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@ asyncmind
2025-02-21 22:39:09
How much will the Australian property market need to fall to get cheal local highly skilled labour?
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For the Australian property market to fall enough to make local, highly skilled labor significantly cheaper, the decline would have to be substantial, but the exact percentage depends on several key factors:
1. Current Housing Costs vs. Wages
In major cities like Sydney and Melbourne, housing costs (rent and mortgages) consume a significant portion of wages.
If housing costs drop substantially, local workers may accept lower wages since their cost of living is lower.
2. Historical Context
During the 2008 financial crisis, property prices in many Western countries dropped by 20-40%, but wages didn’t adjust proportionally.
Australia's housing market is one of the most overvalued globally, with price-to-income ratios among the highest in the world.
A major correction (30-50%) could make skilled labor more affordable, but such a drop would likely trigger economic instability.
3. Supply vs. Demand in Labour Markets
High property prices force skilled workers to demand higher wages or leave for better-paying regions.
If property prices drop significantly (e.g., 40%), some workers may accept lower wages because their cost of living has decreased.
4. Mortgage Debt & Economic Shock
Many Australian households have high mortgage debt. If prices fall too much, a debt crisis could occur, leading to unemployment and reduced spending power.
A 30-50% drop would likely trigger economic distress but could lead to cheaper skilled labor in a recession scenario.
Estimated Fall Required for Impact
10-20% fall: Minimal effect on wages, as costs remain high.
30-40% fall: Some impact, allowing slightly lower wage expectations.
50%+ fall: Significant impact, making local labor substantially cheaper but at the cost of major financial instability.
Alternative Solutions
Instead of waiting for a crash, policies like zoning reform, more affordable housing initiatives, or wage subsidies could make skilled labor more accessible without a financial crisis.
Would you like a breakdown of how different sectors might be affected?