Wednesday, 16 May 2012

Jobs losses hit real estate as market deteriorates

THE real estate sector is in the grips of a ''white-collar'' crisis, with more than 200 workers made redundant across the industry as deals collapse and development projects dwindle.

Job losses are tipped to swell in the near future as companies look to cut costs to reach earnings forecasts.

The losses are not only among back-office staff, but finance directors and senior management. Even chief executives are being forced to take pay cuts and work under tighter incentive pay regimes.

The trigger has been a reduction in large-scale transactions and weak conditions in the construction and residential development sectors.

Because many of the staff have left on redundancy packages, they are unlikely to be eligible for government benefits so the numbers will not appear in the national employment statistics.

Recruiters say this is a concern as it will send a message that the national economy is performing better than it is.

In the past week Dexus and Stockland have each laid off 45 people across several divisions. This follows a round of departures in the past few months from AMP's property division as it streamlines its funds management business.

Analysts have suggested further job losses are on the way as companies look to cut costs in the lead-up to the end of a tough financial year.

The settlement of the Centro court action is also expected to trigger management restructuring and staff cuts. Management and recruitment consultant Rita Avdiev said her firm had seen a big increase in inquiries for advice this year.

''For many people, it's not a question of the money - as most get a redundancy package - it's about what do they do now,'' she said.

''Real estate is a very tightly held market and losing a job is like losing their identity amongst their peers.

''In our last survey, respondents overwhelmingly said wage policies have been tempered, with many saying they had a minimal pay increase or a freeze on senior salaries, and predict the same for next year.''

The average pay rise in the six months to the end of February was 3.5 per cent, which is just keeping up with the rate of inflation.


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