Melbourne Market Update – Autumn 2017
Early indications are very sound for 2017 – we are off to a great start, with momentum continuing strongly from 2016. Our usual “litmus test” period of mid-February to mid-March for activity levels suggests 2017 will be a good year – with some changes to the overall mix of projects, meaning a really broad range of new projects commencing, and whilst some studios will see a tightening of their workload, activity across the industry looks to be broadly based and very consistent.
The breadth of work is crossing over from architecture to interiors, with good scope across many sectors suggesting a consistent 2017 ahead. In short, we are describing the market as having reached a plateau of sorts, however with a solid outlook ahead.
The changes as the year develops are being driven by State Government, and when it comes to tall towers combined with a subtle lowering of off-shore financing, the likelihood of less tall pencil apartment towers in the CBD is real. This has been off-set by some sizeable city fringe residential projects that are of high quality and are showing no signs of tapering off.
Design focused inner urban residential developments on great sites are still going strong, with the next ring of middle suburban areas resurrecting the word “townhouse”- something we haven’t heard for a while – think a small backyard with enough room to swing a bat!
In short, high quality, livable and sustainable housing solutions of different scales will continue to be a key factor within the real estate and development market.
We are also hearing of mixed use hotel and apartment towers with greater public amenity within the city which will continue to see interesting, skyline shaping buildings continue in the CBD, subject to stringent planning requirements.
Outside of the residential market we have been asked to build teams on several large “one-off” projects that include retail, hotel, civic and institutional, all ranging between $250M and $800M, with these projects offering exceptional experience and opportunity for those wanting to work in multi-disciplinary teams. These projects are starting between March and May with things really starting to heat up on the recruitment side in this space. These big projects are tending to demand longer hours than the norm, but are loading salaries to take this into account, and some exceptional packages are starting to appear well above industry levels.
We are enjoying this market from a recruitment point of view, with roles available from design, delivery, documentation and site administration, in turn those looking for new roles are able to consider a broad range of projects, and are also able to consider focusing particular project sectors if they wish.
Revit demand continues, with more opportunities than there are people available, and increasingly expectations for Design Architects, Project Architects and Interior Designers to now be capable Revit users, in addition to more technical documentation roles.
We are currently reviewing our Rate and Salary schedules early this year, with expectations that those having June reviews will have increases above CPI at this time.
The “elephant the room” in the second half of 2017 is the Metro Rail Project, with feedback from the teams in contention suggesting that this 6+ year project will demand recruitment on a large scale (dependent on the winning consortia) which will likely mean a huge recruitment drive in an already busy market in the latter part of 2017.
So in Architecture we are also looking for professionals with project experience in aged care, industrial, hotel and commercial projects, with some great roles looking for specific experience in these areas.
Positions for Interior Designers are spread across some really “edgy” projects with design that is all about mood, materials and your next weekend away from home. We are really excited about early concepts we are seeing with some great clients, and this year will see many small design studios starting to “make projects that we haven’t seen before”. With some concepts already designed and now being fitted out – we’re excited and look forward to them being a part of the Melbourne scene. We are also seeing a pending invasion of large offshore retailers coming this way – seemingly at the expense of local retailers, so some see this as an exciting international phase, with others being more circumspect about the impact on local retailers.
The unknowns on the horizon in 2017 are largely reliant on international economics – A “Brexit” event, a credit crunch in China, or Trump moment that no one expects. Any of which could have significant impacts on credit availability across the globe, although at this point the likelihood or indeed impact on any of the effects would be better understood by smarter brains than mine.
So with indicators all relatively upbeat, the year ahead looks positive, and whilst we are hearing economists talking positively about a continued low interest rate environment, and others feeling we may we have reached the top of the property cycle, – no one really knows.
We are already working with studios who are recruiting heavily early within the year, others will be dropping some staff. As the market finds itself going into the second quarter of the year, there are some great roles and opportunities there for those who are looking for forward momentum in 2017.
Partner – BT&P Melbourne