The property industry, like many others, is grabbling with a skills shortage and while migration levels are high, there might be an unexpected reason the skills shortage continues in the short term.
The Demographics Group Demographer Simon Kuestenmacher in addressing The Property Congress said there is an interesting reason why the skills shortage might get worse in the next few years.
“The Millennials, were over the last decade in the renting stage of the lifecycle. This is before you make babies, but now they want homes.
“Millennials in their 30s are finally making babies,” he said.
“That means they at least temporarily leave the world of work behind. This is a long-winded way of saying the skill shortage will not get better, it will get worse in the next two years.”
Mr Kuestenmacher said the shift in demographics presents an opportunity, but the industry needs to find a way to service all of the growth.
He said the first step is to retain staff and then find ways to improve workflows just to make sure you have enough workers available.
In its Property Industry Remuneration Report, Andiev noted that staff shortages were playing a role in pay growth in the industry.
The Avdiev survey revealed pay growth in the property industry rose by an average of five per cent overall in 2022, outpacing the 3.6 per cent wage rise in the broader economy, and the highest annual growth since 2007.
Staffing remained the biggest challenge for the property industry, with 35 per cent of businesses surveyed nominating this as their top issue for the year, from dealing with wage growth and talent retention, to difficulty in finding staff and maintaining adequate staffing.
Australia’s population grew by 2.2 per cent to 26.5 million people in the 12 months to 31 March this year, according to data released by the Australian Bureau of Statistics (ABS) this week.
Net overseas migration was driven by a large increase in arrivals (up 103 per cent from last year to 681,000) and only a small increase in overseas migrant departures (up 8.8 per cent to 226,600).
This pattern, low departures in particular, is a catch-up effect after closed international borders, as international students return with only a small number departing because very few arrived during the pandemic, according to the ABS. This effect is expected to be temporary as the number of departures will increase in the future as temporary students start departing in usual numbers.
Natural increase was 108,800 people, a decrease of 18.5 per cent from last year. There were 301,200 births and 192,300 deaths registered during this time, with deaths increasing 7.9 per cent and births decreasing 3.4 per cent. COVID-19 mortality was still a contributor to an increased number of deaths.
Mr Kuestenmacher said certain property classes, specifically residential property classes, are closely linked to age groups as we go through the life cycle.
“If you’re in the purpose-built student accommodation space, you will have to marvelous 10 years ahead, because as Asia continues to grow as Asians continue to become richer and more urbanized they send their kids overseas on English speaking education,” he said.
“The family formation stage of the lifecycle is very, very big because all of a sudden, Millennials make babies they hunt three-to-four-bedroom homes. Millennials leave the inner city hispter apartments behind.
“They go to wherever they find three and four bedroom homes, those homes are overwhelmingly on the urban fringe.
“So millennials have to move far away to the outskirts of town even to regional Australia.
“That trend will continue in the short and medium term, uninterrupted.”
Mr Kuestenmacher said the downsizer cohort is growing.
“These 75- to 84-year-olds, that is the most attractive property group in in the coming years in the short term in particular, marvelous opportunities out there.”