Generation X Emerges as Australia's Premier Property Wealth Holders
In a significant shift in Australia's economic landscape, Generation X households have now surpassed baby boomers as the nation's wealthiest property owners, according to comprehensive analysis from KPMG. The professional services firm has revealed that those born between 1965 and 1980 now hold an average of $1.455 million in wealth from dwellings and land, based on detailed examination of Australian Bureau of Statistics and census data.
The Generational Wealth Transition
This development marks a notable generational "passing of the baton" in property riches, as described by Terry Rawnsley, an urban economist at KPMG. While baby boomers remain Australia's wealthiest generation overall due to substantial superannuation holdings and relatively low debt levels, their average property wealth stands at $1.36 million, placing them second to Generation X in this specific asset class.
The analysis highlights how Generation X, once characterised as the "slacker generation," has benefited significantly from years of inflated property prices as most members now exceed 50 years of age. This demographic shift coincides with baby boomers increasingly downsizing their homes and moving more of their wealth into cash reserves and retirement accounts.
The Millennial Property Gap
In stark contrast to Generation X's property prosperity, the analysis reveals a substantial wealth gap affecting younger Australians. Millennial households, comprising those aged between 29 and 44, average just $890,000 in property wealth, reflecting significantly lower home ownership rates within this generation.
The disparity becomes even more pronounced when examining specific age brackets. Households headed by individuals aged 25 to 34 possess average property wealth of $575,000, though this figure is substantially offset by average debts of $346,000. Rawnsley notes that while home ownership rates among older generations consistently hover around 80%, only approximately half of households in this younger demographic own their homes.
The Growing Intergenerational Divide
With Australian housing becoming increasingly unaffordable, home ownership among younger households has declined sharply, raising serious concerns about growing intergenerational inequality. Rawnsley warns that those unable to enter the property market in their 20s or 30s face potentially permanent wealth disadvantages that could extend for decades.
"If you miss out on that property purchase when you are in your 20s or 30s, the impact of that on your wealth will carry on for the next 30-40 years," Rawnsley emphasised. He further cautioned that becoming a "forever renter" represents more than just a lifestyle choice, potentially locking in generational disadvantage that could affect not only individuals but their children as well.
Policy Implications and Market Realities
The research reveals particularly challenging market conditions for first home buyers, with KPMG analysis indicating that only slightly more than one in ten homes for sale remains affordable for average purchasers. This scarcity places increasing pressure on younger Australians to make critical financial decisions at earlier stages of their lives.
Rawnsley observes that "there are a lot more difficult questions being asked of a 25-year-old today than there were 10, 20 or 40 years ago," highlighting the growing complexity of property market entry. While government first home buyer schemes have faced criticism for potentially inflating demand and prices, Rawnsley offers a contrasting perspective, suggesting that paying marginally higher prices through such schemes might ultimately benefit those without access to family financial support.
The economist argues that if prospective buyers can save five years of rental payments in expensive markets like Sydney and enter the property market earlier, many individuals who cannot rely on parental financial assistance could ultimately achieve better long-term outcomes. This perspective adds nuance to ongoing debates about housing affordability and generational wealth transfer in contemporary Australia.
