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A Christmas Update

The siege in Sydney is over.  A lone gunman with a criminal record subverting religion for a selfish purpose has died, with two of his hostages.

Here come the twitter trolls, the blame game and the grandstanding about the safety of other Australian cities.  Will this unify or divide the Aussie community?

The world is watching ... ...

Australia is shaken.  We are the latest focus. Terrorism has finally hit us; it was only a matter of time.  In America, where the feel good recovery has been hit by the fall in oil prices, it revived the memory of the Boston Marathon.  The stock market is down. No Santa rally this year!

Europe remembers its victims too. The UK, with its long history of IRA bombs and other recent home-grown terrorist events shares our pain.

Meanwhile Eastern Europe is on track for a cold war and a long cold winter, many of their economies are struggling.

A stagnant Australia?

That unfair budget, the gift that keeps on giving to the opposition, continues to languish in the Senate while the Reserve Bank, business groups and serious media commentators are calling for support for the budget we have to have.  Are the voters listening or do they still believe in the magic pudding – everything for everyone, and for free? Will the formation of a new fringe party resolve the stalemate in the Senate or will an early election fix it?  When do we want to take the pain – now or later?

The Financial Services Inquiry Report has added to speculation about the future of interest rates and the industry’s operation. How much of this report will be put into action?

Winners and losers

Business conditions vary across the nation.

New South Wales is the stand out economy, infrastructure activity is in full swing, the residential property frenzy is predicted to continue.  Planning laws are being cleaned up.  Recruiters are talking up job prospects and pay rises but a realistic look at all the property markets shows patchy and widely varying conditions.

The Avdiev Property Industry Remuneration Report, 390 pages of industry employer salary data will be published in March 2015. We’ll be surveying in early February.

The new Victorian government is planning to tear up the signed contracts for the much needed cross town toll way, angry motorists are stranded by the regular gridlock.  Fancy a three hour trip from the airport into the CBD? Can the new cross bench in the upper house intervene?

Queensland is preparing for an election in the new year, the ACT is bracing itself for the loss of 175 government agencies and the flow on effect on property.  The Northern Territory continues to thrive, Western Australia is adjusting to the changes in its mining industry.

An unexpected result in a South Australian by-election has given the government a majority, raising hopes that some definitive action can be taken to encourage investment.

Does the media focus on Tasmania’s new champion in the Senate help or hinder its clean and green image and its well being?  Could a hoped for resettlement of refugees stimulate its struggling economy?

The property industry players

The A-REITs have achieved stability, share prices and dividends are rising, but they are competing for assets with foreign capital and its long term investment horizon.

The Financial Services Inquiry Report has put the wind up the major banks, minor lenders see a future with a level playing field especially in property finance.

Property developers are hoping for a clean-up of planning laws in NSW and worrying about a new planning regime in Victoria.  Queensland developers are focusing on residential, but concerned about consumer confidence.

Retirement Living and Aged Care are the growth sectors.  The baby boomers are getting older, the big funds have bought up a fair chunk of the market, new groups are listing with varying success.

Retail property is still a secure and stable asset, but very reliant on its retailers.  Big retailers are squeezing their suppliers, small retailers are struggling, will pre-Christmas sales supplant Boxing Day as the big shopping event?

The major real estate agents are buying up project management companies, offering a vertically integrated service to landlords and tenants from fit outs through leasing, negotiation and management.  Amalgamation and buyouts are common among the smaller groups.

There is increasing specialisation among the built environment professionals.  Sustainability expertise is being sliced up into ever smaller segments and sold as an add-on to engineering and building services.

The “starchitects”, hired to design major developments with features to gain planning approval, are fighting to be retained for the construction phase of projects.  The developers take over the design development, hoping to get substantial variations to the original permits, diluting the design quality and proposed amenity.

Professional jealousy is alive and well in this market sector.  The latest development phase of Sydney’s Barangaroo has attracted a foreign architect to design a world class tower.  Of course, the locals have a better solution.  Shades of the Sydney Opera House!  An iconic building form by a Danish architect, inferior interiors designed by locals, finally gone in the long awaited refurbishment of the early 21st Century.

Project managers continue to retain their supremacy over the designers as the lead consultants on many projects.  The building industry is waiting for the outcome of the Royal Commission and its interim report, the unions continue their pressure on the current system and are testing the water in Victoria.  Will innovation in building systems and material use change anything in this sector?

Our future professionals

Will this year’s new graduates find a job, and how long will it take?  Was a stint in tertiary education a remedy for a patchy secondary schooling?  Their attention span is short, their spelling is wonky, they can’t add up in their heads, but they come with fresh ideas, superb techno skills as well as lots of attitude and a fierce devotion to their devices.

Are you prepared to take remedial action once they hit the industry?  Give the kids a job!  They are the future.  Don’t be afraid to dish out tough love, teach them to focus but don’t kill their energy and ideas. Ten years on they will be the succession plan.

Nurture the women – they have a lot to offer, encourage them to succeed and stay flexible to meet their future needs, as mothers as well as workers.  Before you know it, blokes could be child bearers too, the research labs of the world are working on it! What a goal for the 22nd Century!

HO, HO, HO ... ...

The reindeer have been made redundant, Santa’s bought a Jeep!  Could this change of rapid transport bring peace and joy to a world full of turmoil?  Santa Baby, do your best. We’re hoping and waiting.

Merry Christmas, Happy Holidays, Seasons Greetings and a productive, innovative and prosperous New Year. We look forward to sharing in your success.

November Update

Welcome to another thrilling instalment of our Federal Senate mayhem.  If the consequences of gridlock politics were not so serious the antics in Canberra could give us a laugh a minute.  The media love the twists and turns and the voters are asking – is this what we voted for?

The interest on the Aussie credit card just keeps ticking up… …

Bring back the Biff!

What a disappointment!  NO shirt fronting happened, Brisbane survived the G20 event, a trade deal with China has been agreed.  India is a welcome trading partner.  Our future prosperity lies in the fortunes of the Asia Pacific region.  That massive population will need our products and services for many years to come, despite their temporary economic slowdowns.

The well behaved delegates have gone home to fight their battles on their own home fronts. They got a chance to compare their domestic gripes and worries with a sympathetic peer group.

North of the equator there’s a hostile congress waiting in the USA, empire building efforts in Eastern Europe will keep European governments and NATO very worried, Islamic State terrorist activities in Africa and the Middle East are intensifying.  Which of these pose the greatest threat to the world‘s political and economic stability?

The battle of the States

New South Wales  – It’s on the move!  What a difference half a year makes.  Sydney is buzzing with new energy.  It’s all go – a change of Premier has brought a change of perception and mood.  Plans for new infrastructure have invigorated investment prospects, all property markets are looking up, the residential sector is continuing its strong performance.  The prevailing planning laws have encouraged offshore investors to spend their development money in Victoria – it’s easier there.  But for how long?

Victoria – has an election on Saturday.  The spending promises are in the realm of magic pudding economics, the prospect of a change of government has many worried, but are their numbers enough to prevent the change? Manufacturing jobs have gone, the road traffic chaos needs fixing. Who can deliver? It’s a choice between the staid, conservative government and the unknown quantity – the re-branded opposition leader with strong militant union connections.

Investors take a dim view of cancelled contracts, industrial unrest and general political turmoil and NSW is salivating at the prospect of an influx of all that foreign capital to its economy and property development activities .

The battle of the generations

Baby boomers now at retirement age are facing a rough time if they are still employed.  In the restructure of products and services that property companies have carried out the seniors have borne the brunt of the changes.  Employers continue to clean out the dead wood among their highly paid executives.  They report that in the course of business transformation different executives have benefited from the restructure, and that old school executives are suffering.  “Old faces need a new outlook on life” says a new broom, sweeping clean.  The smarter oldies are in transition from full time roles into part time activities, taking their years of experience and corporate memory into fledgling start-ups where their maturity and wisdom balances the ideas, energy and fast pace of their young employers. Mother hen has a lot to offer.

The generational change at the top now puts Generation X in charge.  They have been waiting in the wings for some time, not always patiently, and are relishing the opportunity to put in place all the initiatives they have been planning.

Generation Y continues its push for recognition and more pay.  This has paid off for those working in the Retirement Living and Funds Management Sectors of the property industry. Their peer group in other market sectors will do the same as conditions improve.

But wait, there’s another cohort waiting in the wings.  The first of Generation Z, the digital natives born in 1996, are just finishing their secondary schooling, celebrating to excess and contemplating university education or a trade career.

How many of them are looking at the built environment and its many options for future work?  Where will the best and brightest go?  Will they choose us?  In 3 to 4 years’ time will they be facing a battle for a job, or will we be fighting a war for talent?  Current youth unemployment in Australia is reported nearing 15%. Any predictions for 2020?

The battle of the sexes

The women keep fighting to reach the top, but despite concerted efforts it’s proving elusive for many.

“Daughter water” - a plea to fathers of daughters to promote women, groups of ambassadors for change and mooted quotes and targets for women to take senior positions in major corporations provide a steady diet of cheerful copy for the media.

However, reality bites when you look at pay differentials and the news on the Workplace Gender Equality Agency (WGEA) website that the difference of 19.9% between full time male and female employees’ base remuneration rises to 24.7% when incentive pay is added.  The website has a raft of other gloomy statistics. Work/life balance is not a priority for many employers. In the 24/7 work environment communication windows stay open, time zones become irrelevant and sleep deprivation is the norm. When did you last switch off your smart phone?

The battle of the fat cats

The average total pay for CEOs in Australia’s 100 top listed companies is now $4.84 million, 63 times an average worker’s earnings.  Their base pay went up by 2.9% in the 2013 financial year, below the 3% in the general market. A subdued result. CEO average earnings were 94% of average earnings in 2007, before the GFC. A substantial moderation.

Of the six top CEO earners in 2013 two were in property and only one was a woman. She was an exceptional case. Having achieved much she is now ready to move on, looking for a change and a new career.

Executive bonuses have moderated, incentive targets have risen, shareholder activists have calmed down.  The AGM season is nearly over, without blood on the floor or director spills to date. It’s the same in other capital markets – the fat cats on Wall Street and London are expecting modest bonuses for Christmas. It’s cold comfort but they’ll survive.

The battle of the property remuneration data

NO, the average pay of the average property person has not gone up 10% this year, despite recruiter claims.  The October Update to the 2014 Avdiev Property Industry Remuneration Report, with data sourced from employer companies, shows an average change of 3% overall across all the property, investment, development and built environment professions positions in the previous year.

As always, top performers get top rewards.  And so they should. Avdiev regularly benchmarks the remuneration of CEOs, senior executives and top performing teams to make sure that their pay is at market rates.

The battle for the future

It’s always been a battle between the quick and the dead.  Prepare for change. Stay nimble. Adapt, innovate or die. Above all, have fun doing it.

A Winter Update

Bring on the spring.  Will that help to ease the worry of living in interesting times?

Safe haven Australia?

The world seems to be in turmoil.  Geopolitical tensions everywhere! Syria, Gaza, Israel, Iraq and Ukraine are producing floods of refugees, the biggest since World War II.  Closer to home China is building lighthouses on islands in disputed territories, its investors continue to park their money off shore and its economy is showing signs of strain.  North Korea is test firing rockets again.  Will the Ebola virus reach us and when?

The downing of flight MH17 has disrupted our feelings of invincibility.  Australian youth is fighting in foreign wars, threatening to return with new skills and new intent.  But despite all that, aren’t you glad you’re an Aussie?  There’s something to be said about not facing genocide, invasions, ethnic cleansing or a deadly virus.

What’s our focus now?

Whatever happened to the budget we have to have?  Hated by the punters, stymied by the motley crew in the new Senate, masticated ad nauseam by the all-knowing media, the Aussie credit card keeps clocking up the monthly interest.  Does anyone care?  Where’s the alternative budget?  Who’s got the solution?  What’s the way to fix the future debt?  Leave it to the kids to pay off?  They are the ones without jobs, youth unemployment is at 20% in the latest official ABS statistics, a worrying spike in an ongoing problem.

Business confidence is fluctuating, consumers are uncertain, economists are worried and the RBA is making warning noises about household debt.  The pollies are waffling - there’s a rash of politicians’ memoirs on all sides of the political spectrum, busy trying to rewrite history.  Do they really think we can’t remember?

What’s the Avdiev focus? Property Salaries!

We’ll have news about pay rises soon.  The Avdiev Survey, which collects salary and incentives data for the annual Avdiev Property Industry Remuneration Report is underway.  Credible data from employers is essential to counteract the recruiter data salary surveys, quoting ranges designed to stimulate staff interest in changing jobs.

Thanks to all our loyal contributors for your support and suggestions for new positions and sectors and improvements. The industry keeps changing and we are keeping pace.

If you have not contributed yet, please do so – it’s easy – click here, and you’ll be eligible for a substantial contributor discount when you purchase the report. An update will be published in October, and all remuneration data contributors will receive a summary of the results.

We continue to carry out bespoke salary benchmarking assignments in all property markets for Boards and companies conscious of preserving their human capital. The latest is for a CEO in a national construction company.

On the regional fly around

Business in the states is operating at different speeds and levels.

New South Wales - the home of capital markets and the REITs. It’s all go here with an influx of Asian money, proposed infrastructure projects and a general feeling of good prospects of work for consultants.  Developer donations are in the news.  Having done over Labor, ICAC is steadily working through the rest of the NSW Parliament. Now it’s the turn of the new Premier’s team.

Queensland is feeling more positive about its new government but Brisbane has an abundance of empty office space, built on spec without meaningful pre-commitments in expectation of better times. The residential market is picking up. Can the empty office space be converted to apartments?

Victoria is losing its manufacturing base, and with 7% unemployment faces being the rust belt of Australia.  A state election in November means the battle is on.  The premier is hard at work trying to bring more crowd pleasing and money making sporting functions to the state.  The leader of the opposition is being re-branded, part of a charisma injection strategy to make him more recognisable and palatable to the voters.

Western Australia is undergoing structural change, trying to keep its ports open and active to ensure mineral exports continue unimpeded.  An apartment glut is looming, the economy is slowing and workers are leaving the state.  An ideal time to negotiate workplace conditions directly with the workforce, as a major building contractor is doing.

The Northern Territory has run out of workers and is looking for imports.

Tasmania’s unemployment rate keeps growing, it is losing its best and brightest young people to the mainland.

How can South Australia recover from the loss of the automotive industry?

The Royal Commissions

Having dealt with the pink bats, they are on to the child abusers and the unions.  The news keeps getting more interesting.  Now it’s the turn of the CFMEU and its interests.  What can the property industry expect next and will history repeat itself?  Those of us who’ve been around a while are getting a big dose of déjà vu.

Remember Norm?

Norm Gallagher was Federal and Victorian State Secretary of the Builders Labourers Federation (BLF) the CFMEU’s ancestor. In 1986 it was permanently deregistered in various states by the Federal Labor Government and some state governments.  Victorian building contractors bought industrial peace by contributing materials to Norm’s beach house which he was building at the time.  He (but not the contractors) was convicted, went to jail and was freed on appeal several months later (source – Wikipedia).

The morning after his conviction every BLF building site sported a “FREE NORM” sign.  Come midnight a street artist with attitude and a spray can modified them.  The signs now read:

The signs came down at once, the BLF was eventually de-registered and industrial conflict quietened down for a while.

What are the property markets doing?

The REITs are in portfolio remix mode, buying retirement and health assets, competing with Asian money and absorbing smaller companies and potentially profitable start-ups.

Property Finance is fuelled by private wealth, enabling new development at affordable rates.  The capital markets are hiring young analysts – at last.  Residential finance rates have dropped to a near low, should we be worried about the property bubble and our own low doc loans problems?

Mooted changes to planning laws in NSW are stuck in Parliament.  The development industry is looking to Victoria where newly defined zonings, infill development and increased densities and heights look attractive.

Retirement living is the latest go-to asset class.  This sector is gentrifying.  Once located in remote places, a dumping ground for senior citizens, the wave of baby boomer retirements and their push for style and comfort has upgraded the quality of design and facilities of many retirement villages to resemble the homes they are leaving behind.  An injection of funds from the listed investors helps a lot.

Corporate Real Estate – what a good time to be a tenant!  Commercial office vacancies are still high, improving slowly, but tenant incentives are not falling.  Tenant advocates continue to squeeze every dollar out of their colleagues on the landlord side.  Landlords providing a Green Star rated environment are at last seeing the benefits of upgrading their buildings.

Results among the built environment consultants are mixed.  Those working on new projects, especially in states which have infrastructure building as a priority, are doing well and beginning to hire again.  Those who have missed out are still shedding staff. Restructuring is on the cards again.

Real Estate Agents – apartment sales are strong and those firms which have no project marketing divisions yet are setting them up.  Asian buyers are a strong force in this market.  Will they keep their apartments empty for a large part of the year as they have done in Vancouver?  In response the Canadian government, denied flow on community benefits, has abandoned special incentives for economic migrants.

Retail Management – the discount sales continue, the budget seems to have spooked the consumers.  Offshore retailers are buying our iconic retailers and offering strong competition to the establishment.  New initiatives and new divisions can take a long time to show a profit.  An upcoming forum will debate the future of retail.

Building and housing – a strong pickup in residential building is on the way, low interest rates are tempting buyers into new home ownership in the outer suburbs.  Panelised construction, built offshore, assembled here, is cutting construction time and labour costs.  Commercial builders in WA are negotiating and have been offered reduced labour costs by the unions, who are facing the reality of less work and job losses.  A big change from the attitude of the previous decade.

What about the women?

There’s good news and bad news here.

“O woman, where art thou?”  After sending out this distress call to the UK built environment industry in April, the Royal Institution of Chartered Surveyors (RICS) has just elected the first female president in its hallowed 146 year history for a 3 year term.

A woman is now CEO of General Motors USA, and of Lloyds of London.  The percentage of women directors on the biggest, listed Australian boards has doubled in the last 4 years, to a modest 17.6%.

The Fields Medal for Mathematics, of equivalent status to the Nobel Prize, has just been won for the first time in its 80 year history by a woman professor.

But the bad news hits the hip pocket nerve.  The latest ABS data reveals that women are earning 81.8% of male salaries, down from 85.1% in 2004.  This opens up a pay gap of 18.2% up from the 17% commonly quoted differential.

What’s more, men are faring better in the pay negotiation stakes.  Last year male salaries increased by an average of 2.9%, beating the women’s rises of 1.9%.  How long will it take for women to catch up?

What about the future?

Science fiction is becoming reality.  In 1984 William Gibson wrote “Neuromancer” a seminal science fiction novel which gave us a new vocabulary for the cyberspace and technology activities in our everyday lives we now take for granted.

In 2014, only 30 years later, 3D printing technology is one of the latest disruptive innovations.  A jeweller in Wollongong is creating wedding rings with fine mesh wire and a 3D printer.  And the latest research efforts in the US have developed an origami based self assembling robot, with a microprocessor brain activating small electric circuits that pull a flat sheet of stiff paper into shape.
Will the built environment industry use this innovation?  Can we wait 30 years to find out?

A post budget Update

Just when you thought it was safe to get on with your business plans came the budget we have to have and everyone loves to hate.

Postpone the pain

Not me, not now – they’re taking the magic pudding away.

Having voted to clean up the national debt and other fiscal nasties the Aussie punter is in a state of shock, denial and outrage.

The media are delighted – what a stimulus package for a becalmed 24/7 media cycle. The commentariat is in overdrive, the economists’ calm and rational comment are drowned out by the hysteria.

The students are protesting, just as they (and the current Treasurer) did when the HECS debt was introduced in 1989 and raised in 1993. They want free tertiary education back, the Government wants to restructure its delivery, is the research function in all universities essential?

Winners and losers

The budget is hitting the hip pocket nerve, taking something from everyone. The property markets are not exempt.

Changes to aged care will affect the prospects of newly listed companies, but double tax on changes of ownership will go. The NRAS subsidies will stop, so will Housing Help for Seniors.

Red tape reduction is expected after large cuts in the number of Federal Government agencies, but there are all those other layers of state and local government bureaucracies to contend with.

Infrastructure projects will get a huge injection of funding, a boost for the construction sector.

Small business gets a cut in company tax, will that encourage more jobs to emerge? Can a $10,000 subsidy encourage employers to hire the over 50s who don’t stand a chance in the current employment market?

Executives earning over $180,000 a year will be taxed at 49% instead of the current 47%, with a similar rise in FBT.

But not everyone in our industry is a high earner. The cuts in welfare will cause pain at the bottom end of the property food chain and maybe a renewed push for a raise in salary at review time, especially in small businesses getting a tax cut.

In an effort to get the unemployed kids off the couch, has the government forgotten that there are not enough jobs to go around, especially for new graduates?

Austerity pays

New Zealand has endured 6 years of economic restraint and having been crowned the ‘rock star economy’ late last year it is now forecasting its first budget surplus for many years.

The UK is emerging from its austerity drive, unemployment has fallen to under 7%.  The London skyline if full of cranes, a sure sign of economic activity, its streets are full of tourists, there is a new buzz of activity in central London and the High Streets of the dormitory satellites – what a contrast to the last few years!

This city is positioning itself as an identity and a brand, a campaign urging business leaders to adopt a “Dot London” web address is underway.  Mind you, the oligarchs, magnates and tycoons have helped with the recovery – they’ve found a safe haven for their wealth, away from the upheavals in their homelands in Europe and the Middle East.

UK average house price growth has hit double digits, but it’s still divided between the poor North and the prosperous South.

Unemployment in the US has fallen to 6.3%, the end of the fiscal stimulus is in sight and the jittery stock market seems resigned to it.  Not if, but when.

Southern Europe is showing glimmers of economic revival, the North continues its steady frugal pace, the voters have just expressed their disdain for the European Union.

Can dumb luck last forever?

It still feels good to come home.  Yes, we are still the lucky country, we’ve still got stuff to extract and sell but where are the new industries to keep our relative prosperity going?

Our education standards are not keeping up with global benchmarks, could the age of entitlement have affected students’ attitudes to the rights and responsibilities of learning?  What needs fixing, the students, the teachers or the system?

Asian money is flooding into Australian property, both commercial and residential, competition is rife and prices keep rising.

Where is the local money going?  Entrepreneurs need funding and encouragement to innovate, but restrictions on incentives for startups and their employees continue.

Cities in focus

State Governments have turned their minds to planning controls and master planning.

New South Wales has two new ministers on the job, has removed the long standing head of planning and is focusing on large new rejuvenation projects – Newcastle, Parramatta, Green Square and several $1 billion plus new precinct developments in the CBD.

Victoria has amalgamated several planning authorities, is reforming developer contribution levies and has created a new strategic plan for Melbourne, forecast to increase its population to 7.7 million by 2051.  Will a new ‘permanent’ urban boundary last the distance?

Queensland is speeding up urban renewal with a redevelopment of the Brisbane show grounds site, major residential developments are on the drawing boards.

What about the people?

Forecasts for jobs growth come and go with the mood swings of the business community.  Hiring in an environment of uncertainty, confusion and fear is a risky business.

Architects are once again feeling the pain of redundancy, not even selling the company can save the jobs of all the people.

There is a constant move of real estate agencies, Asian language speakers are highly sought after to sell Australian property to their compatriots.

Apart from a few vocal shareholders making life difficult for some major property players it’s been steady as she goes in other sectors. Pubs are emerging as a profitable and predictable asset class, will the people go with the portfolios when they change hands?

A spot of Avdiev marketing

It’s a month to the 30th of June – salary review time.

The Avdiev Property Industry Remuneration Report was published in March and contains the latest data for 320 + positions in 12 market sectors (Retirement Living / Aged Care is new this year) with breakdowns for New South Wales, Victoria, Queensland and Western Australia (also new) and analysis by company size.

For contributors of remuneration data there’s a hefty discount on the full price of the Report.  We also have searchable databases of ASX Top 300 Non-Executive Directors Fees Reports and listed Property Industry companies as well as two Women Leaders databases.  Women are flavour of the year for Board appointments.

As always we are busy reviewing remuneration across the property and construction sectors for Managing Directors, Senior Executive teams and heads of family companies, benchmarking them against the market.  They feel their turn has come for a raise.

 We’re Aussies still … …

It’s that time of the year – New South Wales has beaten Queensland in the first game of the State of Origin Series, the Blues are triumphant, the Maroons are vowing to fight back.

Meanwhile on Melbourne’s Friday afternoon talk back radio there’s a fierce debate about which footy team God barracks for!  No conclusion has yet been reached.

 May the force be with you.

February Update

Just when you thought that business confidence and conditions would improve in early 2014 comes the news of the impending end of the car manufacturing in Australia.

The pollies are posturing, the media has polarised and the warfare in Federal Parliament has resumed.  Unions are on the nose again. The pendulum has swung. We’ve seen it all before. Who will sort them out, if ever?

Media research has uncovered alleged criminal links in the unions, giving the new government a further reason to try to establish a Royal Commission, as well as bring back the building industry watchdog.

While the furore and the blame game play out, let’s focus on the positives.

Australia’s Asian luck

Australia is still the place to be – despite our global status as a high cost small economy, we are seen as a safe haven in uncertain times, in our 23rd year of positive growth.  Our Asian neighbours are investing heavily in Australian property, encouraged by a change in business visas and lender attitudes.  Asian banks have set up here and are doing good business with their compatriots.

The Asian branches of Australian companies are creating new services and are on an aggressive capital attraction mission, marketing ‘Investable Australia’ to locals looking for a safe haven for their assets.

We are exporting Australian expertise, services and brain power.  We are well positioned for the new economy of the 21st Century.  The Reserve Bank is holding interest rates steady and watching the economy closely.

Australia’s resources have a vast market up north and, with China’s economic slowdown reported to have bottomed, miners and farmers should be feeling more positive after dealing with such body blows as the mining tax, the carbon tax and the suspension of live cattle exports as well as the political uncertainty. But now there are bushfires and a drought again.

The new Federal Government is preaching the end of the age of entitlement and corporate welfare and a new fiscal rectitude.  We’re nervous, but that’s what the country voted for in last year’s elections.  There is a precedent. Look East.

Across the ditch

Little New Zealand has now been branded “the rock star economy”.  It’s taken the NZ government nearly six years of prudent economic management, tight control of government activities and spending and a debt reduction focus to achieve that status.

Wages are beginning to rise, but as yet the 4.2 million Kiwis don’t seem to be aware of the upturn, despite the roaring tourist trade in all their stunningly beautiful scenic places.  The seismic activity under the islands keeps the Kiwis on their toes.  Wellington had a 6.2 earthquake a month ago, with building damage but no loss of life. They were lucky.

Christchurch is still mourning its dead but is now running a “rebuild bus tour” to present a vision of the future.  The usual problems beset the re-development progress.  The government’s land and property resumption policy is to offer 20% of previous land value to purchase the worst affected land, especially in the CBD.  Owners and developers are up in arms. The impasse continues.

But in a demonstration of the resilience of the human spirit, Christchurch has a new retail precinct built of shipping containers and the Cardboard Cathedral, of which the congregation is inordinately proud.  And rightly so.  Designed by a Japanese architect specializing in earthquake compatible structures, it is full of light, its soaring interior has an ethereal feel and excellent acoustics, a structure of cardboard tubes and a translucent polycarbonate roof.  In its own 21st Century way it’s every bit as good as Chartres or Westminster.

If ever the disputes about the historic value and rebuilding costs of the old Cathedral on the Square are resolved, the parishioners may not want to part with their transitional place of worship.

What’s new back home?

The residential real estate market has roared back into life, the banks are making heaps of profit, lending to large company investors and SMSF property investors alike.  Predictions of a property bubble surface regularly. The banks play down the prospect.

In the aftermath of the GFC and a high vacancy rate office space is again being converted into apartments, especially where there are harbour or other scenic views.  Milsons Point in Sydney is experiencing its second spate of re-development hoping to repeat the success in the early 1990s, the tail end of a previous recession.  Asian investors regard this as an easier way to enter the market than undertaking a new development with its associated risks.

New Anti-bullying legislation has come into force - what will that mean for workplace harmony?  Another avenue for financial gain for troublesome staff or an effective way to resolve conflict?

Employment in property is still slow, despite positive talk and a few new mid-level jobs appearing in property management and development.  The situation is very patchy.  Restructuring has been quietly continuing.  Teams recruited to service large projects are being disbanded by companies that geared up but cannot offer continuity of employment while the project pipeline is empty.  For others, an influx of new business has left them short staffed and they are hiring contractors.

Senior positions are in short supply, the transition from senior corporate manager to self-employed consultant continues.

The push to help women rise in the ranks has just received a welcome boost.  A major construction company has promoted a woman to the CEO position. Are the blokes a match for this capable woman?

What’s new at Avdiev?

The Avdiev Property Industry Remuneration Report has lots of new features for its 28th Edition, to be published in mid March 2014.

The position table format now includes a breakout of Western Australian data in a number of market sectors, short and long term incentives and targets, and findings for small, medium and large companies.  With the growth of retirement village ownership and development, we have added Retirement Village / Aged Care as a new market sector in the Report.  Many new positions have been added throughout the Report, it now contains 320 positions and some 20,000 incumbents.

The Avdiev Survey, the source of employer salary data for the Report is in train and closes on Monday 17th February.  Thank you to all our loyal contributors who support the Report.  If you have not yet responded with your remuneration data to be eligible for a substantial contributor discount, please click here to complete the survey document.

The preliminary findings make interesting reading, especially in cases where rewarding the productive employees who make a substantial contribution to the bottom line has to be balanced against the profitability and on-going viability of the enterprise.

We have also updated and published the Avdiev ASX 300 Non-Executive Directors’ Fees Reports 2014. The Women Business Leaders searchable databases now list profiles of women leaders in S&P/ASX Top 300 companies and property companies.

No excuses for not knowing who and where the women are when the time comes to appoint a new senior executive or director.

Demand for our remuneration consulting and benchmarking services continues.  We have just recruited a new General Manager of Property for a not for profit housing organisation.


Late last year, just before the Federal election, I made some rash predictions, just for fun.  It’s time to review what happened.

  •     The bookies will get the election results right.  They always do – They did.
  •     There’ll be a spike in business confidence after the election – there was, but it keeps getting hammered by recent events.
  •     The voters will expect swift action on their pet issues and rail against cuts in their comfort zones – the media is full of their gripes and worries.
  •     Lipstick sales will increase now that sex appeal is back in focus – I went out and bought two!
  •     Vegemite, the new campaign accessory, will not enjoy a price rise – It’s now on special at all the supermarkets.
Not too bad, but I won’t be tempting fate again.  Let’s see what 2014 brings.