!['The golden goose is dead and everybody is dying in the ditch', says Callum Fraser. But for architects with exposure to ...](/content/dam/images/g/t/t/i/g/g/image.related.afrArticleLead.620x350.gtstpx.png/1484747014996.jpg)
ElenbergFraser, one of Australia's most prolific apartment designers, will cut architects this year as the number of new projects drops off in its home state of Victoria.
The Melbourne-based firm, which boosted its architects by 15 per cent last year and designed Fragrance Group's 79-level "Beyonce" Premier Tower – which broke ground on Wednesday – will reduce staffing this year from the current 245, head Callum Fraser said.
The frenzy of activity that drove approvals of apartments to record highs has dropped and, while many existing projects are being completed, tighter planning regulations in Victoria and regulator-driven lending curbs to investors has brought the market to a near-halt, Mr Fraser said.
"Architects are bleeding to death," he told The Australian Financial Review. "The golden goose is dead and everybody is dying in the ditch. It's almost impossible for developers to find debt funding on large projects unless they have an avenue into offshore funds. A lot of developers who bought land at the peak of the market are now finding the projects don't work commercially. Those projects will simply not proceed."
![Fewer apartment towers like this to come: Artist's impression of the Elenberg Fraser-designed Premier Tower planned for ...](/content/dam/images/g/t/t/k/7/b/image.imgtype.afrArticleInline.620x0.png/1484725839097.jpg)
Headcount reduction
Mr Fraser, whose firm employed 140 architects in Melbourne, 30 in Brisbane and 75 in Vietnam, declined to put a figure on the planned headcount reduction but he said that the job losses would be limited to Melbourne.
After a buoyant few years that have seen firms rebuild staffing numbers, the changing market in Australia and abroad is forcing design companies – the canaries in the construction coalmine – to retool as they adjust to clients' changing expectations.
The slowing of an apartment market that has buoyed construction after the resources industry slowdown is one part of it, but is not the only part and it is not all negative.
Australia's largest design firm, Woods Bagot, cut 58 architects over the past year and slipped to seventh place in the World Architecture 100 ranking from sixth last year as the Brexit vote stalled London-based projects, the Middle East market ebbed and residential work slowed in Europe and China.
![Banking on more infrastructure-related spend: the Woods Bagot-designed Stage 1 of Wyndham Walk, Sydney.](/content/dam/images/g/t/t/4/u/l/image.imgtype.afrArticleInline.620x0.png/1484725839158.jpg)
Global opportunities are great
Within the Australian market, design work for mixed-used transport oriented developments that would accompany rail infrastructure spend in areas such as greater Sydney would offset any slowdown it experienced in residential work, Woods Bagot regional chairman Mark Mitcheson-Low said.
On a global level, despite short-term uncertainty over Brexit and the ascendancy of Donald Trump to the US presidency, the opportunities were great, Woods Bagot's London-based chief executive Nik Karalis said.
"In the US, all the airports are screaming with the inability to cope with increased air traffic," Mr Karalis said. "There's still this momentum of urbanisation and travel that fuels global economies. It's tapping into the right levels of that."
![The Woods Bagot-designed Sydney University Business School.](/content/dam/images/g/t/t/4/u/j/image.imgtype.afrArticleInline.620x0.png/1484725839239.jpg)
Other firms are also growing. Cox Architecture, which specialises in infrastructure such as sporting stadiums, boosted its architect numbers over the past year to 302 from 263.
"Our revenues and profit are up on last year, despite variable performances across the different states," director Alastair Richardson said.
Infrastructure growth
GHD Woodhead, which boosted its registered architects to 163 from 116 a year earlier, said its growth also came from infrastructure-related work, such as hospitals, aviation terminals, underground rail and bus terminals and research and defence facilities. It expected to expand this year in Sydney and Melbourne, architectural practice head Michael Hegarty said.
Other Australians on the WA100 list for 2017 were Bates Smart, with 250 architects (up from 200) and Buchan Group (204, up from 195), as well as first-time entrants Architectus (100) and Hames Sharley (92). Hassell, Australia's second-largest firm, did not enter the ranking. A spokesman told The Australian Financial Review the firm had a global permanent headcount – of all staff, not just architects – of about 750.
This demand was still proving lucrative for experienced architects – those with 10 to 15 years' experience – who were asking for salary hikes of between 10 per cent and 25 per cent to change jobs, directors of large firms said.
Top architects were receiving annual pay increases at more than double the rate of the wider property industry, the latest Avdiev Property Remuneration Report showed in October.
But for firms dependent on apartments, the picture was very different. Mr Fraser, who said his firm employed young architects and trained them in-house, said a tap had been turned off.
"[Last year] was the year government killed the residential sales market," he said. "The APRA regulation changes and the state government planning policies have completely decimated the apartment market in Victoria."