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An Avdiev Update - The Wages Issue

Happy New Year, Happy Australia Day and thank you Mum and Dad for settling in Australia.

2018 has started with good news all round.

Australia follows the US economy which is enjoying strong growth, low unemployment and a continuing upward trend and sentiment despite the Wall Street wobbles.  The US Senate has just signed a bipartisan government funding deal ensuring stability for two years and giving the American President the opportunity to claim that he is draining the swamp – one tweet at a time.

Our property markets are solid and active, so are the employment and reward opportunities for property and construction people.  As the residential market bubble slowly deflates and gives the RBA reason to feel positive about the changes in our economy, the multiskilled people of our industry and their employers will move from designing and building multi residential jobs to infrastructure related projects.

The RBA’s dilemma

However, the Reserve Bank of Australia still keeps the rates low and frets about the high level of debt in the community.  Under pressure, the banks have been discovering and dealing with their “liar loans”, the US no-doc loan scenario won’t be repeated here.  With any luck many will be substantially reduced before the bubble finally bursts after 104 quarters (28 years) of continuous economic growth in Australia.

Avdiev has been researching and reporting property and construction salaries during that time.

Australia has the second highest minimum wage in the world (OECD report) and the lowest interest rates in 20 + years.

Excess borrowing is a self inflicted injury, but with a low level of financial literacy in the community, the push to get on the property ladder, government incentives for first home buyers and the availability of easy money it’s hard to resist.

The changing pay conditions

Despite the economic growth, our two speed, East / West, shifting sector economy has dampened profits and confidence and resulted in stagnant wage growth in the general workforce.  It’s now beginning to bite.

The fair pay / low pay issue is occupying the media, but there won’t be a “pay scare” to follow last year’s “mediscare” as the economy continues to grow steadily and company profits flow through to the workforce as well as the shareholders.

A major mining employer has announced an excellent profit result and predicts pressure for wage rises from staff to get their fair share. Others will follow.

Property has been doing well – property industry pay levels have been running above general industry averages for some years, especially in active market sectors, and are set to continue.

The latest Avdiev Survey is underway

This is the source of salary data from property and construction employers for the Avdiev Report and a valuable tool for our industry.

Please contribute salary data and help us provide credible up to date information about the real remuneration situation in the industry to counter any extraordinary promises to your staff about salary levels in greener pastures made by head hunters acting for cashed up rivals .

We also ask about business conditions, innovation, discrimination and harassment policies and resolution processes.  They may have been upgraded in the light of current events and we will report responses.

You’ll be rewarded with a four page summary of the findings and a substantial discount on the cost of the Avdiev Property Industry Report © 2018, to be published in March.

To contribute please follow the link to the Survey: Avdiev February Survey

Many economists’ reports argue that staff should ask their employers for pay rises to keep the dollar moving through the economy and help the retail industry cope with its transition.

The old is new again

So where and whom do they go to ask?  It’s a challenge to keep up with the changing job titles for what was once plain old “personnel”.

Next time one of your team goes to discuss a salary rise with your “Chief Happiness Officer”, what can you expect?

That depends on the state of your company’s finances, whether and what kind of profit share provisions are in place and how far down the company hierarchy they extend.  The Avdiev Report has the answers.

For property, where there’s work, there will be pay rises.

The world is awash with investment money looking for safe havens.  New asset classes are being developed to meet the demand.  As new industries develop, property adapts to meet space demand.

The new, new thing…

Student housing was a new product 15 years ago, now it’s an accepted and successful profit generating asset class.  Co-working spaces are being rapidly developed to meet the need to house young start-ups, mature consultants, and others tired of working from home.  People are social animals, human interaction provides opportunities for coffee meetings, stimulates ideas and avoids isolation.

The latest is BTR – build to rent developments and several are in progress.  2018 has been described as “The Year of the Sheddies” – the logistics sector is expanding in response to digital economy storage requirements as well as new retail initiatives.

The pipeline is assured, what about the skills of the people?  Core skills requirements are changing.  Subscribers to the March 2017 Avdiev Report described new skill sets favoured by employers which focused on social and communication skills and cultural fit as well as technical skills.

Skills, pay and gender

Where and how will the next generation be taught theses skills?

The latest annual Pacific Rim Real Estate Society’s property academics’ conference was held in Auckland in January 2018.  Its theme – “Property Research for our changing world” featured papers on traditional topics but also addressed behavioural changes, the future of work, Millennials and real estate, and developing business and professional values in the property graduate. Academics’ awareness of real world issues holds promise for the future of property graduates.

There’s a new focus on gender in New Zealand.  The media consensus is that the new Prime Minister’s popularity and pregnancy makes her bullet proof and assures her two terms in Parliament. Her government is introducing new gender pay equity laws. 
It’s early days, there are few details, whether it will pass parliament and how it will be accepted by employers is unknown.

In Australia, a major infrastructure and property company is not waiting for legislation.  After research, it’s introducing gender pay parity – adjusting the salary of women found to be paid less than their male colleagues throughout the whole business.  A great step in the right direction.

Are women making progress?

The 2018 Australian of the Year is a woman, a quantum physicist working in computing, no less!  What a role model for girls, encouragement to study STEM subjects in preparation for technical and digital careers. A big four accounting firm has appointed its first woman chair.

But industrial relations issues claimed another woman in a building related organisation in Queensland last year.  Would she have been treated differently in she were a man?

How men behave towards women in the workplace has been under intense scrutiny since the rise of the #MeToo movement.

Not just Hollywood but all walks of life and work are affected.  In any workplace, when bullying or sexual harassment issues arise the questions are – who’s got the power, whose job is at stake, can you deal with the issue on the spot, or do you remain a silent victim and join in the flood of accusations when the dam bursts?

Could women face a male backlash and retribution?  Could they be subject to accusations too?

When the #MeToo furore subsides, there may be a rational debate about the limits of relationships at work. The US Congress has banned liaisons between politicians and staff.  Will legislating against human nature be successful?

Meanwhile, try to remember what you did, when and to whom and hope it does not come back to bite you.

Happy Valentine’s Day.

A Christmas Update from Avdiev

Where has the year gone?

Another eventful year is hurtling to a close. What will 2018 bring?

Is a nuclear war to the North one tweet or one tantrum away, or is it just posturing for the folks back home who are losing faith in their leader?

Will Brexit finally happen, has Isis really been defeated, will the never ending territorial and political conflict in the Middle East be resolved with a relocation of a US embassy? How many more lone wolf terrorist attacks are expected during the festive season? Can they be prevented?

Let’s focus on the positive

Parliament has risen, but the political fall out continues. Will fringe parties dominate the debate and economic decisions in 2018? Is Australia irreversibly split along ethnic, cultural and social lines? Are we members of new political tribes?

Business conditions are strong and growing stronger, but consumer confidence is not keeping up. The future is not to be trusted.

The share market keeps rising. A Santa rally or a correction in the new year?

There is now a Royal Commission into the banks, their culture, reward structures and lending practices. Will it also look at the “Bank of Mum and Dad”, an emerging source of property finance for spoilt brats, or a lifeline for the struggle up the property ladder?

Non-bank lending entities are flourishing. Property finance has emerged as a new career option for former Prime Ministers, building directorship portfolios in a post political life. They come with lists of useful contacts and a pipeline to pools of funds.

The residential property bubble

Is it deflating in the “Superstar Cities” (RBA) of Sydney and Melbourne? Bad news for investors, but good news for first home buyers until the prices catch up with the government grants. Will they take the risk? With median house prices in middle ring suburbs reaching $1 million, paying off the mortgage presents a lifetime struggle and fear of interest rate fluctuations.

The Sirius building, a superb example of the brutalist architecture of the mid 20th Century on Sydney’s Rocks and well past its use by date as welfare housing is on the market after long delays.

History is up for sale – to free up much needed capital to provide low income housing elsewhere and a boon to property developers to capture land with glorious views and mega dollar profit potential.

Architects are lamenting, the selling agents are smiling and developers are salivating.

We’re up for grabs!

Our superstar cities and trophy buildings are still a great attraction for global funds. Competition for premium property is hot, the local REITs are battling to keep up. Generational change in the industry is freeing up tightly held assets.

In the latest global property deal our largest shopping centre landlord has accepted a takeover offer from a large European property owner to create a “global property giant” with 104 shopping malls in 27 retail markets around the world.

The property cycles

Property moves through predictable cycles. Development has moved into the construction phase and 2017 has been a year of staff shortages, head hunter strikes and salary rises.

Preliminary findings from research among property industry employers for the annual Avdiev Report shows that the Building and Construction sector has grown rapidly in staff numbers, especially on the contracts and project management side of the business. Young technical discipline graduates are getting jobs, unlike many other products of tertiary education which focuses on social issues, not hard core skills.

The flammable building cladding issue is finally being dealt with. In a gesture of goodwill and good PR, a Melbourne building company has decided to pay for the re-cladding of one of its residential towers. Government projects, often hospitals and other institutional buildings are also facing action.

The Retirement Living and Aged Care sector is expanding to keep up with our ageing population. By request from subscribers new Retirement Village Management positions have been added to cover the growth of responsibilities and staff numbers in the sector.

Retail property has a history of growth and change. Centres are being redeveloped and expanded, many have now reached a GLA of 100,000 m2.

The “Big Bad Retailer from Over There” has arrived. What effect will it have on the locals? They are fighting back, forming new alliances with start up delivery companies to keep their customers loyal and happy.

Gender diversity is good for business

2015 research (MSCI) has found that female leadership as well as general executive diversity in listed companies improves the bottom line. Women are making progress in other fields too, the

Australian Rugby Union has just appointed its first woman CEO.

But how do you keep them once you’ve got them? A Brisbane firm of architects with senior professionals of child bearing age has just built its own child care centre. Problem solved, continuity assured.

The future of work

The boom jobs v the doom jobs. In an increasingly automated future cognitive and high level technical skills, identified in RBA research in 2016, will be the winners at the top of the income scale.

At the low end there are the outsourced caring job – aged and child care workers and cleaners as well as Baristas and sales assistants.

The doom jobs are manual and middle management jobs, being replaced by robot workers.

Education and the kids

Recent NAPLAN results indicate that Australian secondary education standards, literacy and numeracy skills and civics knowledge are falling. What is the history of this slide and can it be fixed at tertiary level to give the graduates employable skills?

In defence of the kids – what chance have they got if they’ve been indulged all their lives, never been allowed to fail at school, taught by teachers graduated with low academic scores, given participation awards and encouraged into socially worthy tertiary studies.

Then they hit the business world, intense competition, economic survival and demanding employment conditions.

Reality bites – and it sucks for some. At least the kids joining the property industry come with some technical understanding, then it’s up to us to knock them into shape. They are adaptable, have great IT skills, but must learn to communicate and align with the culture and values of the company. When they do, they are a team to be proud of.

Santa Baby … …

Hang in there! No point in asking you for anything this year, you’ve got your hands full! Oh, those reindeer … …

Dasher’s done his dash, the rest are dual citizens and in no mood to provide benevolent transport services. It’s you who needs comfort and joy this Christmas.

Greetings to all

The Avdiev team wishes you a Merry Christmas, Happy Holidays, Seasons Greetings and a productive, innovative and successful New Year.

We look forward to sharing your success in 2018.

A Spring Update from Avdiev

Welcome to Spring and the threat of nuclear warfare to the North.

Could the “politics of moral panic” – the statues, the burqa and marital laws be replaced by the politics of reality in the media headlines?

One social issue has been dealt with swiftly by the High Court, ruling that the postal vote on one of the dominant issues can go ahead. Dual citizenship is next. Could Canberra now focus on the energy crisis, an improving economy, small business – the employers of over 40% of Australia’s work force and how to help them keeping the people productively employed?

The RBA has left interest rates on hold at 1.5% for the 13th time in a row, but sees improvement in the economy, as well as changes in its structure, unforeseen shocks and the influence of global policies on the Australian environment.

The Nukes

Will he, or won’t he? The North Korean dictator versus the tweeting US President: who will blink first?

Could the Russian President be right in his assessment that North Korea’s moves are designed to remove the sanctions so he can feed his people?

Meanwhile, the latest intercontinental ballistic missile is being made ready … …

Any current European or Middle Eastern crisis pales into insignificance in comparison.

Across the ditch

The Kiwis are in early election mode. The opposition is ahead in the polls, with a bright and shiny new leader as the media darling.

Has a stable government which delivered a healthy surplus and left NZ “relaxed and comfortable” and therefore bored and ready to try a new government again? We Aussies did in 2007, and look at us now!

Back at the Ranch

In a country where everyone except the Aboriginals has foreign ancestry, the High Court is taking its time to decide the dual nationality issues of our parliamentarians. Media joy – more manoeuvres, more posturing, more headlines.

The lowly paid worker in the broader Australian economy may get some welcome relief if the upturn in business conditions and employment translates into wage rises.

There is good news

As the RBA keeps record rates on hold it reports that the effect of the mining slump is coming to an end and foreshadows more benign conditions ahead, despite warnings of economic shocks between 2017 and 2021. Capital expenditure in private industry is rising, wages will follow.

In property, the feel good factor is palpable. Record turnouts of people to property related industry functions indicates the depth and longevity of positive conditions on our patch. There’s lots of action in every market sector.

The Asset Classes

Battles for supremacy, director spills and hostile takeover attempts dominate the listed property sector.

Foreign capital is still chasing our assets, the threat of a nuclear war is not yet a deterrent in the long term plans of the global sovereign funds.

There’s lots of media about a new asset class – “Build-to-Rent”. Heeding the old saying “the second mouse gets the cheese”, when will the discussions end and who will be the first to take the plunge?

The banks’ latest moves in residential lending are keeping mortgage activity at a modest level. Will this help to improve their market reputation?

They are aiding the RBA’s attempts to keep the bubble at bay. Is there still a bubble?

Prices and activity in residential real estate seem to be stable, will they ease?

Show me the Money

Staff shortages continue. The head hunter frenzy, especially in the design and construction markets has speeded up in the last few months.

Outrageous offers to change jobs are out there and are driving up the remuneration of existing staff. Employers are reluctant to lose good people and strive to match the offers.

Avdiev has been engaged on a number of consulting assignments to benchmark executives under threat in a very fast moving market.

It will be interesting to see if the modest pay rise predictions in the March 2017 Avdiev Property Industry Remuneration Report will hold or what effect the market frenzy has had on recent pay reviews.

The Avdiev Survey is underway, and if you have not yet contributed data, please do so before Monday 11 September. Click to contribute.

There are many other pay issues in our industry.

It’s not only the major players who are facing pay disputes which we have been asked to resolve. The politics of envy are alive and well among the minnows.

As companies grow and prosper disputes arise when remuneration needs to move to reflect the hard work and success of the chief. Issues such as sibling rivalries, many voices with differing points of view, attacks on the CEO’s level of reward, succession planning, retention, promotion and pay disparities emerge.

As independent property remuneration consultants with a wealth of salary and incentive data gathered from employers in all market sectors, we find totally impartial solutions acceptable to all parties – until the next family tiff or the next pay review.

At the top

Reports have emerged about the trend for reduction in pay for CEOs in major global companies. Outcries about the level of reward paid to recently departed CEOs of Australian top companies has increased resentment about the disparity in pay between the fat cats and the underlings.

There’s renewed debate about incentives, bonuses, retention payments and the criteria for such perks. Have incentives become an as-of-right expectation for meeting targets or should they be reserved for targets exceeded?

As the AGM season for ASX listed companies heats up and proxy advisors encourage major investors to vote against director and executive remuneration, ASIC the regulator, concerned about market destabilisation, has warned the proxy firms to curb their enthusiasm for negative advice.

Last but not least – The Women

Gender and pay differentials are still hot button issues. Among other entities Male Champions of Change, including those in property, are making valiant efforts to bridge the gap. But so far there is no clear evidence that feel good platitudes are showing quantifiable results that can be touted as a measure of real success.

The Inequality Issue

Following the Republican win in the US, the latest election result in the UK highlights the malaise and disenchantment of voters feeling left behind in the wealth stakes. Another terrorist attack in London has focused minds on the future. In an unprecedented and militant show of electoral interest and resentment, young British voters are reported to have come out and voted for populist promises of free education and other unattainable but seductive proposals.

Apart from the North – South divide which produced Brexit and the traditional class divide they are the group most feeling the inequality between the haves and the have nots. They most resent the baby boomers who came into a workforce to be offered plenty of job choices, opportunity to save, buy property and create a new social order.

A trip through history

It was 50 years ago today and the baby boomers’ social and moral revolution freed up society, gave us the Beatles’ Sergeant Peppers album, the founding of the Rolling Stone magazine, the first Wonder Woman movie and many more firsts.

At home, the 1967 Aboriginal Referendum created a new awareness of our obligation to recognise their place in our nation, but has not gone much further than lip service, even in times of prosperity. Australia’s had 26 years of continuous growth, even though the last lap was an anaemic 0.3% quarterly rise to produce a 1.7% annual uplift. We have now beaten the Dutch to hold the world record.

So why is no-one celebrating?

There’s a feeling of despondency and resentment here, encouraged by the media. Bad news is click bait. Wages in the general work force have stagnated, savings are being depleted to keep up with rising prices, retail spending fluctuates with changes in consumer sentiment and there’s growing resentment of the gap between the fat cat’s pay at the top of corporations and the average wage.

The casualisation of work and the threats it brings to the duration and security of employment, as well as the opportunities for scams, fraud and loss of income is weighing heavily on workers’ minds.

Shareholder revolts, Board attitudes to incentives revised in response and sluggish economic growth will bring changes at the top.

What about the rest?

Inequality is real but some of us are more equal than others.

For the time being, the property industry is living a charmed life. In a period of strong asset development and transaction activity we’ve had pay growth well above the rest of the general work force. In some pockets of the industry where there are shortages of competent staff, head hunter promises range from 10% to 20% salary increases to change jobs.

The modest pay rises forecast by subscribers to the latest Avdiev Property Industry Remuneration Report © may have to be substantially revised to accommodate the reality of competition for talent, push for more by an impatient team and the threat of losing the best performers.

The latest bank business survey reports an upbeat view of the Australian economy. That’s good for property.

With the building sector in construction phase competent and already well paid project managers and engineers are at a premium and with infrastructure ramping up will be a highly desirable pool of top talent to be sourced at any price.

The need to keep the team together will beat the need for pay moderation any time, for now.

What the next phase will bring depends on ongoing foreign investment and its availability, domestic industrial activity and / or peace and global influences on our economic growth.

But even within a prosperous industry there is an established hierarchy of status and remuneration levels. It’s the old food chain. The Funds are still at the top, controlling the flow of money cascading down into the ranks below.

They cleared out their middle ranks in the years following the GFC and are now enjoying rising asset prices, relatively secure income streams and stable, well paid teams.

Developers are paying well – they need operatives who can cope with growing demands from a sluggish bureaucracy, especially in NSW where Council amalgamations have created a hiatus in approval processes, promised to be resolved soon by the State government.

Aged Care and Retirement Living is the growth sector, their property people are rewarded above the carers who are among the lowest paid employees in the country.

Despite softness in consumer spending the Retail sector needs to continue its upgrade and redevelopment programs to stay competitive.

Real Estate Agents have enjoyed a period of busy transactional activity in all real estate sectors.

There is a hierarchy too among the consulting professions servicing their industry masters.

The technical consultants – Project Managers, Cost Consultants and Engineers have an expertise respected by their clients and reward their staff accordingly. Architects, once a revered profession have lost their standing over the years.

The media is airing the gripes and worries of young architects who, after many years of study are still earning the lowest pay among their industry peers. This is a legacy issue, too many graduates from Schools of Architecture, employer fees impacted by successive recessions and not recovered in good times, and the entry of a new profession into the Australian construction hierarchy have kept them at the bottom.

Enter the Project Managers

Superimposed on the design and construction process in the 1970s by a frustrated Federal bureaucrat as the solution to architects’ inability to manage and control finance and builders’ low quality products, this US import has acquired power and stature often well above their level of competence.

Not even the emergence of “starchitects” can recover this slide in status for the rest of the profession.

What hope for equal pay for women?

And then there’s the gender pay parity issue. In every market sector of property, the pay gap exists. In the general economy, the pay differential is reported as 17%, in Government the latest figure is 8%. What is it in ours? Will women ever catch up and who’s going to help them?

There is one level playing field – non-executive directors’ Board fees. The Avdiev ASX Non-Executive Directors’ Fees Reports give the collegiate fees – equal regardless of gender, ethnicity or age.

Proposals in the UK for reporting gender pay disparity by companies with 250 plus employees are mooted. What will this name and shame incentive achieve?

An April Update from Avdiev

Welcome to April. Our weather continues its historic pattern of droughts and flooding rains with an occasional cyclone thrown in to remind us who’s boss of Australia’s climate.
The North East of Australia has experienced the worst in 60 years, people and livestock have died in the aftermath, much damage has been done to buildings and infrastructure. But natural disasters keep money moving through the economy – builders, tradies, retailers, bridge and road works will get going, government assistance will help.

There is good news too. The RBA has kept rates on hold, the Federal Government is inching forward in its battle with the Senate. Could growth and jobs be the result of a reduction to company tax rates? Will business respond by expanding and hiring, or will they wait until the uncertainty about the fate of the cuts, the energy crisis and other nasties are resolved? Are they scared of the scare campaigns to come?

We’re part of the global community.

It’s not so benign on the global scene. Syria is deadly and unresolved, the EU’s migrant policy is now referred to as the Trojan Horse in other parts of Europe. North Korea is flexing its nuclear muscles. Terrorist attacks in London and St Petersburg unsettle the population, Brexit has begun, the new American president is nearing 100 days in office – what has been achieved?

But the consensus of the global economists is that the first world’s financial problems are easing and that more central banks will abandon the zero interest rate policies imposed in the wake of the GFC.

What more can Australia do to its tax, productivity and industrial relations to become globally competitive?

The workers are restless.

Employees in the general workforce in private industry are crying out for a pay rise - their wages have been stagnating for several years. Public sector remuneration has risen steadily during that time. The property industry has been lucky, we are a market sector with strong activity, a constant flow of foreign investment money and a shortage of good staff.

But in other markets whose time has gone conditions are grim. In a time of economic transition and disruption, jobs are destroyed, become obsolete, or are re-designed for new skills which old economy workers can’t or won’t learn in time to get one of the “new collar jobs” – a term coined to fit the new reality of work.

With the closure of power stations, bans on gas extraction and logging, there is great social upheaval. New environmental and social values have impacted many regional communities. It’s possums versus people, heavy industry workers versus greenies in Gippsland.

It’s hard to turn a logger into a barista, but how long before the pleasure of human interaction at the coffee shop disappears into a niche full of buttons to press for your selection?

The new jobs in the new economy are digitally based, and may not last long in a rapid pattern of work disruption, which may end up being automated.

When that happens, can one expect a robot to pay tax? How will governments collect revenue to survive? Could this spell the end of the cash economy?

The bubble – or the debt?

It’s back, but it never went away. With reassuring messages from the pundits - “it’s different this time, it’s only Sydney and Melbourne, the foreign investors will keep the market going” – concerns about the size of household and property debt receded for a while.

No more. With warnings about the dire effect of the growing debt on the economy, the RBA is leaving our record low interest rates on hold – its choices are: cool the residential market and bust the households, or leave rates on hold and watch the bubble grow.

At last the banks are beginning to remember the lessons they should have learnt after the last few property downturns. Will higher LVRs, caps or bans on investor lending kick in in time to prevent another rout in the market and allow an orderly fall to pre-bubble prices on the East Coast? None of the other states and regions are facing the same problems. But once the warnings outnumber the reassurances, it’s déjà vu all over again.

Confidence in residential property markets is a fragile thing. Home and apartment building makes a significant contribution to the economy. Curbs on foreign ownership could speed up the downward slide.

Supply and demand

The laws of supply and demand apply to employment too.

While the commercial / industrial sectors remain robust, employees are assured of a job. But with employers showing a strong preference for part time and short term positions, their jobs may not be as secure or well paid as before.

Subscribers to the latest Avdiev Report have reported that property people engaged in work requiring cognitive skills are rewarded above the general workforce average. And there is a significant differential between the seniors and the digi savvy, nimble juniors, especially in market sectors short of capable employees.

It’s not only technical capability that is valued now, but social skills and personal attributes that include good communication and cultural values.

So what will happen at the next pay reviews? Will women’s pay start an upward move to reward their softer skills?

The women

A bank has issued a gender equality bond to provide funding for the businesses that will champion gender equality. Will a woman administer the funds? The Prime Minister and his wife have funded a Women in Built Environment Scholarship established by the University of NSW to increase the number of women in leadership roles in the industry.

The Property Council has again elected a woman as its President for the next two years.
The Master Builders Association has appointed a woman as Federal CEO to support two female State Presidents. Will this make a difference to the culture of conflict and control in the building industry?

A woman has been elected Secretary of the ACTU. As its first female head, she seems intent on continuing the rich tradition of civil disobedience stating that she has no problems with workers breaking “unjust laws”.

What’s the prognosis for the interaction between the women on both sides of the CFMEU fence? If nothing else, it will be interesting to watch.

A New Year Update from Avdiev

Has there ever been a more exciting start to a new year?

The US election result has shaken up the world. It’s polarised the American people, global leaders are treading carefully in their response. Has Australia had a win with the refugee resettlement deal, or is that still uncertain?

Is the American President a total disaster or a refreshing change?

It’s a new scenario of post truth politics, alternative facts, fake news, a gun totin’ President who tweets from the hip keeping everyone guessing and the media busy – he’s their gift that keeps on giving.

Meanwhile, there’s Syria. The refugees in the Mediterranean on leaky inflatables, European border skirmishes, the rise of right wing nationalism and populism in the EU have lost the spotlight.

The Brexit fall out continues, the fall in the exchange rate has helped tourism and exports in Britain. What will it mean for the people who voted to leave?

Better news at home

Australia continues on its uncertain path in a transitional economy. There’s disruption everywhere – prop-tech – replacing real estate agents with technology, the gig economy, cyber warfare, the stock market fluctuations.

But overall, the news is positive. The RBA has identified a new Aussie battler subsector – the “hand to mouth households”, and, seeing an upturn at the end of the year, has left interest rates on hold again. The record trade surplus is a welcome surprise, residential property prices in Sydney and Melbourne remain strong. No rate cuts needed here.

But mortgage stress reports are rising, the banks are nudging up mortgage rates to protect themselves from defaults and their shareholders from lower returns. Some are cutting new investment loans, others are seizing the opportunity to grab market share.

Federal Parliament has resumed, a government senator has resigned to form his own party, another mini-rebel for the cross bench, the ideological and class warfare continues, the Prime Minister has found his inner mongrel and the Aussie debt just keeps on rising.

Has the Senate used the Christmas break to consider the fate of our economy and decided to put it ahead of their single issues focus and the need to preen for the media? It seems the watered down ABCC bill will get its teeth back.

On the Regional fly around

It’s still an East West divide.

Perth has always lived and died with the mining industry. It’s dealing with the 4th year of transition in its economy and the consequent commercial space oversupply. Darwin too has more than it needs, bullish predictions can lead enthusiastic developers astray.

NSW is still the stand out state. It has the lowest vacancy rates, a new popular Premier, well regarded for her energy, persistence and ability to get things done as Transport Minister and Treasurer.

Victoria – the state of tragedy. The Bourke Street massacre – one man in a red car, 6 pedestrians dead, many more injured, Melbourne is in mourning. It also leads Australia in car theft, jackings, aggravated burglaries and teenage prison riots. Victorians are angry and frightened, the human rights focus of the laws has lost its shine here, detracting from the Vic Government’s success in removing the detested level crossings.

South Australia – the State of Energy crisis. Renewables no longer cut it here as an energy source and solution. Major industries are at stake. Close your eyes and pray for the wind to blow, but not too hard!

Queensland – there’s lots of sunshine, but is there any action here, or will there be more enquiries? The job losses in the regions are severe. Will there be a snap election soon?

Tasmania – Clean and green. Can it grow to become the future food bowl of the Asian region? MONA, the Museum of Old and New Art, funded with private gambling proceeds, continues Hobart’s arts led recovery. Having re-invigorated the tourist industry and waterfront restaurants it is planning a major expansion on Macquarie Point. Can the owners continue keeping the bureaucrats at bay to achieve their goal?

The property sectors

The property investment community.

This is where the small fish funds get swallowed by bigger fish, until a whale comes along and another merger or acquisition is done. Landlords are doing well at least and are being warned not to get too greedy, tenants have long memories. Local buyers for prime property are outbid by foreign capital. We are a safe haven.

The developers

Development site price rises make it hard for new developments to stack up, the banks are cutting back on loans and raising cost of debt, mispriced residential product is not selling well and the cost of good staff is climbing.

Retirement living / aged care

The growth sector, the population is getting older, the oldies hold most of the wealth and demand good quality living and care when they retire. Long term profitability is this aim here.


Over all, retailers had a good Christmas, but medium size fashion retailers are going into administration. The landlords are not worried, new overseas brands entering the market will take up the retail space.

Real Estate

Are residential agents an endangered species? Lots of disruption here. Digital real estate platforms are eating into suburban agents’ territory. They are cutting commissions to attract listings, their customers have voted with their feet and are shopping for property on line. The major agents are buying up smaller boutiques with specialised skills. A sector in flux.

Built environment consultants

This sector provides services to investors and developers who call the shots and its financial heath and levels of activity depends on them and the property development cycle. Consultants are also questioning their role and power in the industry. Is it waning?


Having ended 2016 with disappointment at the watered down ABCC legislation, the change of heart by one of the Senators during the Christmas break has given builders and their subcontractors new hope for a more peaceful work environment this year. There’s hope for a broader review of industrial relations generally. Meanwhile, building activity is slowing, but salaries are rising.

Finance, Corporate and IT – The Back Room

Lots of disruption here. This is where digital technology and artificial intelligence (AI) will have most impact. Last year’s cute robot receptionist in a CBD foyer took our fancy. In 2017 an industry superfund is outsourcing customer service but not to an offshore provider. Roger the Robot a well programmed specialist is ready to help with your enquiries.

The Avdiev Report

Property is a dynamic industry. It grows, diversifies, changes, innovates and adapts to disruption.

We monitor, survey, collate and publish salary data and business feedback from our subscribers in the industry. In response to their requests we add new market sectors, new positions as they emerge and make changes as needed. The 2017 Avdiev Report to be published in mid March, has been extensively redesigned, contains 50 new positions, new detailed salary tables and over 20,000 incumbents in 10 market sectors.

The survey period is ending on 15 February. Please contribute your salary data now to get a 50% discount on the full price of the Report. You’re not alone in leaving it till the last minute, we’ve just had an influx of builders looking for a benchmark for their teams. Please do it now. CLICK HERE

Fat cat news

In response to community pressure and some interesting revelations about travel expenses, the Prime Minister has started to axe parliamentary entitlements. The Gold pass for MPs has gone. What’s next?

He’s also objecting to the $5.6 mil remuneration paid to a public servant – the highest pay in an Australian government business. The inequality of such pay with the rest of the community is glaring and changing attitudes and ambitions. Remuneration at the top end has been in the spotlight this year. The annual report season has seen a push for moderation in senior executive pay from shareholders. Overseas, investment banker bonuses have been under pressure. New global entrants into the local investment market intend to play a vital part in setting parameters around pay for performance, focusing on long term gains, not short term results.

The diversity argument

There’s gender diversity, cultural diversity, what about social diversity?

Snobbery is the elitism that dare not speak its name.

But it’s been sprung. A UK Report “Working class professionals earn 17% less than their peers” (FT 28.01.2017) points out UK’s social mobility pay gap.

What about Australia? Are you an ethnic? From the wrong side of the tracks? Did you go to the right school, play the right sport, make the right connections early in your school and working life? If you did, you’re in a board room at the top end of town right now.

Sisters are kicking goals

In footy mad Melbourne, the first match of the new women’s Australian Rules League (AFLW) attracted a lockout crowd. Will their Grand Final in March be held at the MCG? What’s the pay differential between them and the boofy blokes going to be?