Australia could suffer an unavoidable recession by Christmas for the first time in 28 years, an expert has warned.
Daily Reckoning Australia editor Shae Russell said plummeting house prices, weak consumer spending and wage stagnation had created the perfect conditions for an economic contraction.
'We're only now starting to really consider the idea of an Australian recession is very real now that property prices are falling, that's sort of quite visible in people's minds,' she said in a video.
Ms Russell predicted the Australian economy would, for the first time since 1991, plunge into a technical recession - when gross domestic product shrank for two consecutive quarters.
Australia could be headed towards an unavoidable recession as soon as the end of the year, an expert has warned (pictured, Shae Russell)
Daily Reckoning Australia editor Shae Russell said plummeting house prices, weak consumer spending and wage stagnation had created the perfect conditions for an economic contraction (stock image)
Sydney property prices have slumped by 11.8 per cent in the past year, CoreLogic data showed.
Median house prices have dived by a record 16 per cent, or $169,140, to $880,594, since peaking in July 2017 despite record-low interest rates.
Since reaching a summit in November 2017, Melbourne's housing market has plummeted by 13.8 per cent, or $114,005, to $718,443.
'People don't feel as rich as they did before knowing that their house isn't worth as much before,' Ms Russell said.
Australia has had the slowest sustained rate of wage growth since the mid-1940s.
Nominal wages have increased at about 2 per cent since 2015, Australian Bureau of Statistics data showed.
Wages rose just 0.5 per cent in the December quarter.
What's more, the Fair Work Commission (FWC) admitted the minimum wage of $18.93 per hour - or $37,398 per year - meant many full-time workers were left struggling.
'Towards the end of this year, the data is finally going to catch up with people's thoughts and what they feel, and that is they don't feel rich,' Ms Russell said.
The Reserve Bank of Australia has kept interest rates at a record low of 1.5 per cent, for the 33rd straight month, in a bid to help families.
Ms Russell said she wasn't optimistic interest rate cuts would go far enough to save the economy.
'Monetary policy in Australia is starting to show its limits,' she said.
