Aussies Turn to Crypto as Wages Growth Lags in Australia

August 23, 2021, 9:15 AM AEST (updated August 25, 2021)

For many Australians, the dream of owning their own home is becoming more distant from reality as house prices soar and wages fail to keep pace with the CPI.

Wages have been out of step with inflation for years now and the cost of living in Australia continues to go up, with job insecurity also at an all-time high. Meanwhile the property market is booming as interest rates remain historically low.

For anyone looking to get into the housing market, accumulating enough money for a deposit has become an unfair race as prices are likely to grow well above 10 per cent in the time it takes to save. The chart below illustrates the problem:

Wages will not keep pace with the cost of living. When the cost of living is set to grow quicker than wages, families will be forced to make difficult decisions.

Jim Chalmers, shadow treasurer, Australian Labor Party

Australia Wage Growth Falls to 0.4% On Par with GFC Levels 

Wages growth in the June quarter fell to just 0.4 per cent, on par with the depths of the 2007-2008 global financial crisis which, until the Covid-19 recession in 2020 (now spilling well into 2021), was considered the most serious economic downturn since the 1930s Great Depression.

Last quarter wage data shows that at 1.7 percent, wages growth across 2020-21 was only just over half the 3 percent level the Reserve Bank of Australia considered necessary to lift inflation to within its target band and trigger a rise in interest rates. Additionally, real wages (the difference between wage growth and inflation) have fallen by 2.1 percent, the largest drop in 20 years.

Tokenised Real Estate is the Future

Increasing numbers have turned to cryptocurrency as a means to become financially free, or at least give it a go. Recent data shows that 40 percent of Australian millennials now prefer to invest in crypto over real estate. There is also a growing demand for workers choosing to be paid in crypto.

Because cryptocurrency is tokenised, it makes it an attractive asset class for millennials and anybody else who is curious about investing and trading, because you don’t have to buy a whole piece – you can just own a part of a bitcoin, for example.

As real estate investment now seems out of reach for many, crypto will help to revolutionise the industry and make it more accessible for those who want to buy property “shares”. Tokenisation of real estate is an inevitable next chapter in blockchain’s disruption of capital markets.

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