You are here
Scaling new heights in China’s property and construction sector
Although recent reports indicate a slowdown in investment and development within the China property sector, Michael Page Property & Construction Outlook suggests that the future still looks bright from a hiring standpoint.
China’s property and construction sector is set for continued, healthy expansion. A trend confirmed by Michael Page’s 2015 Salary and Employment Outlook expects 71% of property and construction employers in Hong Kong, Taiwan and in mainland China to increase headcounts, mostly for junior to mid-level positions.
Property and construction is critical to China’s overall economic growth by a substantial margin. Building residential and commercial projects drive the demand for steel, copper, cement and other basic materials. According to the Financial Times, the property market in China also accounts for about 23% of gross domestic product when sales, outfitting and other linked industries are included.
The balancing act of supply, demand and government regulation
The China real estate and construction job market will continue to be mainly impacted by two key macro-drivers: supply and demand for each real estate asset class type and government policy geared to stimulate or tighten each sector accordingly at a central, provincial and city level.
In recent years and invariably moving forward, the warehouse property job market will continue to be healthy given the demand from end-users. Additionally, there has been an increased requirement for real estate professionals to be based in Mainland China to focus on the outbound initiatives due to the influx of capital investment into foreign property markets from both private and institutional Chinese investors. The key players in this area are domestic real estate developers, and agency firms representing private and institutional investors acquiring residential units, land or secondhand projects abroad.
Additionally, project-level construction, leasing, marketing and operation talent is still highly sought after by landlords for non-Tier 1 city developments. From the end-user side of real estate, although there has been a clear slowdown in China sales turnover and store expansion footprint for high-end luxury brands, we have seen a continuous demand for store development, fit-out and maintenance talent from F&B, fast fashion, affordable luxury, sportswear and lifestyle retailers as they continue to thrive in mainland China. On the contrary, there is a comparatively low demand for talent in the residential and hospitality sectors as supply has exceeded demand in many cities.
Diversification is key
The oversupplied residential inventory levels across most Tier 1 to 3 cities have had evident impact in hiring trends. Notably, investors and developers who are still in business that previously rode the residential development wave in China, have now diversified their market approach by investing in other property types. This includes mixed use developments, warehouses, hospitality, serviced apartments, retail and/or commercial offices.
This particular trend has transformed the employment landscape in this segment of China’s real estate industry, specifically investors, developers and service providers. A vast majority of the professionals who are still working in the Chinese property and construction sector, who were previously an intricate part of the residential boom, have transitioned into specialists of different property types, aligning themselves with the mainland investment and development trends.
Professionals previously focused on the investment, construction and/or sales of residential developments have predominantly been retained by their current employers to assist in their non-residential projects, or have been made redundant, subsequently leading them to seek external employment.
In both scenarios, there has been a learning curve for both employers – especially those that are new to non-residential development – and employees as they tread into new real estate territory.
A transforming landscape
China’s property sector is undergoing a notable transformation, from a market of rapid growth through unprecedented investment levels and demographic gains, to an era of moderate growth driven by regulatory streamlining and decreased speculative capital deployment. With this said, the world’s second largest economy will continue to yield healthy opportunities to capitalise on for strategic players with a long-term perspective seeking to add value to the ever-changing Chinese built environment.