The Avdiev survey reveals that this is impacting real-estate business conditions.
Whilst 63 percent of those surveyed report stable business conditions, 27 percent said conditions are deteriorating whilst only 10 percent reported improving conditions.
For now, requirements for skilled personnel is holding up – albeit with vacancy data indicating that demand for design and construction professionals may be softening.
In the development side of the industry, quarterly ABS data indicates that the number of people employed in construction during August stood at a historically elevated level of 1.176 million.
In real-estate, meanwhile, employment levels for ‘property operators and real-estate services’ sit at historically respectable levels of 173,500.
In its report, Avdiev cautioned about media stories of ‘rock star’ pay being offered to chief executive officers of some funds.
These, it said, tend to focus on the overall outcome and results which arise out of a combination of the vesting of long-term incentives and the coinciding of these with a stellar result within the current business year.
Results at this end of the market are far from uniform and there have been cases where base pay and total rewards have actually fallen.
The report also found that some companies are renewing pay structures to reflect business strategies put in place earlier this year.
This includes more suitable mixes of pay and incentives, changing performance targets, aligning pay for performance to market practices and developing new non remuneration policies such as flexible hours, wellbeing and mental health programs, culture and training.
Avdiev managing director Rita Avdiev said conditions within the property sector remain positive but added that many participants are ‘watching and waiting’ amid an environment of mixed signals.
“With the May 2019 Federal elections out of the way there is political stability but uncertainty about the global economy and its impact on Australia’s future,” Avdiev said.
“The mood is mixed”.