As we rush headlong to the end of 2024, there’s plenty to talk about and lots of questions to be asked about activity in the industry as we progress into 2025.

For many, the last year has seen a range of challenges in terms of new projects committing, general confidence levels and changing demand. This has caused ramifications for recruitment across many studios. In our mid-year update, we experienced a market dependent on project activity levels, and studios were either busy or quiet; it was a market of high confidence or low pessimism. This sentiment has continued until the end of 2024, and in many ways, the industry is expecting similar issues into the first half of 2025.

Issues of finance availability endure, with high construction costs and interest rates now expected to remain at current levels well into 2025. Due to the duration we’ve been seeing these continue, confidence levels have been affected in some areas. Certainly, there are many practices busy in early front-end concept and feasibility stages, but there’s uncertainty as to when projects will get the full go ahead.

Architecture

When looking across different project sectors, we’re still in a market where you can’t point and say one sector is stronger than another. Larger issues are impacting development across a number of sectors, rather than a traditional cyclical downturn in one sector, or demand and supply issues overall.

The demand for residential property of all types is extremely high, yet the apartment sector is still tight, generally based on projects being feasible. However, boutique, high-end apartments on quality sites remain strong. The high-end residential sector is active as well, with some incredible owner-occupied projects in the $10M-$20M scale currently underway. Data centres and high-tech warehousing and distribution sectors are also incredibly strong.

State government funding is happening in some sectors, although no clear sector is seeing an abundance of funding; so again, studios who focus heavily on the institutional space are either busy or quiet.

Recent zoning changes in the apartment and mixed-use sectors have been welcomed but there’s no immediate upturn at this stage. Similarly, with social housing, we are yet to see much traction, but we are looking forward to understanding the Federal and State Government’s stance on this.

Interior Design

In terms of Interior roles, we’ve seen consistent activity across commercial workspace, hospitality and multi-residential sectors. The push from studios has been for talented, mid to senior level Designers with broadly based, all-round skills who can be part of client briefing and concept stages and remain hand-on during delivery.

As a result of the uncertainty we’ve seen, newly created roles have been at a lower level throughout 2024 in comparison to 2023. With various studios having made redundancies throughout the year, competition has been high for newly created roles. Additionally, when a studio is recruiting, it’s often for highly specific project experience or a particular set of skills, so practices have been taking their time to analyse candidates’ backgrounds in greater detail than usual. Having said that, there have been numerous instances where a studio has won projects and needed to recruit team members with high urgency. Based on this, it’s a hard market to predict what type of roles will come up and when. From a recruitment perspective, it’s a very reactive market.

We continue to see strategic roles coming through at senior levels, often with design leadership, client management and business development capabilities across both Architecture and Interiors. Rare project skills are also in demand.

The past three months has seen an increase in project specific roles calling for Independent Contractors. This is generally when a project lands, or the next stage of a project is confirmed, but we anticipate this trend to continue into the first half of 2025.

To wrap it all up, we expect to see 2025 start up with similar challenges to those seen and experienced throughout this year. Some practices remain upbeat and are anticipating a strong start, and other studios remain uncertain, with projects not yet having commitment come through in the last few weeks of the year.

Ultimately it’s not an easy market to read or predict with complete clarity, that said we look forward to seeing what 2025 brings and working with our wonderful Clients and Candidates. On this note may we wish everyone a very safe and happy festive season. See you next year!

Bruce Whetters

Partner – Melbourne