Gen Xers: The New Baby Boomers? Analysis Identifies Australia's Richest Landholders by Generation
Gen X households now hold the most property wealth of any generation, as baby boomers downsize their homes and move more of their money into cash and retirement accounts. This shift in wealth distribution is reshaping the Australian property market.
Once labeled the "slacker generation," those born between 1965 and 1980 are now mostly over 50 and have benefited from years of rising home prices. According to an analysis by KPMG, Gen X households hold an average of $1.455 million in property wealth from dwellings and land.
This compares to $1.36 million in average property wealth among baby boomers, who remain the wealthiest overall due to their super holdings and low debt. However, the analysis also reveals a stark contrast with millennials, aged 29 to 44, holding an average property wealth of $890,000, reflecting lower home ownership rates.
The rising cost of housing is a significant factor in this generational wealth gap. With home ownership among younger households dropping sharply, there's a risk of increased intergenerational inequity. Households aged 25 to 34 have an average property wealth of $575,000, but this is offset by an average debt of $346,000.
Terry Rawnsley, an urban economist at KPMG, highlights the challenge faced by younger generations. He notes that the median house price is nearly $1 million, and with only half of younger households owning homes, they risk being left behind by the time they reach their 40s and 50s.
The pressure on younger Australians is mounting, as the affordability of homes for first-time buyers continues to decline. According to KPMG research, only slightly more than one in 10 homes for sale are affordable for the average first-time buyer. This means that young adults today face more difficult questions about their financial future than previous generations.
Rawnsley argues that the government's first-home buyer scheme, despite criticism, can help alleviate some of these challenges. He believes that paying a slightly higher price for a home due to such schemes is justified, as it can enable people to enter the property market earlier and potentially build generational wealth.
In conclusion, the analysis highlights the complex interplay between generational wealth, home ownership, and the rising cost of housing in Australia. It invites readers to consider the implications of these trends and engage in discussions about potential solutions to address the growing gap in intergenerational wealth.
