The property industry continues to navigate a complex environment marked by high interest rates, increasing costs, and cautious investor sentiment.
However, despite these challenges, nearly half of the companies we surveyed are performing well, and the outlook for the next 12 months is generally positive.
Cost of living pressures and the need to keep valued employees have been the major factors influencing remuneration increases in the year to September 2024. Many employees sought higher pay and employers made efforts to meet demands and crucially, retain their workforce.
However, this was balanced against the broader economic difficulties and financial sustainability impacting their organisations. Across all property sectors, the overall median increase to September 2024 was 4.3 per cent, slightly above the June 2024 Wage Price Index of 4.1 per cent and the Consumer Price Index of 3.8 per cent.
This is, however, lower than the 5 per cent increase recorded in September 2023. This was the standard full increase for 63 per cent of companies, while 10 per cent offered catch-up adjustments for staff needing market realignment and 23 per cent awarded minimal increases.
“Managing remuneration budgets has emerged as the top remuneration issue for property companies,” said Debra Moloney, Principal of remuneration consultants Avdiev Report.
“With cost-of-living pressures driving salary expectations, businesses are facing a delicate balancing act. While most companies have managed to maintain competitive pay rates, the forecasted median increase of 3.5 per cent over the next year reflects a cautious approach to ensuring sustainability in the face of ongoing economic pressures.” said Moloney.
“Companies are adapting their strategies to overcome obstacles, which will be critical to maintaining momentum and growth in this current market.”
According to Avdiev Report’s latest Property Industry Remuneration Report October 2024 Update – a leading survey of pay rates and market trends in the property sector – there has been a notable increase in companies doing very well compared to last year
Despite the difficult climate, many companies remain resilient. Nearly half of the respondents (48 per cent) report that their businesses are performing “well” (26 per cent) or “very well” (22 per cent) in the current environment.
A further 48 per cent state they are faring moderately, while only four per cent describe their company as performing “badly” or “very badly.”
The outlook for the next twelve months is positive, with 33 per cent of companies expecting to be performing better, 60 per cent expecting no change and just seven per cent predicting worse conditions and performance.