Australia’s richest generation holds nine-fold increase to almost $6 trillion

The wealth of the Baby Boomer generation is increasing ninefold to almost $6 trillion; Rising property and share prices combine with the tax system to make them Australia’s richest generation.

As Chancellor of the Exchequer Jim Chalmers prepares a federal budget that he says will deal with “intergenerational fairness”, this imprint could reveal exclusive analysis showing that the share of the national wealth held by other generations is being squeezed by those over 65.

The research, compiled by Bankwest Curtin Economic Centre, tracks generational wealth between 2002 and 2025. The concentration of wealth held by people over 65 highlights the problems Chalmers faces as he considers reforms to capital gains tax, negative carry-through, family trusts and income tax that would directly impact assets held predominantly by Boomers.

Their wealth increased by 840 percent, from $640 billion to $6 trillion.

In 2002, Boomers in their 40s and 50s had a share of national wealth of 26.7 percent. By 2025, Boomers, now in their 60s and 70s, owned nearly a third of the national wealth.

The share of wealth owned by each generation has fallen. While this rate fell to 21.2 percent among Generation X, the share of Generation Y and Generation Z in Australia’s economic pie also decreased.

Most of the movement has occurred since 2011, when Boomers began to retire, global interest rates fell sharply, and both real estate and stock markets rose.

Curtin’s analysis shows that nearly half of Boomers’ net worth is tied up in property.

In 2002, Australians aged 45 to 54 owned property worth $602 billion but had debts of $153 billion.

Last year, Boomers’ property values ​​reached nearly $3 trillion, carrying virtually no debt. By contrast, Gen Xers had similar levels of property assets but $900 billion in housing debt.

While the boomer generation’s leverage ratio was only 4.5 percent, this rate rose to 30 percent for Generation X, who are on the verge of their own retirement.

Approximately 17 percent of the population is at least 65 years old, and 12 percent of them are over 70 years old. They hold more than 30 percent of the country’s net real estate wealth.

Center director Alan Duncan said Australians’ wealth was increasingly becoming a story about aging and the housing market.

He said older Australians tended to have significant housing wealth but little debt. Younger generations were carrying much more debt just to get into the real estate market.

“The policy problem is not that Australia lacks wealth, it’s that most wealth is tied to housing and concentrated later in life,” he said.

“The next phase of reform needs to focus on unlocking this wealth safely, while ensuring younger generations have access to fair, equitable and non-distortionary ways of accumulating wealth.”

Since 2002, the total wealth owned by people over the age of 65 has increased by 840 percent, from $640 million to $6 trillion. Young Boomers and early Gen Xers experienced the next largest increase, rising 470 percent from $790 million to $4.5 trillion.

One of the biggest shifts in wealth came from stocks and trusts. In 2002, people over 65 held 29.9 percent of total wealth through shares and trusts, compared to 23.3 percent for those in their 40s and 50s.

By 2025, Boomers accounted for more than half of all national wealth through stocks and trusts. Among those in their 40s and 50s, the rate dropped to 11.9 percent, while among those in their mid-20s and 30s, the rate fell from 7 percent to 3.5 percent.

The introduction of the superannuation guarantee in 1992 was partly aimed at ensuring that older Australians did not have to rely on age pensions after retirement. The guarantee, which reached 9 percent in 2002, increased to 12 percent last year.

Duncan noted that although the overall wealth of people over 65 is growing rapidly, it is not being shared equally among the Baby Boomers.

“Families who own their homes outright are often wealthy in terms of retirement balances providing adequate retirement income, but we know that lower-net-worth renters are at much higher risk of poverty, with at least two-thirds living below the poverty line,” he said.

The large amount of property holdings held by older Australians is not just a matter of wealth or income.

Former World Bank chief urban planner Alain Bertaud, who is currently on tour in Australia, told this imprint that rising housing prices in the country’s cities will eventually push young people away from metropolitan centers and the high-paying jobs they offer.

“Cities will have to compete for young people. If we don’t solve the affordability problem, we will continue to push young people out of our cities,” he said.

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