In Sydney you would be hard pressed to find anyone paying off their home loans in less than 15 years. This begs the question, when AI (artificial intelligence) develops to disrupt current industries such as the taxi industry (for e.g. Uber’s self drving & Google self driving car) one must wonder what will happen to all these people who have lost their jobs due to no fault of their own? More importantly, what will happen to their mortgages and how will they afford to pay the repayments?
An article by Business Insider predicts Australia could lose up to 40% of jobs by 2030 due to automation. Also News.com.au stated 5 million jobs could disappear in 15 years time. The coming technological phenomenon is quite alarming as most people today are under the assumption that their job will be around for the life of their loan. Example’s of jobs which could be obsolete are:
- Truck Drivers
- Taxi Drivers
- Factory Workers
- Retail clerks
We have reached as critical point because over the past 150 years technlogy has created more jobs than it has made redundent however with the advantation of moores doubling computer processing power every 18 months on average. Technology is at a tipping point, but you might ask how would this effect house prices?
When unemployment rises, so too does weakness in the economy. We are already at record low interest rates. If 40% of the workforce are unemployed then demand will exceed supply by 40% in theory and only until the market can absorb the supply will property prices recover.
We are already seeing record levels of supply entering the sydney market, combined with the technological unemployment on the horizen, it could spell disaster for the Sydney Housing market.