Melbourne Market Update – Winter 2017
As I sat down to write this in the early hours of the morning, it was 4 degrees – and yet, it does not feel right to call this the Winter Market Update. The wintry weather does not resemble the market we find ourselves in, with things really heating up to a hot hot hot status!
That and my coffee was hot.
In our Autumn Update in March, we suggested that activity was strong with the likelihood that the architectural and interiors market had reached a plateau at a relatively high level.
We can now report that activity in the form of new positions listed has kicked up to an even higher level, with many project sectors all demanding new staff at various levels in both the Architecture and Interior Design markets.
What projects are out there?
In terms of projects, the residential apartment market in the inner city remains positive, along with town house style projects that have a distinct design edge. There have also been many high profile taller towers with mixed used components, either hotel or commercial that have been given the go ahead, with these projects starting to build teams that demand the 3 Ds: design; delivery; and documentation.
Interior Designers are also in high demand across the hotel, apartment, and commercial sectors, with some very high end large scale projects gearing up, along with smaller boutique hospitality projects kicking along at break neck speed.
Institutional projects in both education and health sectors have seen a resurgence, with a demand for new staff primarily in the technical documentation stages. Revit skills are a definitive requirement in the majority of these roles.
A number of high profile commercial developments have been committed based on a high uptake of large corporate tenants, and the market is looking for a clear direction as to what uptake will occur in older commercial buildings – something to keep an eye on into next year.
The tunnel: Melbourne Metro Project
At the time of writing, the Melbourne Metro Project has been announced, with the Cross Yarra Partnership (CYP) consortium being chosen as the preferred bidder, so Melbourne is now entering the realm of a new major infrastructure project and all the action that entails.
More details will become available in the coming weeks, with roles for those specialising in rail, transport, and infrastructure already in high demand. The entire country seems gripped with infrastructure projects, with other rail and transport projects underway in Victoria, New South Wales, and Queensland.
We note that all of these infrastructure projects will be Revit based.
What are firms looking for when hiring?
Over the last three months, we have seen an increase in the number of strategic roles aimed at talented Design and Management Architects and Interior Designers at an Associate level and above. Practices are looking for professionals who can lead concepts and have clear input into the overall design direction along with generating new projects. The benefit for those moving into these strategic roles is the strong career advancement opportunities that arise from being a part of the overall strategic direction of the practice.
We’ve been working with many quality studios who are really focussed on the career development of their staff, with open programs that clearly detail how an individual can progress through the various stages into key roles within that practice, which enables professionals in mid-career stages to focus on their continuing development.
A reminder here to studios that are currently too busy to focus on the career development of their staff – career development pathways is a priority for many new job seekers, and a key reason for those looking to make a move to a new role.
Permanent or Contract?
Regarding new incoming positions, we are seeing a strong mix of permanent AND contract roles.
A number of project specific positions are offering strong hourly rates and longer-term contracts. If contracting is an option for you, the great rates and pay on offer for all hours worked can be an attractive option. From a business side, contracting is a good choice for studios who are experiencing an overload of work in the medium term.
Increasingly, we are hearing from both employers and job seekers alike that ‘cultural fit’ is high on the consideration list for employment decisions. But what does cultural fit really mean?
In simple terms, if both parties have a mutual design ethos, connect during the interview process (and the money is right), then, on the surface, we have a cultural fit. However, greater considerations come into the equation, and it is really individual subjective considerations that count.
Subjective considerations can be elements such as does a studio have a collaborative environment, or not. Then there are always emerging design studios with a difference that will attract likeminded people.
Other studios prefer to employ staff from a particular tertiary qualification, whereas others demand diversity, with some looking for a diversity of nationality or international experience or gender, whereas others are not focused directly on these elements.
Of course, another consideration is the social side of work: some offices are known for having an active social agenda and environment, whereas others don’t.
It really comes down to potential employers being able to communicate a clear vision of what their culture is, and for the employee to have their own clear expectation to ensure that there is a match with the firm they are considering joining. It is certainly something that we are mindful of when introducing an employer to a potential recruit, as this ensures a greater chance of a positive long-term outcome.
Changes in technology requirements and expectations have had a significant impact. In our updated Salary Guides, we have formally incorporated them into our rates and salaries.
Revit, and to a lesser degree ArchiCAD, demand is at an all-time high, and a requirement in the majority of roles now, whether for Design Architects, Interior Designers, Project Architects along with team-based technician roles. So up skilling of architects, interior designers or draftspeople without BIM experience is vital.
Some firms are open to retraining from AutoCAD, however most of those roles require upwards of 12 months experience using Revit in a professional environment.
There are a lot of questions about what percentage of firms remain an AutoCAD environment versus Revit and ArchiCAD, however, from a recruitment perspective, even studios who are predominantly AutoCAD, are slowly transitioning to Revit. This has resulted in a strong preference to recruiting those with Revit exposure.
We find that most AutoCAD-based projects are “legacy projects”, meaning that the transition to BIM across the industry is now in excess of 90%.
Economic and statutory factors
Stepping away from recruitment factors, let’s look at the market from an economic perspective.
Interest rates have held at historically low levels for some time now, and while there is some feeling that they will rise in the medium term, they are currently stable. Just have a look at the rates for savings investments currently. This suggests interest rates will remain close to their current level for the medium term, meaning finance costs will be attractive to new development. Interest rates are also a “double edged sword” in that The Reserve Bank will generally use low interest rates as a mechanism to stimulate an economy and raise rates as a method of tempering an overheated economy.
We are therefore in unusual times in Melbourne and Sydney in that the construction industry is very strong at a time when other cities and industries are feeling difficult economic times, so low interest rates are a way of stimulating those industries, whereas demand and population growth in Melbourne and Sydney mean that activity levels are high, and may even be pushed along further due to low interest rates.
Down the track when interest rates do rise (and they will), this means that the economy generally is improving, however that would mean some downward pressure on construction activity when rates do begin to rise.
Population growth for Melbourne continues to grow, underpinning demand for residential developments, and by extension other projects. We can see that the goal is now for well-designed inner-city developments that have diversity in terms of a mix of apartments that can attract a range of tenants and owners, from single professionals, downsizers, through to families.
This diversity is being welcomed as a move away from apartments with minimal floor sizes and limited amenity.
Rates and salaries
As always around mid-year, we update our Rate and Salary guides based on the market for July 2017. The Awards Rates were increased by the Fair Work Commission (FWC) by 3.3% effective 1st July, 2017, as per statutory requirements, however when adjusting our own guides, we take into consideration other economic factors such as market growth in relation to the consumer price index (CPI).
We have noticed, that while market growth is positive, this does not equate to every practice booming along. Some groups, whose workload has been at an average level, have noted that they have not been able to raise salaries at recent mid-year reviews.
The decision not to raise salaries is a result of practices being mindful of business sustainability, as despite a busy overall market, there are specific sectors within the market that are not at peak capacity.
The Victorian Comprehensive Cancer Centre – designed by Silver Thomas, Designinc, and McBride Charles Ryan. Image by Peter Bennets (Plenary Group). Via Architecture & Design.
On a positive, we have been treated once again to some great projects at the recent Australian Institute of Architects Awards – Victoria, with the Victorian Comprehensive Cancer Centre (VCCC) taking out the Victorian Architecture Medal for 2017 and the William Wardle Award for Public Architecture.
It was also the first time that the Melbourne Prize was awarded to two projects: the Tanderrum Bridge by John Wardle Architects and NADAA in collaboration, and the 2016 NGV Commission by [email protected] Studio Architects. The quality and diversity of projects in the Awards this year was quite honestly astounding.
With high activity levels across the board, we look forward to the second half of 2017 with a positive outlook!
We recently heard of the early passing of John Tremayne, one of our founding Partners here at Bloomfield Tremayne & Partners. He was an integral part of our team from 1986-2000, and will be fondly remembered by our team.
Our condolences and thoughts are with John’s family.
Partner – BT&P Melbourne