Sydney's plunging house prices are replacing a prolonged wage slump as the key worry for the Reserve Bank, with markets now showing more chance of an interest-rate cut than a hike in 2019.

House prices in Australia's biggest city have tumbled 10 per cent and some economists are tipping a similar fall next year. While the RBA isn't panicking just yet, a 15 per cent nationwide drop in prices would cut about $1 trillion from the housing stock value.

The fall in property prices could put major pressure on consumption. Credit:Glenn Hunt

That could deal a major blow to consumption, which props up about 60 per cent of the economy.

The wages picture isn't much brighter than property's, though the RBA and government say labour shortfalls are emerging in some industries. Pay packets rose 2.3 per cent last quarter, a three-year high and inching closer to Governor Philip Lowe's goal of annual increases with a "3" in front of them. But a reasonable amount of slack remains in the labour market.