Swathes of Australia are at risk of turning into an AI “rust belt” because of a high grouping of people working white-collar jobs that could be fazed out by automation, forcing many to leave and dragging down property prices.
A stark new analysis has identified multiple areas across major capital cities with heavy concentrations of workers in roles expected to be rapidly overtaken by AI within just a few years.
The SuburbTrends report warns that these suburbs face a heightened risk of job losses as automation sweeps through finance, insurance, telecommunications and professional services – sectors that dominate local employment in these areas.
Research group SuburbTrends forecasts that Sydney and Melbourne will bear the brunt of AI-driven disruption and local property markets could be disrupted.
The cities’ dependence on high-income office jobs, and the steep mortgages tied to them, leaves households particularly exposed, but there were also pockets of Brisbane, Adelaide and Perth where AI workforce changes could ripple through the local market.
The study suggests many residents in these areas could be forced to offload their homes and relocate as more white-collar roles are replaced by AI systems, triggering population churn and potential drops in housing values.
SuburbTrends data scientist Kent Lardner said AI was evolving rapidly and “rust belt” suburbs could emerge if workers had few pathways to transition into new industries.
“You would have suburbs that emulate the rust belt towns of the US, where they exported manufacturing jobs,” he said.
“This time it will be exporting white collar jobs. The real risk is we end up with our own rust belt, where a mass of people are leaving, or selling their homes at once because they’ve lost jobs.”
The SuburbTrends research showed the impacts would differ across capital cities:
MELBOURNE:
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Prahran-Windsor tops Victoria’s risk rankings, followed by Richmond, Cremorne, Bentleigh and McKinnon.
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, because of the higher number of people working jobs exposed to AI changes, but also the large numbers of new mortgage holders.
SYDNEY
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At a postcode level, the most exposed market in the country was Erskineville-Alexandria, followed by Manly-Fairlight and north shore areas Lindfield-Roseville and Crows Nest-Waverton.
All were regions home to a high number of people working in professional, scientific and technical services, along with financial and insurance services.
Eighty per cent of roles in these industries were forecast to be impacted by AI in the coming years.
Other highly exposed areas were Schofields, in the Blacktown region, and Macquarie Park-Marsfield, in the northwest.
ADELAIDE
The figures paint a frightening picture for residents in Adelaide’s city, with the highest number of residents employed in the information media and communication fields – a field the data identified as carrying a 90 per cent likelihood of employees being impacted by AI.
The CBD also had a further 1048 people employed in professional, scientific and scientific services – a field carrying an 80 per cent likelihood of being impacted by AI.
Other heavily impacted markets were expected to be the Unley Parkside area.
BRISBANE
Brisbane’s Newstead and Bowen Hills area within the inner city was expected to be the Queensland housing market most impacted by AI changes in the workforce.
Brisbane was generally less exposed to AI changes than Sydney and Melbourne. Brisbane had a higher supply of workers in mining related fields, a sector less exposed to AI disruption.