From grunge to Grange: How Gen X became wealthier homeowners than Boomers

The financial dominance of Baby Boomers is beginning to fade as new analysis shows Gen X has more wealth in property and shares than any other generation.

While Boomers still have the highest overall net worth, the average housing wealth of Gen X households has reached $1.31 million, pipping the previous generation’s $1.299 million, according to a KPMG study of Australian Bureau of Statistics wealth and expenditure data.

KPMG urban economist Terry Rawnsley, who conducted the analysis, said the children of Baby Boomers were starting to inherit property.

Never mind - Gen X is doing fine. Credit: Rocco Fazzari (with apologies to Nirvana and Kirk Weddle)

“Older Boomers have, on average, gone past the life expectancy threshold, so we know some of them are dying,” he said. “Their money has got to go somewhere, and it’s starting to end up in the hot little hands of Gen X and Y.”

Meanwhile, Millennial and Gen Z households have lower average wealth in housing. Millennial households have a toehold in the property market, with an average of $750,000 in housing – the price of an entry-level apartment in many markets. Gen Z is not yet a propertied generation, with an average of $69,000 in housing.

The term Generation X was popularised by the 1991 novel of the same name by Canadian author Douglas Coupland, and was supposed to be shorthand for twentysomethings who didn’t care about money or status, stuck in dead-end jobs in recessionary times.

But while that generation railed about the easy economic times they believed their Boomer compatriots had in the 1960s and 1970s, Gen X came of age when buying a property was still a realistic goal.

In the 1990s, the average dwelling across Australia was worth about 9.5 times the average household income. By 2023, that value had risen to 16.4 times the average wage.

Australia’s housing affordability crisis will be a key debate in this year’s federal election, with all parties hoping to persuade voters that they know how to get younger Australians into the market without compromising property values.

Labor will go to the polls pointing to its $10 billion fund to build 30,000 affordable homes, while the Coalition wants younger people to be able to tap into their superannuation to buy a first home.

Social researcher Mark McCrindle said while it was believed for some time that no other generation would reach the high-water mark of the Baby Boomers when it came to wealth, Gen Xers were reaping similar rewards.

“Gen Xers have followed the same playbook as Baby Boomers, which was to get jobs early, delay gratification and get into property as early as they could,” he said.

“It’s unlikely that Gen Y and Gen Z will be able to reach the same wealth levels on their own.”

McCrindle said housing affordability constraints had partly fed into attitude differences among younger generations, which were delaying having children and spending more on activities such as travel.

In November, the Centre for Population found that while a range of social and economic issues were tied to the drop in Australia’s fertility rate, the cost of housing – including rents – was a growing impediment to people wanting to have children.

Gen X households also have higher average share ownership than Boomers, at $256,000 compared with $206,000. Millennial and Gen Z households have significantly less in shares, at $51,000 and $7000 respectively.

While Boomers and Gen X hold substantially higher amounts in superannuation and business assets – more than $580,000 on average – than Millennials ($260,000) and Gen Z ($43,000), Rawnsley said younger generations were building up their super balances earlier than previous generations and at higher compulsory contribution rates.

“This means the wealth they will eventually accumulate from super will be far higher than older generations,” Rawnsley said.

McCrindle said superannuation was ultimately only a small portion of retirement savings, and it would be difficult for younger generations to achieve the same levels of accumulation in investments such as shares as older generations in housing.

ANU demographer Liz Allen said the data masked the worsening gap between the haves and have-nots.

“Don’t get too excited – we’re not seeing socio-economic inequality easing,” she said.

“We’re watching intergenerational wealth transference that more than ever favours those lucky to be born into privileged circumstances.

“Home-ownership rates have declined generation on generation since the post-World War II period. Opportunities for Australians aged under 45 today are much less than those on offer in 1945.”

Boomers are still ahead when it comes to cash and deposits, holding nearly $250,000 on average. Gen X has stashed away $176,000 while Gen Z holds the smallest amount at $26,000.

When it comes to indebtedness, Gen X and Millennials lead the way, with average loan balances of more than $400,000, mostly reflecting home loans. Boomers have average loan balances of $82,000 as they prepare for retirement, while Gen Z’s nearly $50,000 in debt largely reflects higher education loans and credit card debt.

Boomers still have the highest net worth, with an average of $2.31 million, ahead of Gen X households on $1.88 million. Gen Z has the lowest net worth at $96,000, followed by Millennials with $757,000.

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