31 July 2002 Huge opportunities in property management and valuation but industry not seen as 'sexy'

A shortage of degree-qualified professionals is impacting on the property management industry worldwide, says Senior Lecturer John McDonagh of Lincoln University's Property Group, just back in New Zealand from overseas study leave.

"There is a skills shortage internationally making it difficult for the industry to keep pace with the demand for its services," he says.

"Across the world those in the industry are saying that the problems lies in how school-leavers perceive the property field. It's believed that it is not seen as 'sexy' enough by high school students in comparison to other career options.

"Their perception of the industry seems to be dominated by the image of residential real estate salespeople – a career not always seen in a positive light, especially if a family has had a 'bad experience' either buying or selling a house.

"And this perception is not helped by the recent plethora of reality television shows, some of which have not portrayed a very helpful view of the property industry."

Mr McDonagh visited leading universities and institutions in Australia and the United Kingdom which offer real estate courses forward from secondary schools to take up property degree courses.

"However it is not the residential sector that is crying out for more degree­-qualified property professionals. It is for staff to fill roles in portfolio and asset management, property development, specialised and computerised valuation services, and shopping centre management specialists.

"Many high school students are unaware that these careers exist, and if they do then they are not aware that a property degree is now the key requirement for entry."

An additional problem for New Zealand is that the overseas shortage is resulting in our best graduates being 'poached', especially by Australia.

New property graduates are commonly starting on salaries in excess of AU$50,000 and Australian organisations are increasingly aggressive in targeting students well before they finish their degrees so that they can get the jump on the competition for the best students.

This is also becoming common in the UK with students either working part­-time and studying fulltime or working fulltime and studying part-time in the final year of their degrees.

The outcomes of this type of arrangement are seen as positive by the students, the employers and also the university lecturers.

The lecturers see a higher level of commitment and insight in the students who already have a 'foot in the real world'.

London is a popular destination for Lincoln University property graduates who can be found working in the corporate, investment banking and retail development sectors.

Salaries in these professional positions are far greater than those that can be earned in the traditional 'OE' occupations of 'temping' or bar work.

International organisations such as Ernst and Young, CB Richard Ellis and Colliers will often offer graduates secondment to their various offices around the world and this can help ease the visa and work permit problems that may otherwise arise.

Further exciting opportunities for recent property graduates also exist in the new emerging economies of Eastern Europe.

While in the UK Mr McDonagh attended the European Real Estate Society Conference attended by over 200 delegates. A number of participants were from the 'new economies' of Estonia, Belarus, Slovenia and Poland and they reported that while they had plenty of engineering, construction and architectural graduates there was a shortage of those qualified in weaving together the needs of property occupiers, developers, financiers and public infrastructure providers.

"Such property professionals were not necessary under the old centrally controlled economies and the lack of a well-established property profession and a pool of graduates was now holding back substantial development," he said.

"These emerging economies see the modern property practices of the United States, Australia and New Zealand as more appropriate for adoption – for example, short term net leases – than some of the old traditions of the United Kingdom such as 25-year office leases and 99-year ground leases.

"While it is comforting that other countries are experiencing the same shortage of property graduates as New Zealand, it does exacerbate the problem.

"With the current exchange rate and the strong Kiwi tradition of 'OE' many of our best students will be 'poached' and while they may eventually return a new graduate shortage will still exist.

"The only solution is to increase the supply of new property graduates so that it meets the needs of our own industry after allowing for some loss overseas."

Ian Collins, Journalist, Lincoln University, Canterbury, New Zealand.