Melbourne homeowners warned as AI job risks surge

1 month ago 14

New modelling reveals the Melbourne suburbs most exposed to AI-driven job disruption and rising mortgage stress.

Artificial intelligence is carving out financial “danger zones” across Melbourne’s housing market that could start impacting large numbers of homeowners within two years.

New modelling has identified areas where home prices could suffer as they become exposed to jobs being replaced or reshaped by advancing technology.

Prahran-Windsor tops Victoria’s risk rankings, followed by Richmond, Cremorne, Bentleigh and McKinnon.

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The data indicates households in these pockets could face sudden income shocks, with many relying on salaries from finance, IT services and professional services roles already being disrupted by AI tools.

Tarneit emerged as the standout mortgage-belt hotspot, according to SuburbTrends analysis of suburbs with high concentrations of AI-exposed jobs and large home loans.

SuburbTrends director Kent Lardner warned the shift could even create modern-day “rust-belt suburbs” if clusters of professional workers were displaced at once.
“You’d see suburbs where people are forced to sell en masse because their jobs have been automated,” Mr Lardner said.
“This time it won’t be manufacturing jobs leaving, it will be professional services roles.”

Property expert Cate Bakos says AI will hit some industries hard but warns the impact will vary by suburb.

Mr Lardner said the suburbs facing the greatest danger were those where many homeowners had taken out large mortgages in the past few years.
“Someone who has owned their home for many years will be less affected than someone with a new mortgage,” he said.
“The real danger is when you have workers concentrated in vulnerable industries, all holding high levels of debt.”

Tarneit’s appearance alongside inner-city pockets highlights the risk in newer mortgage-belt suburbs, where high loan-to-income ratios leave families with limited room to move if hours are cut or roles are restructured.
Mr Lardner said AI’s impact on jobs could accelerate far faster than most Australians expect.
“The technology will be good enough to replace workers and companies will adopt it,” he said.
“Both of those things will happen within the next two years.”

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PIPA chair and buyers’ advocate Cate Bakos said AI-related job uncertainty could influence buyer behaviour, especially in suburbs where households had stretched to buy.
“You don’t see an entire suburb empty out overnight,” Ms Bakos said.
“People retrain, move sideways or adapt.
“But in suburbs where many people work in similar industries and have high mortgages, that’s where pressure builds.”

7 Bella Vista Rd, Caulfield North, Sold for $1.450m

The professional homebuyer said early stress signs were often visible before they appeared in official data.
“Elevated listings, heavy discounting, vendors competing against each other, those are the big red flags,” she said.
“When supply hits all at once, the floor drops and prices fall.”

Ms Bakos said overstretched borrowers were increasingly common across Melbourne.
“Of course people live beyond their means, that happens everywhere,” she said.
“I always recommend a buffer, especially if you’re on the verge of a lifestyle change. Don’t borrow to your absolute maximum.”

88 Riversdale Drive, Tarneit, Sold for $1.1m in December.

Mortgage Choice Cheltenham broker Rhys Elmi warns sudden income shocks could trap borrowers in “mortgage prison”.

Mortgage Choice Cheltenham broker Rhys Elmi said a sudden income hit in high-debt “danger zones” suburbs could quickly trap borrowers in “mortgage prison”.
“If you’ve got a high debt and your income drops or you lose your job, you’re essentially stuck,” Mr Elmi said.
“You can’t refinance, your income no longer meets serviceability, and in some cases you could be pushed to sell.”

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He added that access to cash or equity was vital in an uncertain labour market.
“If you don’t hold money in an offset account, you can get stuck,” he said.
“But if you have a buffer, even $100,000 or $200,000, you’ve bought yourself time if things go belly-up.”

Mr Elmi said brokers were increasingly having difficult conversations with clients trying to stretch into expensive suburbs.
“You do get a feel when someone is pushing the limits,” he said.
“Sometimes you have to tell people to reconsider or adjust their spending before taking on a big loan.”