Graduate Employment Trends in Construction and Property Surveying

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2 Introduction In 2012, a number of members of the Society began to voice their increased struggle to find qualified graduate surveyors to fill vacancies in their practices. Having gone through the difficult process of downsizing their firms because of reduced workloads, surveyors across all disciplines had expected that it would be relatively easy to replace lost staff as the volume of new work picked up. At the same time, members working in academic institutions reported a severe reduction in the number of students enrolling on surveying courses at third level. Since increasing the capacity of courses to cope with high levels of interest in construction and property surveying during the so-called Celtic Tiger period, enrolments have been falling and interest in surveying as a profession has been waning. This report, the first such report undertaken by the Society, quantifies for the first time the scale and consequence of these diverging trends. When growth returns to the sector, the first beneficiaries of the upturn will be graduate surveyors. Already a shortage of such graduates has been felt in the property sector and will shortly follow in construction surveying. Those entering construction and property surveying courses now are ideally placed to enter a profession during a period of recovery and expansion. Having been trained in a variety of transferrable skills, the new intake of graduate surveyors are well-positioned to bring their skills to work at the heart of a changing market. None of us want to return to 2007 where Ireland struggled to support an over-heated property market and overgrown construction sector. But nor do we wish to see the capacity and professionalism of the sector continue to be eroded. Without new entrants into the profession, erosion is inevitable, but with a new generation of young surveyors, the property and construction sectors can play their part in helping Irish economic growth. We hope that this report will highlight to parents, potential students and career guidance professionals, that surveying as a profession has shown more resilience, flexibility and pragmatism than many expected. It is a profession for life, and we hope to welcome more graduates into it in the near future. Roland O Connell President Society of Chartered Surveyors Ireland James Gahan Chair, Education Standing Committee Society of Chartered Surveyors Ireland

3 Contents as a Profession 2 Executive Summary and Key Findings 3 Part 1: Employment in 6 Measuring Employment Amongst Chartered Surveyors Measuring Construction Employment 10 Measuring Property Employment 11 Part 2: New Graduate Surveyors 12 Applications for Surveying Courses 12 Enrolments on to Surveying Courses 14 Part 3: Future Trends in Construction and Property Employment 15 Assessing a Sustainable Number of Chartered Surveyors in Ireland 17 Part 4: Conclusions 21 Appendices 22 Appendix 1: Surveying the Surveyors 22 Appendix 2: Third-Level Courses 23 1

4 as a Profession Chartered Surveyors undertake a wide range of professional roles within the construction and property sectors, including quantity surveying, building surveying, project management, property and facilities management, valuation, estate agency and planning and development surveying. Surveyors offer a diverse set of professional skills on both a business-to-consumer and business-to-business basis. Within the construction sector, surveyors are central to advising clients on the costs of development, project management, carrying out building surveys and undertaking design consultancy. Within the property sector, surveyors provide professional advice on the valuation, management, letting and sale of commercial property (including agricultural and development land, and office, retail, industrial property) and residential property. The diversity of professional services offered by surveyors is reflected in the wide breadth of the content of third level surveying courses. Surveying courses are run by institutes of technology across the country, and comprise of a range of subjects to prepare graduate for professional careers in the property and construction sectors. Construction courses comprise of technical skills including: building technology measurement quantitative methods and analysis construction management cost and value management computer aided design tender documentation Property courses comprise of technical skills including: valuation property management and marketing taxation investment analysis asset management mapping construction studies architecture financial and statistical mathematics In addition to technical skills, construction and property students are also exposed to a wide range of relevant and transferable subjects such as: economics law information technology business management 2

5 Executive Summary and Key Findings In July 2012, the Society of Chartered Surveyors Ireland (SCSI) carried out a survey of its members to identify the market and employment opportunities for graduates emerging from property and construction surveying courses. At the same time, an examination of applications and enrolments onto such courses took place which has enabled the SCSI to predict the number of graduates who may enter the profession over the next three years. The research identified that a shortfall of graduates entering into the property sector from SCSI-accredited courses has already begun and that a shortage of graduates will begin to emerge from construction courses to supply employers demands by mid Some of the key findings from the research are on the following pages Outlook for Construction Surveying During the period , construction surveying employment fell by over 60% with graduate surveying alone falling by 81%. There was a 66% decline in the number of CAO applicants for construction courses since the peak suggesting that the number of graduates will soon fall short of demand. While the number of graduates in the construction sector has remained relatively high, members experience is that many have emigrated or sought employment in other sectors making them unavailable to take up surveying positions which will soon become available. We expect increased levels of activity in the construction sector in 2013 and beyond and as the sector moves towards more normal levels of output for an economy our size, employers in the private and public sector are going to need more construction graduates. Quantity Surveying is a very diverse career option and for people who are genuinely interested in the technical, financial and project management aspects of building and infrastructure projects, quantity surveying offers a variety of opportunities both in Ireland and internationally. Andrew Nugent, MD, Andrew Nugent & Associates 3

6 Activity levels in the construction sector are likely to increase in 2013, driven by demand for the refurbishing existing buildings for energy efficiency purposes, and through overseas investment in new Irish commercial property by expanding international purchasers. 1 Based on procurement and design processes, it is estimated that new construction work on roads, hospitals and schools, funded through the Government s August bn stimulus package will commence in mid to late While the bulk of the employment generated through the increased investment in construction will be amongst site-based operatives, it will have a positive impact on the demand for professional services such as surveying. Chart 1 shows the fall in construction surveying graduates between 2011 and 2014 compared to an expected increase in employment for construction surveying graduates at the end of 2012, as reported by members. Chart 1: Construction Graduates and Employment in Surveying Number of graduates % of peak employment Jul-11 Dec-11 Jul-12 Dec Construction Graduates (number) Construction Employment (% peak) Outlook for Property Surveying Between 2007 and 2011, employment in property surveying fell by 43% and has remained relatively stable over the last year; with small increases in the number of senior surveying and administrative roles offsetting 2% to 3% declines in junior and graduate roles. There was an 86% decline in the number of CAO applicants for property courses since the peak. 1 SCSI The Irish Construction Industry in 2012 report. Similar sentiments have been expressed by John Moran, Department of Finance (Speech to Irish Life Pensions Conference: September 2012) and Brendan McDonagh, NAMA (Speech to CIF Conference, September 2012) 4

7 Market reports over 2012 have suggested that an increase in the volume of residential, commercial and industrial property transactions are likely to take place in 2013, as the improved competitiveness of the market coincides with increased international investor sentiment and consumer confidence. This will have a positive impact on the workload of surveying practices and will lead to increased demand for graduate surveyors. Chart 2 shows that the decline in the number of graduates from property related courses and the likely increase in employment in the sector, as reported by members, has already led to a shortage of graduate surveyors available to take up employment opportunities. A survey of SCSI member firms future work programmes has indicated that both the construction and property sectors are showing signs of returning to increased levels of activity. This increased activity amongst construction and property surveyors and their clients will lead to employment opportunities, especially amongst graduate surveyors where the downturn in employment since 2007 has been most acute. Chart 2: Property Graduates and Employment in Surveying Number of graduates % of peak employment Jul-11 Dec-11 Jul-12 Dec Property Graduates (Number) Property Employment (% peak) The number of graduates coming through has been way down on recent years and, ironically, it comes at a time when there is a real requirement for professionally trained property people. James Nugent, Managing Director, Lisney 5

8 Part One: Employment in The period between 1995 and 2007 saw huge increases in the volume of construction and real estate activity in Ireland. The reasons for the growth in activity are well-known. Strong levels of cheap credit, full employment and healthy demographics created an economic context for large construction and property bubbles to develop. At the peak of the construction sector, output accounted for around 30% of all economic activity in Ireland; twice the internationally-recognised sustainable level of output. 2 Between 2000 and 2007, annual house-price inflation averaged 11% and new house-building increased to a peak of 80,000 new developments while the volume of property transactions soared. 3 As a result, employment in construction and property professions grew rapidly, so that by the time of the 2006 Census, over 13,000 people were employed in real estate activity and 21,000 were employed in architectural, engineering and related technical consultancy, including quantity and building surveying. 4 Of these, approximately 6,000 were employed as construction and property surveyors. 5 In order to sustain both the property and construction sectors, Ireland experienced significant immigration of workers, especially from the new EU accession states. There was a strong increase in the number of third-level surveying courses, along with increased investment by government and institutes of technology in construction and property courses leading to greater capacity to cope with the large increase in students enrolment. 6 By the 2011 Census, the construction and property booms were well and truly over, and the construction industry in particular experienced a painful rise in unemployment, especially amongst on-site construction operatives and allied trades, amongst whom unemployment rose to 43%. 7 Professional services, however, sustained employment levels better than on-site operatives. Census 2011 recorded unemployment amongst professional services at 17.1%, some 2% lower than the equivalent national unemployment rate. 8 2 SCSI report The Irish Construction Industry in 2012 (July 2012) 3 Economic and Social Research Institute ( 4 Central Statistics Office: Census 2006; Census 2011 ( 5 The number of surveyors practicing in Ireland is based on the membership numbers of relevant professional bodies 6 Funding for third-level institutions is provided by the Higher Education Authority (HEA) 7 Census Unlike the CSO Quarterly National Household Survey, the Census includes those seeking their first employment amongst the unemployed. This explains why the unemployment rate reported by the Census is some 5% higher than the CSO data for the same period. 6

9 The real estate sector, by its nature, is less labour intensive than construction and as a result it did not experience the same large-scale growth in employment which was experienced by the construction sector. The impact of the downturn on employment amongst property professionals has been less severe than in construction, so that while unemployment in the sector rose from 2% to 10% between 2006 and 2011, it was still significantly lower than the national average (as recorded by the Census) of 19%. Like all professional service providers, the surveying profession has seen a flight of skills as emigration amongst trained graduates has increased since the start of the recession owing to the negative economic situation. Graduate surveyors felt the brunt of the recession and were hit hardest in terms of unemployment. Table 1: Evidence from the Census: Employment in Construction and Real Estate Architectural, engineering activities and related technical consultancy 2006 Census 2011 Census Change Employed 21,106 17,435-3,671 Unemployed 464 3,605 +3,121 TOTAL 21,570 21, Unemployment rate 2.2% 17.1% +14.9% Real estate activities 2006 Census 2011 Census Change Employed 13,089 10,850-2,239 Unemployed 255 1,244 +1,019 TOTAL 13,344 12,094-1,250 Unemployment rate 1.9% 10.3% +8.4% National Unemployment rate 8.5% 19%* +9.5% * It is important to note that the Census definition of unemployment includes those seeking their first job (i.e. they are not in education, employment or training). These groups are excluded from the normal quarterly CSO calculation of unemployment. Thus in mid-2011, unemployment as recorded in the Census was 19% and in the Quarterly National Household Survey was around 14%. Irrespective of the method used, unemployment levels are lower in the surveying profession than in the wider economy. 9 Census 2006; Census

10 Measuring Surveying Employment In July 2012, Chartered Surveyors working in private practice were asked to state the level of employment in their firm at three historic points over the last few years: July 2007 July 2011 July Surveyors were also asked to forecast the likely employment levels in December 2012, i.e. in six months time. In total, 1,122 surveying professionals were accounted for; representing one-quarter of the current membership of the Society of Chartered Surveyors Ireland. Respondents categorised employment into four grades: senior surveyor graduate junior surveyor administrative staff This six-month forecast gives an indication of overall employment on the basis of predicted workloads in the near future. As much of the employment in private practice is dependent on the flow and volume of successful tenders, making any longer-term projections would lead to potentially inaccurate results. The findings of this survey are set out below in Chart 3. The level of employment in July 2007, the peak of the market, is benchmarked at 100%. 10 The employment levels thereafter are given as a percentage of that peak figure. This allows the trend in employment across all grades to be more accurately compared, and the differences between the construction and property sectors more accurately analysed. Chart 3: Index of Employment in Surveying (Construction & Property): (July 2007 = 100) Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Senior Junior Graduates Admin 10 The selection of 2007 as the peak of the sectors is discussed later in the report. 8

11 The chart is set out in table format below. The date of the survey was July 2012, and therefore the December 2012 figures are future estimates rather than historical recording. Table 2: Index of Employment in Surveying (construction & property) Senior Junior Graduates Admin Average July % 100% 100% 100% 100% July % 37% 25% 53% 44% July % 30% 24% 51% 41% Dec % 32% 31% 52% 44% The correlation between activity and employment is borne out by these results. Between 2007 and July 2011, as activity levels fell, employment in surveying fell by 56% and by a further 3% in the year to July This 3% decline was mostly confined to surveyors working in the construction sector. Forecasting to the end of 2012, it is likely that both sectors of the profession will see some return to employment growth. This employment growth will be strongest amongst graduates and junior surveyors who took the brunt of the decline between 2007 and While capital and rental values in Irish property are unlikely to change significantly in either direction in 2013, the level of activity in the market provides a useful indicator for predicting demand for professional services. Market reports over 2012 have suggested that an increase in the volume of residential, commercial and industrial property transactions are likely to take place in 2013, as the improved competitiveness of the market coincides with increased international investor sentiment and consumer confidence. 11 In the construction sector, activity levels are likely to increase in the field of refurbishing existing buildings for energy efficiency purposes, and through overseas investment in new Irish commercial property by expanding international purchasers. 12 Based on procurement and design processes, it is estimated that new infrastructural construction work on roads, hospitals and schools, funded in part through the Government s August bn stimulus package will commence in mid to late While the bulk of the employment generated through the increased investment in construction will be amongst site-based operatives, it will have a positive impact on the demand for professional service skills such as surveying. The next section of the report looks in more detail at the individual sectoral trends in construction employment and property employment. This detailed sectoral-level analysis is important as surveyors workloads (on which employment is dependent) is determined by different influencing factors, such as client investment and broad economic conditions. 11 CBRE Irish Capital Market Values report (Q2 2012) 12 SCSI The Irish Construction Industry in 2012 report 9

12 Measuring Construction Employment Chart 4: Index of Employment in Construction Surveying: (July 2007 = 100) Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan Senior Junior Graduate Admin Table 3: Index of Employment in Construction Surveying Senior Junior Graduate Admin Average July % 100% 100% 100% 100% July % 35% 20% 47% 39% July % 26% 19% 41% 34% Dec % 29% 33% 43% 39% As Chart 4 and Table 3 show, the bulk of the job losses amongst surveying professionals between 2007 and 2011 was accounted for by the construction sector. During that period, construction surveying employment fell by over 60% - graduate surveying alone falling by 81%. During 2012, employment of construction surveyors experienced a much shallower decline. Between July 2012 and early 2013, surveyors expect the pipeline of new construction work to increase and to have an immediate and positive impact on demand for professional surveying services. This is reflected in the significant upward movement in employment from July

13 Measuring Property Employment Chart 5: Index of Employment in Property Surveying: (July 2007 = 100) Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan Senior Junior Graduate Admin Table 4: Index of Employment in Property Surveying Senior Junior Graduate Admin Average July % 100% 100% 100% 100% July % 45% 43% 56% 57% July % 43% 40% 58% 57% Dec % 47% 44% 60% 60% As Chart 5 shows, employment in property surveying has fallen to a less severe extent than employment in construction (Chart 5). Between 2007 and 2011, property employment fell by 43% and has remained relatively stable over the last year; with small increases in the number of senior surveying and administrative roles offsetting 2% to 3% declines in junior and graduate roles. While a small decline (-1%) is expected in the employment of senior surveyors through retirement and natural wastage, each of the other three grades will see upturns over the next few months graduate opportunities alone increasing by 4%. From Charts 4 and 5, it can be seen that graduate employment experienced the sharpest fall from the peak in 2007 through to Indeed, the overall pattern of employment during this period seems to have been that senior surveyors and administrative staff maintained employment levels while junior surveyors and graduates experienced greater levels of job-loss. These latter two categories of surveyor, however, are likely to be the greatest beneficiaries of growth in the sector in the months and year ahead. 11

14 Part Two: New Graduate Surveyors The second part of this report analyses the numbers of new graduate surveyors who are entering the profession, and whose skills and technical professional services will be called upon by clients when the expected increase in market activity takes place in late 2012 and into By analysing the flow of students from SCSI-accredited courses, a good estimate can be made regarding the future number of surveyors expected to graduate and enter the profession. Applications for Surveying Courses Graduate surveyors entering the profession do so through a number of specialised construction and property surveying courses. Two sets of independent data show the trends in thirdlevel activity. First, the number of applicants for courses is recorded by the CAO system and gives a useful indicator of students sentiment towards the sectors or the profession. 13 Second, the actual number of enrolments onto the courses gives a good indicator of the likely flow of graduate surveyors into the construction and property sector in any given year. 14 Charts 6 and 7 show the number of CAO applications for SCSI-accredited construction and property courses offered by Institutes of Technology in Ireland. More detail on the courses are set out in Appendix 2 of this report. There has been a significant decrease in applications for surveying courses in recent years, driven by negative sentiment towards future employment opportunities. It is also evident that such sentiment is overly negative, and sentiment seems to follow the performance of the sectors rather than the levels employment sustained in those sectors. To show this trend, while employment amongst surveyors in the property sector has fallen by half since 2007, the number of CAO applicants on to property and construction related courses has fallen by 86%. 13 Source: Institutes of Technology supplied the Society with relevant information for both applications and enrolment levels over this period. 14 In addition to SCSI-accredited courses, there is a small number of property and construction courses at third-level which are not accredited by the Society but yet produce graduates who may find work in the profession. At the peak, these courses provided places for a maximum of 80 students per year, and have mostly been discontinued since It should also be noted that graduates may decide to undertake further study, enter a different profession or seek employment outside of Ireland. This dataset therefore only gives an indication of the flow of graduates into the sector. Furthermore, mature entrants into the profession may emerge through non-traditional educational routes. 12

15 Chart 6: CAO Applications for Third-Level Construction Courses Chart 7: CAO Applicants for Third-Level Property Courses The number of applications to construction courses peaked in 2008, representing the first intake on to a number of new courses which were commenced in CAO applications are sentiment driven in that they reflect the students interest in the type of courses which they may wish to undertake if they can successfully enter third-level education. The process of applying and enrolling on a specific course moves that decision-making process even further, so that by examining the number of enrolments, it is possible to understand the number of graduate surveyors who will, after completing the four-year course, enter the market. 13

16 Enrolments on to Surveying Courses As applications for surveying courses have fallen, so too have actual enrolments on to the courses. Charts 8 and 9 show the number of enrolments on to construction and property surveying courses from While the trend lines in the two sectors follow a roughly parallel downward trend, the enrolment levels on to construction courses has always been consistently higher than on to property courses. The charts clearly show a decline in enrolment on to construction and property courses in 2011 of about 50% since the peak. As the number of enrolments fall, so, over time, the number of new graduates will also decline, creating a long-lasting legacy of falling new entrants into the sector. Chart 8: Third-Level Enrolments on to SCSI-accredited construction courses Chart 9: Third-Level Enrolments on to SCSI-accredited property courses

17 Part 3: Future Trends in Construction and Property Employment Chartered surveyors are involved in construction and property projects from their conception. As a result they are often amongst the first professions to benefit from new projects, and so when activity returns to the market, there will be a consequent rise in demand for project costing, valuation, project management and other technical professional skills offered by surveyors. In the property sector, as noted earlier, measuring the changing volume (as opposed to value) of property transactions is a useful guide to assessing the workload of property surveyors. As the movement of the property market begins to speed up in the future, the demand for property professionals technical and advisory services will also increase. It is expected that a supply and demand gap will emerge in the surveying profession, with rising demand for graduates to work in the construction and property sectors and falling numbers of new enrolments and consequently new graduates available to fill these employment opportunities. Based on enrolment numbers from 2008 to (Charts 8 and 9), and graduate employment forecasts (Charts 4 and 5) it is possible to show the future pattern of graduate employment in the surveying profession, and highlight the impending shortfall of graduates. In the construction sector, while the number of graduates has remained high, this does not account for a large number who have sought employment in different sectors or are working overseas thereby making them unavailable to take up surveying positions which will soon become available. From 2012, a rapid decline in the number of graduates will be met with an increased number of opportunities in In the property sector, a more immediate rebound in employment is taking place at the same time as a continued reduction in the number of new graduates. Recent legislative and regulatory reforms of the property profession provide that only property service providers who have the relevant qualifications can undertake certain property related activities. It is anticipated that there will be increases in enrolment on property related courses and thus support the demand for trained and qualified property professionals. While this is a welcome development, in the short term, it will have a consequence of further limiting the number of graduates available to enter the property sector and avail of employment opportunities that are currently emerging Property Services (Regulation) Act The Property Services Regulatory Authority regulates property services providers on a statutory basis. 15

18 In Charts 10 and 11, the annual number of graduates from SCSI-accredited courses is indicated by red bars. Employment is measured as a percentage of the 2007 peak and is indicated using a blue line. The number of graduates each year (red line) is based on the size of the cohort enrolling on those courses. All courses have a natural attrition rate and not all graduates seek employment in the sector these charts therefore represent the maximum number of graduate entrants into the sector each year. Chart 10: Construction Graduates and Employment (peak employment = 2007) Number of graduates % of peak employment Jul-11 Dec-11 Jul-12 Dec Construction Graduates (number) Construction Employment (% peak) Chart 11: Property Graduates and Employment (peak employment = 2007) Number of graduates % of peak employment 0 Jul-11 Dec-11 Jul-12 Dec Property Graduates (Number) Property Employment (% peak) 16

19 Assessing a Sustainable Number of Surveyors in Ireland As each country s property and infrastructural needs vary, there is no internationally recognised methodology for evaluating the appropriate level of employment of construction and property professionals at any given time. 16 Surveying is a diverse profession, offering a wide range of professional consultancy services to an equally wide spectrum of clients, and the exact blend of professional surveying services required at any time will be dependent on external issues such as market activity, clients requirements and demographic and economic activity. 2007, while representing the peak of the construction and property sectors, should not be seen as the aspiration for the future of the sector. Rather than seeking to maximise output, the performance of the sectors should be appropriately sized relative to the wider macro-economy large enough to meet the needs of diverse clients, but small enough to prevent crowding out other forms of economic activity. Thus, a sustainable construction and property sector is one which is neither too large for the economy, but not so small that it lacks the scale, diversity and capacity to suit clients needs. Construction It is generally accepted, that the optimum output of the construction sector in a country such as Ireland should be equal to 15% of the economy. Chart 12 shows the actual output of the Irish construction industry between 2001 and 2012 (blue line) contrasted with the optimum output equivalent to 15% of GNP. Thus, at the height of the industry in 2007, output was twice the optimum size while in 2012, is it half the optimum size. As Chart 12 shows, the optimum output of the construction sector today is roughly 18bn, equivalent to the output in CSO data shows that in 2009, the sector directly employed 156,000 people, compared to today s construction industry which has an output of 7.5bn and employs 98,000 people. Chart 12: Actual and Optimum size of the construction sector 17 (thousand euro) 45, , , , , , , , , Value of Construction Output Optimum value of Construction Output 16 A 2011 research paper by RICS Real Estate and Construction Professionals in India by 2020 provided a demand and supply assessment of surveyors specialised skillset in the built environment in India. Similar projects have been carried out in a range of other construction and property markets. The findings of those reports showed that any nation-specific methodological approach to estimating the required number of surveyors per country is of limited use outside of that case-study. Individual complexities including work practices, recognition of professional skills and demographics means there is no international norm on which to base specific forecasts. 17 Actual output is recorded by DKM Review of the Construction Industry and Outlook (DoEHLG: annual until 2012; thereafter SCSI); optimum output is taken as 15% of current market value GNP (ESRI Quarterly Economic Commentary) 17

20 As economic activity and employment are linked, it is possible to use data on the output of the construction sector to measure employment. If the construction sector in 2012 had been performing at an optimum level of output, employment in the sector would be some 58,000 higher than current levels. The recent decline in the number of graduates entering the construction sector is very concerning. We need to ensure that the brightest and best come into the sector to meet the new and complex challenges facing professional construction services firms working across international markets. Derry Scully, Chairman, Bruce Shaw Property Measuring performance of the property market is more complex, as a simple monitoring of output value does not capture the full extent of property activity. There are various statistics which can be used to evaluate how a property market is performing; these include the number of new housing completions, receipts from property transaction taxes, value of levies on new development, office and residential vacancy levels and the value of private investment in commercial property. 18 Each show the property market through a different prism and none accurately monitors the property market in its widest sense. Thus, no single indicator can be used as a proxy for the number of surveyors working in the property sector. House-prices peaked between late 2006 and mid 2007 and currently stand at less than 40% of peak prices. 19 The number of new completions shows a similar decline from the peak figure in November 2006 of 9,899 houses. 20 The latest data shows that around 600 houses or apartments are completed every month. 21 Stamp duty which accounted for 14% of all exchequer receipts in 2007 now accounts for 2%. 22 Investment in new office space and Irish commercial property more generally has seen a similar trend. While no official data is collected, real estate agencies publish regular reports from which a pattern in the market can be seen. According to these reports, investment turnover peaked in 2006 at a little over 3bn. It fell to 300m in 2008 where it has stayed until 2012, from which a recovery in 2013 and onwards is expected. 23 While each of these indicators tell a similar tale, they do not accurately account for changing levels of employment in the sector since 2006 to Instead, it may be more useful to look at the number of licences which were issued to auctioneers and house agents after a district court application process. The number of licences issued in any year provides a useful indicator to assess the volume of activity in the Irish property market. They are set out in Chart 13. Since July 2012, the issuing of licences for property service providers has been undertaken by the newly-formed Property Services Regulatory Authority (PSRA). The 2012 figure in the Chart show the licences issued under the district court licensing system and which will expire on the granting of new licences by the PSRA from Housing data is collected by a number of State agencies including the Department of Environment, Community and Local Government (completions, house prices) and the Department of Finance (property related taxes and charges) as well as private real estate companies (investment in commercial property). There is no uniform data gathering or reporting procedures, and some data is incomplete and incomparable. 19 Indicative changes in the sale price of houses are recorded by CSO; asking prices are recorded by and 20 Department of Environment, Community and Local Government 21 Department of Environment, Community and Local Government 22 Department of Finance exchequer statements (monthly) 23 Bannon Property Consultants (various reports, 2012). Other agencies show a similar trend. 18

21 Chart 13: Auctioneers Licences issued ,517 2,711 2,527 2,183 2,121 2, ,929 1, In 2006, there was a 15% increase on the previous year in the number of licenses issued to auctioneers operating in Ireland. This grew by another 7.7% to the peak in 2007, thereafter the number of licences issued declined so that there were fewer issued in 2012 than Using this data, it is clear that like construction surveyors, 2007 represents the peak of employment in property surveying, and the relatively shallow downward trajectory (compared to other property indicators) suggests that employment in the surveying profession has been relatively resilient. Using all of this sectoral and employment data, 2007 represents the peak of a property market which is now recognised to have been a bubble. 25 In the period up to 2007, house-prices rose at an unsustainable level and an inappropriately large number of houses were completed. 26 The reasons for this bubble have been explained by many commentators and include availability of credit, Ireland s demographic profile and weak banking and regulatory oversight. 27 The property market in 2012 is widely seen as under-performing, as the weak economy has driven down housing completions and property prices. The ongoing banking crisis and the economy has prevented mortgage application and draw-downs leading to lower than normal transaction levels. 28 Like the construction sector, a sustainable level of property activity lies somewhere between these two extremes. As the mid-way point between the unsustainably high level of output of 2007 and an unsustainably weak market in 2012, data from 2009 can be used to demonstrate a sustainable level of property pricing, transactional activity and sectoral employment. 24 Revenue Commissioners, Property Services Regulatory Authority 25 The Economist (16th June 2005). IMF reported in Irish Times, 8th August Morgan Kelly On the Likely Extent of Falls in Irish House Prices (ESRI, 2007) 19

22 In Charts 14 and 15 the blue bar represents actual employment in each surveying grade in The yellow bar represents actual employment in As the sectors move towards a more sustainable level of activity in the future, it is apparent that increased employment opportunities will emerge. Chart 14: Construction Surveying Employment in 2009 and 2012 (as a % of 2007 levels) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Senior Junior Graduate Administrative Chart 15: Property Surveying Employment in 2009 and 2012 (as a % of 2007 levels) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Senior Junior Graduate Administrative In both sectors, the largest gap emerging is amongst graduate surveyors. This means that as the sectors move towards more sustainable activity (as represented by 2009 employment levels) then the main beneficiaries of the increased demand will be graduate surveyors. This is also reinforced through the results of the SCSI employment survey of July 2012 which show the strongest immediate growth in employment taking place amongst graduate surveyors. 20

23 Conclusions Employment in construction and property surveying is tied to activity in the sectors. When activity increases, so clients demand for surveyors technical and professional services increase. In the property market, those demands are already increasing and surveyors in private practice expect an increase in employment to satisfy this anticipated need. Such opportunities will be mostly for graduate-level entrants into the profession. Analysis of activity amongst Chartered Surveyors in the construction sector suggests that similar demand may emerge as speedily as Meanwhile, based on weak sentiment and fear of future employment prospects, the number of students applying for and entering third-level surveying courses has fallen. Current enrolment data on to construction and property related courses forecasts a further decline in surveying graduates over the next four years. As the number of student applications and enrolments on to third-level courses falls, it is likely that capacity within the third level institutions will be further cut, leading to potential constraints within Ireland s third-level sector to cope with an increased demand for such courses in the short to medium-term. This will further exacerbate the difficulty in ensuring a supply of qualified graduates into the market. By undertaking this piece of research, the Society of Chartered Surveyors Ireland is endeavouring to ensure that those currently reviewing their career options, together with their parents and career guidance professionals, give due consideration to surveying as a career. It is a profession that has shown more resilience, flexibility and pragmatism and has a wide range of subjects taught on a variety of courses, enabling the development of core competencies as well as other transferable subjects, including law, economics and business management. Those who choose to enrol on construction and property surveying courses now will be ideally placed to enter a profession during a period of recovery and bring their skills to work at the heart of a changing market. We will be taking on 12 graduates this year (in addition to 11 last year) and that is a considerable proportion of all the graduates coming on stream, so I would have a huge concern that there will be a major skills shortage in the sector sooner rather than later. Angus Potterton, Managing Director, Savills 21

24 i Surveying Appendix 1: the Surveyors In July 2012, an online survey of Chartered Surveyors in private practice was undertaken. The survey recorded employment across four headings: Senior Surveyor Junior Surveyor Graduate Surveyor Administrative staff Employment was recorded at four periods July 2007 (taken to be the peak of the construction and property markets) July 2011 (a year ago, roughly in line with the Census date) July 2012 (on the date of the survey) December 2012 The results set out in this report were in respect of the following practice areas. Figures in parentheses are the number of employed surveyors recorded in this survey: Construction Building Surveying (46) Quantity Surveying (477) Geomatics Surveying (58) Property Commercial Agency (94) Property and Facilities Management (93) Residential Agency (233) Rural Practice (14) Valuation Surveying (107) A total of 1,122 surveying professionals were accounted for in this survey, representing 25% of the membership of the Society of Chartered Surveyors Ireland. 22

25 i and Appendix 2: Third-Level Construction Property Surveying Courses The Society of Chartered Surveyors Ireland formally accredits the following construction and property courses: Construction Dublin Institute of Technology BSc (Hons) Construction Economics (Quantity Surveying) 1 MSc Quantity Surveying Limerick Institute of Technology BSc (Hons) Quantity Surveying 3 Dundalk Institute of Technology Cork Institute of Technology Waterford Institute of Technology Sligo Institute of Technology Letterkenny Institute of Technology BSc (Hons) Building Surveying BSc (Hons) Quantity Surveying BSc (Hons)Quantity Surveying BSc (Hons) Quantity Surveying BSc (Ord) Quantity Surveying Property Dublin Institute of Technology BSc (Hons) Property Economics BSc (Hons) Property Studies 5 BSc (Hons) Geomatics (Land Surveying) BSc (Hons) Spatial Planning 6 MSc Real Estate MSc Planning and Development MSc Spatial Planning MSc Spatial Information Management All Masters Programmes are Part-Time Limerick Institute of Technology BSc (Hons) Property Valuation and Management 7 Notes: 1 Full-time and part-time 3 Includes a third year work placement programme 5 Four-year part-time 6 Course advertised as BSc (Hons) Planning and Environmental Management on CAO. Students have a communal first year and choose either Spatial Planning or Environmental Management in the second year of the course. 7 Includes a third year work placement programme 23

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28 Dating back to 1895, the Society of Chartered Surveyors Ireland is the independent professional body for Chartered Surveyors working and practicing in Ireland. Working in partnership with RICS, the pre-eminent Chartered professional body for the construction, land and property sectors around the world, the Society and RICS act in the public interest: setting and maintaining the highest standards of competence and integrity among the profession; and providing impartial, authoritative advice on key issues for business, society and governments worldwide. Society of Chartered Surveyors Ireland 38 Merrion Square, Dublin 2, Ireland Tel: (0) info@scsi.ie Advancing standards in construction, land and property, the Chartered Surveyor professional qualification is the world s leading qualification when it comes to professional standards. In a world where more and more people, governments, banks and commercial organisations demand greater certainty of professional standards and ethics, attaining the Chartered Surveyor qualification is the recognised mark of property professionalism. Members of the profession are typically employed in the construction, land and property markets through private practice, in central and local government, in state agencies, in academic institutions, in business organisations and in non-governmental organisations. Members services are diverse and can include offering strategic advice on the economics, valuation, law, technology, finance and management in all aspects of the construction, land and property industry. All aspects of the profession, from education through to qualification and the continuing maintenance of the highest professional standards are regulated and overseen through the partnership of the Society of Chartered Surveyors Ireland and RICS, in the public interest. This valuable partnership with RICS enables access to a worldwide network of research, experience and advice.