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

Baby Boomers are sitting on a nine-fold increase in wealth to almost $6 trillion as soaring property and share prices combine with the tax system to make them Australia’s richest generation.

As Treasurer Jim Chalmers prepares a federal budget that he says will deal with “intergenerational fairness”, this masthead can reveal exclusive analysis that shows the share of national wealth held by every other generation has been squeezed by those over the age of 65.

Compiled by the Bankwest Curtin Economics Centre, the research tracks generational wealth between 2002 and 2025. The concentration of wealth held by those over 65 highlights the issues facing Chalmers as he considers reforms to the capital gains tax, negative gearing, family trusts and income tax that will directly affect the assets predominantly held by Boomers.

Their wealth jumped 840 per cent, from $640 billion to a record $6 trillion.

The share of national wealth held by Boomers, who in 2002 were aged in their 40s and 50s, was 26.7 per cent. By 2025, Boomers now well into their 60s and 70s, had almost a third of national wealth.

The share of wealth held by every other generation fell. Among Generation X, it fell to 21.2 per cent while Millennials and Gen Z’s share of Australia’s economic pie also dropped.

Most of the movement has occurred since 2011 when Boomers started to retire, global interest rates nose-dived and both property and equity markets soared.

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

In 2002, Australians aged between 45 and 54 held property assets worth $602 billion while they had debts of $153 billion.

By last year, Boomers’ property values had climbed to almost $3 trillion while carrying virtually no debt. By contrast, Gen Xers had a similar level of property assets but $900 billion in housing debt.

Boomers have a leverage ratio of just 4.5 per cent, while it has increased for Gen Xers, on the cusp of their own retirements, to 30 per cent.

About 17 per cent of the population is aged at least 65, including 12 per cent who are over the age of 70. They hold more than 30 per cent of the nation’s net property wealth.

Centre director Alan Duncan said Australians’ wealth was increasingly a story about ageing and the housing market.

He said older Australians tended to hold substantial housing wealth but little debt. Younger generations were carrying far more debt just to get into the property market.

“The policy challenge isn’t that Australia lacks wealth, rather that much of it is tied up in housing and concentrated later in life,” he said.

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

Since 2002, the total wealth held by over 65s has climbed by 840 per cent, from $640 million to $6 trillion. Young Boomers and early Gen Xers have enjoyed the next largest increase, up 470 per cent from $790 million to $4.5 trillion.

One of the biggest changes in wealth has been driven by equities and trusts. In 2002, over 65s held 29.9 per cent of total wealth through shares and trusts compared to 23.3 per cent for those in their 40s and 50s.

By 2025, Boomers accounted for more than half of all national wealth through shares and trusts. Among those in their 40s and 50s, the share had collapsed to 11.9 per cent, while among those in their mid-20s and 30s and proportion had nosedived from 7 per cent to 3.5 per cent.

The advent of the superannuation guarantee in 1992 was partly aimed at ensuring older Australians did not have to rely on the age pension after retirement. By 2002, the guarantee had reached 9 per cent on its way to 12 per cent last year.

Duncan noted that while the overall wealth of over 65s had soared, it was not shared equally among Baby Boomers.

“Families who own their homes outright are asset rich with superannuation balances that typically deliver adequate retirement incomes, but we know that low-wealth renters are at far higher risk of poverty, with at least two-thirds living below the poverty line,” he said.

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

Alain Bertaud, former World Bank principal urban planner who is now on tour in Australia, told this masthead the soaring cost of housing in the nation’s cities would ultimately drive young people out of metropolitan centres and the high-paying jobs they offered.

“Cities are going to have to compete for young people. If we don’t solve the affordability problem, we’re just going to keep pushing young people out of our cities,” he said.

Cut through the noise of federal politics with news, views and expert analysis. Subscribers can sign up to our weekly Inside Politics newsletter.