A 'new' property crisis
A real crisis has developed in the property industry due to the lack of students seeing property as a career choice. That situation will worsen sharply over the next few years. The property business is now one of the greatest opportunities available in Ireland for anyone choosing a career.
School leavers still regard the sector as "toxic" and do not understand that there are jobs available immediately for anyone graduating. This misconception has got so bad that only 10 students started this week in the first year of the Property Economics Course at DIT Bolton Street, which is the main source of graduates into the commercial property sector.
Martin Hanratty, Head of Real Estate told me that 32 students graduated this year and those that wanted them have readily found jobs, mostly in Dublin. The graduate problem will worsen sharply as just 22 students will graduate this year, 18 next year, 13 in 2016 and 10 in 2017.
On the other hand the estate agents have been steadily increasing the total numbers they employ as business improves. You might be surprised to hear that some of the larger firms are already back at the same numbers of employees as they had during the boom.
A big factor in this has been the ramping up of Ireland's largest ever outsourcing operation.
As a result of the property crash, a massive shift in property ownership has taken place with NAMA and the banks finding themselves holding vast amounts of property.
Even though values may have halved, or worse, all these properties need to be managed, leased or sold and that work is being outsourced to the estate agents, who are having problems providing good staff to handle the work.
My enquiries indicate that this year's graduates have walked into jobs on salaries in the order of €22/23,000 a year. Within a couple of years I suspect that the top graduates will have their pick of jobs at up to €30,000 p.a.
Aoife Brennan at Lisney told me they had taken on seven graduates and may need similar numbers next year.
Savills recruited six graduates and their total numbers are now in excess of the 250 staff at the peak. Colette Cotter at DTZ Sherry FitzGerald said the group took on 12 graduates, half in residential and half in commercial.
Margaret Mulholland at JLL said they had taken on four graduates and that total staff numbers are back at the 2007 peak. Deirdre Bodley at CBRE confirmed they had employed 11 graduates this year and expect that trend to continue next year.
Another issue is that because property courses are out of fashion the CAO points requirements, for example for DIT above, have fallen from over 400 to just 300.
This makes the courses look unattractive to students who may feel that they would be "wasting points" going into property. Another challenge now for the colleges is to maintain standards.
The advent of The Property Services Regulatory Authority is closing off another source of manpower which was to bring in people from other professions eg marketing and law. This is because in order to be licensed in the industry, staff must have minimum property qualifications.
However, Pat Davitt, Chief Executive of the IPAV, tells me that they launched a new course with Institute of Technology Tallaght this week, which is the first Level 6 course to be approved by the Regulator. At Limerick Institute of Technology, Maria Kyne, Head of Faculty, said they also have very small numbers.
Most of her second year students already have job offers. NAMA too are complaining of manpower problems and losing staff to the private sector, especially post the "Haddington Road Agreement." NAMA has lost 27 staff this year and are actively recruiting.
There are great opportunities too with corporates like Google, BSkyB, PayPal, Facebook and Paddy Power who are recruiting in-house property teams.
Students should look at all course options and visit the Society of Chartered Surveyors Ireland (SCSI) stand, today or tomorrow at the Higher Options Fair at the RDS.
The SCSI must focus on explaining what a Chartered Surveyor actually does. Several firms have begun recruiting efforts in the UK and western Europe. One company is looking at recruiting in the US and the Property Regulator may soon find himself puzzling over academic qualifications from far and wide.
Amazingly the property industry is going exactly the same way as the IT sector did, post collapse, with a lack of graduates and recruitment shifting abroad.