The latest House Income and Labour Dynamics in Australia (HILDA) survey, conducted by the University of Melbourne and the Melbourne Institute, showed an increasing wealth disparity throughout the country.
As illustrated below, older Australians’ wealth increased the most over the past 20 years.
Australians aged 75 and over experienced by far the largest percentage increase in their wealth (+130%), followed by Australians aged 65 to 74 (+125%).
Separate data from the Productivity Commission (PC) also shows that wealth has grown strongest for older Australians aged 65-plus:
Their wealth grew at a compound rate of around 4% in the 20 years to 2022-23, roughly double the rate of younger households.
The increase in older Australians’ wealth has been driven primarily by rapid house price appreciation, which has pushed home ownership beyond the reach of younger Australians.
The following chart shows that younger Australians have experienced the sharpest decline in homeownership rates, whereas homeownership among older Australians has remained relatively stable.
Younger Australians are also carrying larger mortgages for longer than previous generations.
Most older households own their homes outright and have not suffered from rising rents and mortgage payments.
As a result, these households have increased their spending more than other households since they have greater disposable income.
Source: CBA
The baby boomer generation has been the greatest beneficiary of Australia’s 21st-century property boom.
