A Christmas Update from Avdiev
One, two, three – what are we waiting for?
The end of the year. It can’t come soon enough. It’s been a long
and tumultuous one. 2016 gave us Brexit, the DD election in
Australia and the never expected but oh so obvious (in hindsight)
election result in the US.
Referendums are dangerous! Ask the people what they want and they
tell you. The Italian Prime Minister has just resigned, the South
Korean President has been impeached. An emboldened Taiwan phoned
the American President-elect and shock horror!!! He took the call.
The rise of the deplorables
It was so easy once … … The electoral pendulum swings were
predictable. Progressives on the left making social change while
blowing the budget, the reactionaries brought in to fix the fiscal
mess and restore stability - oh so boring! But in the increasing
polarisation the middle ground got left behind in the rise of
technology, globalisation and disruption, the decline and fall of
manufacturing, stagnating incomes and job losses.
In a democracy a vote is a weapon – the deplorables (a new name,
weren’t they the plebs once?) rose up and changed the world order.
‘Tis the season to be jolly
The property industry has done well this year despite the bubble
worry and the multi-mode, multi-speed economy, divided along
resource based and geographic lines – improving in the West, still
good in the East, with banks under pressure to increase loan rates
and deposits for residential property. Commercial property
vacancies have fallen, the REITs continue their takeover battles,
viable development is still robust, retirement living is improving
in health, the real estate agents have done well, and the whole
property industry has been lamenting the shortage of good people.
Avdiev research shows that, unlike the rest of the working
community, property overall got a 3% pay rise in the last salary
reviews with some spectacular spikes in areas where staff
shortages are still acute. New remuneration initiatives are
reported to be the focus of many of our survey respondents with
incentive structures and performance targets being reworked and
fine-tuned. Our commissioned research has been called on to
provide feedback on incentive practices in the built environment
and development sectors. The latest results of the Avdiev Survey,
just concluding, will reveal the latest moves and trends.
The AGM season has not been too jolly for the fat cats at the top
of the listed companies. Their shareholders got restless, not much
joy in the dividends this year, proxy advisors stirred the pot and
strikes against remuneration reports increased this year.
There is good news
Keep the glass half full and be grateful that we’re in Oz, not in
the Middle East, the EU or Eastern Europe. Australia, the lucky
country, is still lucky but only just.
It does not deserve it. The Federal Government limped to the end
of the parliamentary sitting year with a few modest wins. The
double dissolution bills scraped in with serious modifications,
time will tell if they will help the building industry and its
clients. The farmers got a definite back packer tax at last, but
the struggles in the Senate to get there exposed the levels of
power, pragmatic attitudes and intellectual capacity of the new
senators. The Aussie credit card keeps ticking up debt. The budget
deficit is now $37 billion.
The international word of the
Post-truth, often associated with politics, has been the Oxford
Dictionary’s choice for 2016. Defined as “if it feels right it
must be true” it’s been a universal tool employed by election
candidates, trolls on social media and the creators of fake news
on special websites. Our own “Mediscare” campaign worked a treat
here. Did it fool the deplorables?
The workforce is our future Australian education got a wake up
call this year. A woeful global scorecard for our secondary school
students, on a par with Kazakhstan has revived the debate about
the quality of our education and what to do about it. Is it
teacher quality, curriculum content, lack of or misdirected
funding or student engagement that is the cause?
The lack of STEM subjects (Science, Technology, Engineering and
Mathematics) give property academics lots of grief, especially at
first year university level. Remedial courses sort out some of the
problems, but the attitudes to learning and the push for teaching
as infotainment take a while to subside.
Much credit must go to the RBA’s research into skills needed for
the future workforce. With manual jobs in decline, or under threat
from automation, it is the cognitive skills that will be the
desirable feature of the employee of the future, especially the
non-routine ones like design and aged and health care work. The
property industry uses and needs those skills and will have to
teach the young if their tertiary education does not suit the way
With the Australian population equally split between government
employees and welfare recipients and private sector taxpayers, how
much of the tax burden may fall on us? Property is the obvious
cash cow to replace the magic pudding economy mirage that is only
slowly fading under the threat of a credit downgrade. Will we lose
our AAA rating?
A new report for the Foundation for Young Australians has added to
the skills debate, with its research into skills required by
employers, defining seven job clusters in which a basket of
closely related and portable skills will enable job mobility and
career durability, a great opportunity for property.
level of personal interaction skills – for retail, sales,
hospitality, and more
skills for construction, production, and maintenance
– they are
essential for the retirement living and health care industries
working in administration
facet of design is essential for property and in daily use
in information, education and business services
geeks with high level digital and technological skills.
Each cluster offers a number of career choices and many have been
Give the kids a job
My annual plea. We were all new graduates once. How did we get
started? Someone kind tucked us in at the bottom of the pile,
hoping that we would learn from our mistakes, as they occasionally
had to crack the whip. And we did.
There’s a fresh batch ready to be beaten into shape. They will
learn and they will develop the needed skills. They are the future
of our industry. Go for it, with a bit of tough love they will
Women are making progress
Gender diversity has risen in priority in the property industry.
Research from Avdiev’s
Business Leaders in ASX Property Companies, identified that there
has been a 9% increase in women directors and senior management in
the 18 months since our 2015 report was issued. This is a
substantial change but lags behind the 12% increase seen in the
new edition of the Women Business Leaders in ASX Top 300
Companies, drawn from all industry sectors.
The High Court of Australia has its first female Chief Justice.
The Master Builders Association has two female state presidents in
ACT and Victoria.
A woman conceived the “Mediscare” campaign.
Gender equality is on the way. It also gives women permission to
use men’s language (Financial Times 10.12.16). What a relief – my
favourite T-Shirt slogan defines stress in totally blokey terms
and gives me great comfort and joy when I wear it.
Santa Baby … …
Every year I’ve asked for a gift or three, it’s time to
I see a great opportunity for you – form a union.
Gift givers and joy bringers of the world – UNITE!
Don’t know where to start? WikiHOW will tell you. Your global
colleagues – Papa Noel, Dun Che Lao Ren, Did Moroz and Noel Baba –
could get together, co-opt the others and spread some comfort and
joy around the world this Christmas. It’s sorely needed.
Merry Christmas, Happy
Holidays, Seasons Greetings and a productive, innovative and
prosperous New Year. We look forward to sharing in your success.