Salaries in the country's property sector have fallen by an average of 30 per cent, pulled down by a struggling commercial and residential market.
Property sector wages down 30%
Salaries in the country's property sector have fallen by an average of 30 per cent, pulled down by a struggling commercial and residential market in Dubai, according to a survey by the recruitment consultancy Kershaw Leonard. In some cases salaries had fallen more dramatically, with more sales people in the sector being put on "commission only" pay packages, said Mike Hynes, the managing director at Kershaw Leonard, based in Dubai.
The survey was conducted in July and August this year and compared with the last one, held in May last year. "Historically, the Dubai real estate sector was a very easy sector to come into and make a lot of money," said Mr Hynes. "People were buying property off-plan without even seeing it." He said a number of workers in the market were unskilled: "They had simply jumped on to a booming bandwagon."
Thousands of jobs have been lost in the property sector in the past year as property prices have fallen by as much as 50 per cent from last year's peaks, and demand for new homes has fallen. Those employees kept on were forced by employers to take pay cuts, said Mr Hynes. Deyaar Development, Dubai's second-largest developer, last week announced it had cut 20 per cent of its workforce. The company posted a 74 per cent decline in third-quarter net profit to Dh81.6 million (US$22.2m) from the third quarter last year.
Nakheel, the developer of Dubai's Palm islands, has made 1,000 workers redundant. Damac Properties, Omniyat Properties, Tameer and Limitless have also shed jobs. Firms have also taken measures such as asking staff to take unpaid leave and moving people to busier areas in the region as they try to cope with the slowdown in Dubai. Recruitment consultants have said it was difficult to provide a precise number of people who had lost their jobs because not all companies had been transparent about cuts.
But these corrections would ultimately create a healthier environment for buyers and workers, Mr Hynes said. "I think there will be a bit more sense about what people are paid," he said. "There's a lot more regulation now about the kinds of properties that can be sold, and I think it's less attractive to people to just pile into real estate because the massive amounts of money that were made before are not there anymore.
"I think you'll get people who want to be in that industry because they're good at it, not because they can make a load of money." @Email:firstname.lastname@example.org