Baby boomers win Property Monopoly

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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.

Median wealth by age

Australians aged 75 and over experienced by far the largest percentage increase in their wealth (+130%), followed by Australians aged 65 to 74 (+125%).

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Change in median wealth

Separate data from the Productivity Commission (PC) also shows that wealth has grown strongest for older Australians aged 65-plus:

Wealth by age
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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.

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Home ownership rates

Younger Australians are also carrying larger mortgages for longer than previous generations.

Outright ownership
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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.

CBA spending insights

Source: CBA

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The baby boomer generation has been the greatest beneficiary of Australia’s 21st-century property boom.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.