Wealth Gap Widens as Property Boom Benefits the Rich

Average Australian household wealth has surged 24% since the pandemic, while median wealth remains stagnant at ~$700,000 — revealing that gains are flowing overwhelmingly to the already wealthy.

Wealth Distribution Trends

According to KPMG analysis of Australian Bureau of Statistics (ABS) and census data, Australia's average household wealth increased by 24% in real terms between 2019/20 and 2024/25, rising from $1.26 million to $1.56 million. Over the same period, median household wealth remained relatively unchanged at approximately $700,000, down from $701,000 in 2019/20.

The proportion of households with net wealth exceeding $1.6 million has grown from 15% to 22% over the past decade, expanding at an annual rate of 7% compared to overall household growth of 2.1%. Households with net wealth over $900,000 now represent over 40% of all households, up from 32% ten years ago.

Conversely, the middle-wealth bracket — households with net wealth between $300,000 and $900,000 — has contracted from 34% of households a decade ago to an estimated 28% currently. Approximately one-third of households, totaling 3.35 million, hold less than $300,000 in wealth.

KPMG urban economist Terry Rawnsley conducted the analysis, noting that the widening gap between average and median wealth indicates growing wealth inequality.

Property Market as Primary Driver

Rawnsley attributed the wealth divergence primarily to post-pandemic property price growth, which was fueled by near-zero interest rates. Domain data shows the following house price increases from December 2020 to December 2025:

• Sydney: 46% increase
• Perth and Adelaide: 91% increase
• Brisbane: 86% increase

"Households already owning property or entering the market during the pandemic benefited from these price increases, while those unable to purchase property did not experience comparable wealth gains."
— Terry Rawnsley, KPMG

Generational Property Wealth Shift

KPMG analysis indicates that Generation X households — those born between 1965 and 1980 — now hold the most property wealth among all generations in Australia. This shift occurs as baby boomers reportedly downsize and allocate more funds to cash and retirement accounts.

Average property wealth by generation:

Rawnsley stated that these figures indicate a generational transfer of property wealth, a fundamental component of Australian wealth. He noted that home ownership rates for older generations hover around 80%, while only about half of younger households in the 25-34 age cohort own homes.

Home Ownership Trends Among Younger Australians

Analysis of home ownership patterns shows that younger Australians are entering the housing market later in life compared to previous generations. However, some cohorts appear to be achieving home ownership rates similar to their immediate predecessors at an earlier age.

Data indicates that individuals born between 1977 and 1981 reached nearly identical home ownership levels to those born in the preceding five years by their 40s. Similarly, those born between 1982 and 1986 achieved comparable rates to the 1977-1981 cohort by their mid-to-late 30s.

These "catch-up" trends are observed among cohorts born from 1977 onwards and do not indicate that these younger generations have reached the home ownership rates of the oldest Baby Boomers at a national level.

Housing Affordability Challenges

Despite these ownership trends, housing affordability challenges persist. The average new loan for an owner-occupier dwelling has increased, surpassing $700,000, up from $512,000 five years prior. The ratio of typical home prices to median income has expanded from approximately four times in the early 2000s to eight times nationally and ten times in major cities like Sydney. Saving a 20% deposit for a median-valued dwelling now takes the median income household nearly 11 years.

Factors that have contributed to some younger Australians entering the housing market, as noted by AMP chief economist Shane Oliver, include:

• Government schemes: Initiatives such as first homebuyer grants and lower minimum deposit requirements (e.g., 5% deposit schemes)
• Competitive banking: Options including longer loan terms and interest-only loans
• Intergenerational wealth transfer: Financial assistance from parents and inheritances from older generations

Financial Stress Indicators

The Australian Bureau of Statistics General Social Survey (2025) found that financial stress has increased. The survey reported that 21% of respondents experienced cashflow problems, up from 19% in 2020. Additionally, 25% of respondents stated they could not raise $2,000 within a week, up from 19%.

An Australian Council of Social Service (ACOSS) report from the previous year indicated that wealth inequality among younger households has worsened. The report found that the top 10% of younger households experienced a 126% increase in wealth, while the bottom 60% saw only a 39% rise in the two decades leading up to 2022.

Policy Context

The analysis precedes the federal budget, where Treasurer Jim Chalmers has flagged "intergenerational fairness" as a key theme. Changes to the capital gains tax discount and negative gearing are widely expected in the budget. Oxfam has called for a wealth tax, and a 2024 Australian National University paper noted that tax settings favor older Australians.

Rawnsley commented on first home buyer schemes, suggesting that while they may contribute to a slight price increase of 1-2%, the benefit of enabling individuals to enter the market years earlier and save on rent could outweigh this for those without familial financial support.