Myth busted! Baby Boomers no longer own the bulk of housing wealth in Australia. We reveal who does, and how you could get started in the property market.
As many Baby Boomers (those born between 1946 and 1964) start to enjoy their retirements, they are passing the baton of property ownership over to the next generation.
A new report by KPMG reveals that Gen X (born 1965-1980) now holds more property-based wealth than any other generation.
Not to be outdone, Millennials (1981-1996) are also making a strong start in property wealth.
Let’s take a look at what’s happening, and how much property wealth each generation has accumulated to date.
The “great wealth transfer”
Baby Boomer households are still the wealthiest in Australia, with net worth (total assets minus debt) averaging $2.375 million per household.
However, KPMG says that as Boomers progressively hang up their work boots, they are downsizing their properties, and shifting money into cash and superannuation.
The upshot is that Boomers now have property wealth averaging $1.36 million per household.
While that’s nothing to be sneezed at, it puts Boomers in second place behind Gen X, with an average property wealth of $1.455 million per household.
Not surprisingly, both generations are ahead of Millennials, who have $890,000 in average household property wealth.
But there’s an unexpected twist to the property wealth story.
Property wealth is growing fastest for young Aussies
Younger Australians have the lowest levels of property wealth.
But they may have the upper hand when it comes to increasing wealth.
KPMG says 25-34-year olds, essentially Gen Z (the ‘Zoomers’ born 1995-2012), have seen the biggest gains in household wealth over the past five years.
The Zoomer generation has seen household wealth rise by around 63% since 2019-20.
According to KPMG, that’s largely thanks to rising home ownership among younger Australians – proof that a decent portion is climbing their way onto the property market ladder.
Property ownership pays off
All these stats confirm the key role home ownership can play in our lives.
Our homes aren’t just a place to live. They can also be a long-term investment.
Sure, for most of us buying a home involves taking out a home loan.
But paying off that loan can be seen as a form of forced saving, with the potential for household wealth to grow significantly.
Without the benefits of property ownership, long term renters may face serious financial challenges in retirement, according to an RBA report conducted by the Grattan Institute.
How you can get started
If you’re keen to start building wealth through property, it’s good to know that there are numerous government schemes available that can potentially help you buy sooner.
You may be eligible for a range of support – from the First Home Owner Grant, through to stamp duty savings, and the newly expanded 5% Deposit Scheme, which helps first home buyers buy with a smaller deposit and not pay lenders mortgage insurance.
Contact us to find out which schemes you could be eligible for, what your borrowing capacity is, and whether you’re ready to start your property buying journey.
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