An upbeat Christmas Update from Avdiev

How good is Australia? Continuous economic growth since those terrible 1990s in this wonderful country which the rest of the world envies and tries to be part of.

So why are we Aussies not counting our blessings, not spending our latest tax cuts but paying down the debts run up during the last property bubble? A belated spurt of financial prudence and numeracy in spite of our shameful standing in the global education stakes?  We’ve stopped shopping and retail is on its knees.

Let’s be positive. It’s worse elsewhere. UK is in the run up to the Brexit election, the EU has run out of puff, the US is in the throes of impeachment proceedings, but with a nationalist agenda and 3.5% unemployment the economy is strong and grew 266,000 jobs in November. It’s also abandoning its world policeman status.

Has Islamic State really been defeated or just fragmented? Their women and children are sitting in camps waiting to be repatriated to homelands which don’t want them, but are now forced to take the terrorists back. Another lone wolf terrorist attack on London Bridge – how many more are expected during the festive season? Can they be prevented?

China keeps flexing its muscles all over Asia, Hong Kong is making a brave stand, will Taiwan be next?

The nukes in North Korea keep growing, the Amazon forests are burning and the real threat of climate change as well as the hysteria is the latest addition to the list of potential global disasters in the media.

Who’s calling for much needed economic reform here? Our Reserve Bank, our Treasurer and the business community. After the May Federal Election we have a new Government, but the new Senate is as recalcitrant as the old. Patience and persistence pays and reform is creeping in even though it’s slow and painful. Do we need a short sharp recession, like the one we had to have, to remind us what hard times are really like?

Salaries in the general workforce have stagnated, but property is still ahead. Casual work and underemployment is rising and creating anxiety. Is underpayment of workers deliberate or a result of complex industrial negotiations, rulings and regulations? It’s been identified and being dealt with.

Business conditions are sound, we have a $7.9 billion current account surplus, but consumer confidence is at an all time low.  We’ve caught the global malaise – the future, the government, the bureaucrats and political systems are not to be trusted!

The stock market is fluctuating.  A Santa rally or a correction in the new year? 

The property cycles keep moving along…

The residential property bubble – it’s on again!  Even though the big 4 banks are slow to lend in the aftermath of the Banking Royal Commission, non-bank lending is flourishing.

The owners are back in the market and throwing caution to the wind.  The dramatic and rapid fall in interest rates (thanks RBA) has spooked investors but energised new owners to get in while they still can.  The price rise has been the fastest in history.

Residential Development had almost stopped, there will be shortages before long.  Construction related staff has moved to infrastructure, such as Melbourne rail and freeway projects and the new Western Sydney Airport.

The latest Update to the Avdiev Report shows that the Building, Design and Construction sector still has staff shortages.  Young technical discipline graduates are lucky in their choice of tertiary education, focusing on hard core skills, unlike their peers with humanities, social issue and other soft skill degrees.

The building and cladding crisis
Are the building defects and cladding issues finally being taken seriously and addressed nationally?  A staggering number of buildings, not only apartment blocks but major government and commercial buildings have been identified and are on the list for remediation.  Is the indemnity insurance problem getting top priority?

The REITs – listed and unlisted
Australia is hot property, still an attraction for cashed up global funds.  Competition for premium property in politically secure locations is lively, the locals are battling to keep up.  But the opportunity to remix Aussie portfolios is too good to miss, and they are reporting excellent results in both camps.

Retail Property is suffering, but changing rapidly.  New retailers with innovative products and services using delayed gratification payments are in the market.  Delivery companies are eating the lunch of the restaurant trade.

Retail property owners are converting their shopping centres into “pleasure palaces” – mixed use concepts to attract the reluctant spenders.  Will they be encouraged by the Black Friday spending spree or will it all fizzle out by Christmas?

The Retirement Living & Aged Care sector is continually expanding to keep up with our ageing population, but not keeping up with the quality of services required – the Royal Commission is uncovering horror stories of neglect.

By request from subscribers eight new Aged Care and Retirement Village positions have been added again this year, reflecting the continuing growth in the sector.

Gender diversity
The property and construction industry needs to attract women.  Women are reluctant to join or review their future while on leave and decide to find a different career.  Desperate companies are anxious to appoint experienced women to their Boards.  But it takes time and effort and effective policies to build a pipeline of well trained women with experience in front line positions with bottom line accountability to take on such roles.

Education and the kids
Now here’s a tale of woe.  The rise in funding produced falling scores over 15 years in Australian schools in reading, maths and science, low on the global scale.  What’s the definition of insanity?  Throwing more money at an existing problem and expecting a different result. It’s time for a change.

No wonder Universities are running remedial pre-entry courses to ensure their first year students are fit to learn. When they’re out with a degree, will you give the kids a job?

Santa Baby… … here I come again… please bring joy and good cheer to the world and all us grumpy Aussies. Help us all face the future with an open mind, creativity and the courage to adapt.

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 2020.