Why Property Management Jobs Are the Ideal Roles in a Recession
Is the UK heading for a recession? There are mixed sentiments in these uncertain times. But if we do downturn, property management jobs are likely to be resilient.
Property Management Companies and Candidates Should Prepare for Growth
Property management jobs are likely to be a growth area in the coming years. Population growth and affordability of residential property are spurring growth in the private rented sector. The Build to Rent (BTR) sector is growing rapidly, as institutions seek to create income flow in a low interest rate environment. But what if we head into a recession? What then for property management jobs?
Is the World Heading for a Recession?
With trade wars, geopolitics and Brexit among other factors affecting the world economy, slowing growth is on the cards. Some would say that a recession is overdue, after the longest unbroken period of global economic growth in living memory.
In Europe, the French economy is faltering, Spain’s growth has been slashed, Italy’s economy is inching south, and Germany is gagging for oxygen. China is chugging along rather than steaming forward.
Here in the UK, we experienced the first quarterly contraction for seven years. Business sentiment is poor, with concern heightened by the growing possibility of a no-deal Brexit.
Property management companies tend to do well when the going is tough. There are exciting opportunities in property management today, and it’s likely that these types of property management jobs will continue to be available whatever the economy does.Alex Moore, Director - Real Estate Services
What Might Recession Look Like?
Based on previous recessions, there are some patterns that remain pretty constant. For example, recession brings job losses, though in each recession those job losses have occurred to a larger or lesser degree in different industries. But, those with higher skills tend to fare better in recessions than lesser-skilled workers.
Sectors that tend to be among the worst affected by recessions include mining, energy, manufacturing and construction. Services and staples tend to fare much better. People need food. They need healthcare, and they need education. Consumers find it easier to slash spending on nights out than they do on food – it’s cheaper to cook your own.
Recessions Have Been Good News for Property Management Companies
During downturns, people are far more hesitant to spend when they don’t need to. One area we see this is in the housing market. People become fearful that they will lose their jobs. They become less inclined to buy their own home, knowing that, if they lose their jobs, they will at least be able to claim housing benefit on rental properties. So, people turn to renting instead.
Credit becomes harder to secure during recessions. People find it harder to secure mortgages. Even those who are ‘brave enough’ to buy a house may not be able to secure the funding they need. So, again, they turn to renting.
The result is that the private rented sector (PRS) tends to grow during economic downturns. Property management companies tend to do well when the going is tough. There are exciting opportunities in property management today, and it’s likely that these types of property management jobs will continue to be available whatever the economy does.
A Recession May Make It More Difficult to Recruit
If a recession hits, it could be that job losses lead to some very talented people coming onto the market. This could help to combat the current skills shortage – there are currently only around 1.6 unemployed for every job vacancy in the UK.
However, there is also another phenomenon that affects recruiting companies during recessions: the most talented people are less likely to move. They become more reticent to seek another job because of the perceived insecurity of starting on a new role. The RICS and Macdonald & Company Rewards and Attitudes Survey 2019 found that 37% of professionals in the real estate and built environment feel they are likely to move jobs within 12 months. If the economy does suffer a prolonged downturn, we would expect that percentage to decrease.
For recruiters and job seekers alike, now is the time to make your move:
• For recruiters, the availability of the best and most talented people in property management is likely to contract if the economy contracts, as people become more reluctant to move
• For job seekers, the skills shortage in the current jobs market means that your talent is in high demand
Whether you're a recruiter or a job seeker, for a confidential consultation contact the Real Estate Services Team at Macdonald & Company. We are here to help through all market conditions.