Opportunities for professionals within Australia’s property industry are shifting to the commercial side of the market as residential demand is impacted by declining investor activity.
In its latest quarterly report, recruitment company Hays says demand for candidates in high and medium density sales roles has cooled in places such as New South Wales and Victoria as activity from foreign residential buyers has been impacted by special stamp duty surcharges which have been levied on non-resident buyers.
But it says new opportunities are emerging in the commercial side of the market.
Opportunities are also evident in other areas.
In Sydney, for instance, strong public investment is creating demand for candidates who are experienced in project development and delivery across agencies dealing in areas such as transport and housing, Hays says.
Capitalisation strategies in these organisations have also increased demand for acquisitions and investment professionals to move to the public sector.
In Melbourne, growing activity in community estates involving townhouses and detached houses is fuelling demand for project sales consultants to sell projects as well as sales consultants to work on behalf of builders in selling new homes.
“Following the tightening of overseas investment legislation, the high and medium density residential sales market has cooled slightly,” Hays says, referring specifically to the situation in Sydney.
“However, it is a different story on the commercial side. Commercial rents remain at an all-time high, driving tenants to look at city fringe options. This is increasing the demand for candidates experienced and interested in this market.
“Similar to Sydney, the Melbourne market has also been impacted by overseas investment legislation, resulting in a slight slowdown in sales for off the plan apartments…
“Overall (however,) the Melbourne market is buoyant with commercial and industrial property development creating a need for strong leasing and property managers. Industrial development in Melbourne’s northern suburbs is set to outstrip other city sectors for the first time ever this year, forecasts show.”
Throughout much of the eastern seaboard, residential purchasing activity has cooled since its peak in September 2016 as the imposition of special levies has hit foreign buyer demand whilst tighter lending criteria has impacted domestic investor buying.
In New South Wales, for example, non-resident purchasers of local residential property are subject to a stamp duty surcharge of eight per cent of the purchase price – up from four per cent prior to the 2016/17 State Budget.
In Victoria, that figure is seven per cent, up from three per cent before the 2016/17 budget.
Also, action from the Australian Prudential Regulatory Authority has clamped down on lending practices to domestic property investors.
In the case of interest only loans, for example, APRA earlier this year introduced requirements saying that these must be restricted to 30 per cent of all new residential loans (as of March, these loans equated to around 40 per cent of new residential loans).
As a result, sales of new homes and apartments have trended downward over the past 12 months.
Despite this, overall sentiment within the property sector remains strong.
In the most recent edition of the Property Council of Australia/ANZ Property Industry Confidence Survey (December quarter), expectations regarding forward work schedules and staffing were at their strongest point in at least a year, with high levels of optimism in sectors such as hotels and retirement living and growing optimism in the office sector.
Outside of New South Wales and Victoria, according to Hays:
- Demand was strong in Queensland for retail and commercial leasing specialists with local experience. Demand for client site project managers is also increasing and salaries especially in the intermediate level are rising amid an upward trajectory in building activity and a desire to improve assets.
- Job vacancies are rising in South Australia with all areas of the public sector looking for experienced commercial property specialists across state, local and non-government organisations. The aged care sector is leading the way, whilst activity is strong in high-density residential and education following government moves to speed up aged care developments, transfer Housing SA properties to community housing providers and build STEM skills through new classrooms within state schools. Skills in demand include property and acquisition managers to help aged care providers to accommodate anticipated growth, property and tenancy managers to help community housing providers manage additional properties and residential property managers to manage the growing rental market across metropolitan Adelaide. Property officers within government are also needed to manage an active development market within council areas.
- Whilst the overall market is subdued in Western Australia amid high vacancy rates, there is some demand for strong negotiators in the commercial leasing space amid the oversupply of office space as well as quality residential and commercial property managers.
- Conditions are also challenged in the Northern Territory as the peak of the boom associated with the INPEX gas project passes and rents drop as properties lie vacant, although some demand does exist for ‘tenacious’ residential property managers to operate in challenging conditions.
Hays did not provide specific commentary for either Tasmania or the ACT in its report.