The Sixth Edition of the Roy Morgan Wealth Report 2023, released on Monday, shows that after inflation, Australia’s wealth increased by 7.0% between March 2020 (pre-COVID) and March 2023.
This wealth increase was driven primarily by the rising value of owner-occupied homes, which increased by 43.2% from $4.16 trillion to $5.95 trillion.
The value of debt increased faster than the value of assets (53.0% vs. 22.2%), but not quickly enough to halt the increase in overall wealth: the value of assets is now six times that of debt.
Half of the population currently accounts for 95.4% of the country’s net wealth, while the other half accounts for only 4.6%.
While the wealth held by the richest 10% of the population declined from 47.6% to 42.1% of the nation’s wealth, the next wealthiest 40%’s share of wealth increased the most, from 48.9% to 53.3%.
By contrast, the lowest half of the population, primarily renters, saw their wealth share rise — but only from 3.6% to 4.6%.
The bottom 10% of the population has had the most difficult time throughout the pandemic, with net wealth falling at a rapid rate.
This decile’s average net wealth is in negative territory and declining – down by more than 400% since March 2020.
Over the last three years, the bottom 10% of the population has been the only decile to lose wealth.
The fact that the wealthiest 10% of Australians have paid off or are paying off their home debts demonstrates the relevance of home ownership in producing wealth. Only 1% of the richest 1% are renters.
Commenting on the results, Roy Morgan CEO Michele Levine noted:
“The exceptional finding in the latest Wealth Report is that so much wealth is in the hands of the top half of the population. To see that the bottom half holds less than 5% of the wealth speaks to a wealth divide in Australia”.
“And the finding that the poorest 10% of our nation has gone backwards, and is further in debt, is extremely worrying. This is the kind of critical insight that is only available through deep data that begins with a holistic view of individual Australians”
“There are well-established links connecting overall wealth and wealth distribution to national well being in the broadest sense”.
The baby boomer generation has clearly been the biggest winner through the pandemic.
As shown in the next chart, Australians aged over 65 years amassed an extraordinary $160 billion of savings over the pandemic, while younger Australians treaded water:
Older Australians also have by far the highest home ownership rate (many without mortgages), as well as own the highest share of investment properties.
Accordingly, they have benefited most from the rapid house price inflation over the pandemic, as noted above.
To the baby boomers go the spoils!
